Income Tax Severed Letters - 2010-07-16

Technical Interpretation - External

9 July 2010 External T.I. 2010-0371111E5 - Investments - income vs capital

Unedited CRA Tags
39(1)

Principal Issues: Are future personal investment transactions on account of income or capital if the taxpayer was previously an agent for an investment dealer?

Position: Question of fact.

Reasons: While not determinative in and of itself, a taxpayer's knowledge of the securities market (which could have been gained from previous employment) will be considered in ascertaining whether the taxpayer's conduct is indicative of the carrying on of a business

29 June 2010 External T.I. 2010-0371001E5 - Education Allowance

Unedited CRA Tags
6(1)(b)(ix)

Principal Issues: Is an education allowance paid to an employee in respect of the employee's child exempt from income tax if the child lives at the employee's home while attending school?

Position: No.

Reasons: Under subparagraph 6(1)(b)(ix) of the Act, several requirements must be met for an education allowance to be exempt from income tax if paid to an employee in respect of the employee's child. One condition is that the child of the employee must be living away from the employee's domestic establishment while attending school.

24 June 2010 External T.I. 2010-0358981E5 F - Déductibilité de dépistage de la XXXXXXXXXX

Unedited CRA Tags
18(1)a); 67.
Summary Under
Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(a) - Income-Producing Purpose
expense of bacteria testing can be deductible even though expenditures do not themselves generate revenue

Principales Questions: Est-ce que les frais liés au dépistage de la bactérie XXXXXXXXXX pourraient constituer des dépenses déductibles dans le calcul du revenu des contribuables?

Position Adoptée: Probablement.

Raisons: Question de fait. Application de l'alinéa 18(1)a) de la Loi de l'impôt sur le revenu.

24 June 2010 External T.I. 2010-0367031E5 - QSBCS - 24 Month Holding Period

Unedited CRA Tags
110.6(1),110.6(2.1),110.6(14)(f)

Principal Issues: Do shares issued from treasury have to be held 24 months preceding the time of disposition to otherwise be considered QSBC shares eligible for the capital gains deduction?

Position: Yes unless the conditions of subparagraphs 110.6(14)(f)(i) or (ii) are met which provide exceptions to the holding period requirement.

Reasons: The law.

14 June 2010 External T.I. 2010-0362011E5 - Capital gains on sale of family home

Unedited CRA Tags
54, 40(2)(b)

Principal Issues: Whether the capital gains exemption can be claimed as a result of a sale of a family home

Position: Question of fact. If a personal trust was created as a consequence of death, the personal trust may claim the principal residence exemption to reduce or eliminate a capital gain that the trust would otherwise have on the disposition of the family home, subject to the conditions in paragraph 40(2)(b) of the Act and in paragraph 35 of IT-120R6.

Reasons: In accordance with the legislation and prior positions.

4 June 2010 External T.I. 2010-0358951E5 - Deductibility of lump sum spousal support payment

Unedited CRA Tags
56.1(4), 60(b)

Principal Issues: Whether court ordered retroactive spousal support paid in a lump sum is deductible to the payer in the year of payment?

Position: In this situation, no.

Reasons: The lump sum payment is not in respect of amounts payable periodically that were due after the date of the court order and therefore it does not meet the definition of a "support amount" as defined in subsection 56.1(4).

1 June 2010 External T.I. 2009-0328501E5 - Deductibility of a retiring allowance

Unedited CRA Tags
9(1), 18(1)(a), 56(1)(a)(ii), 60(j.1), 78(4), 248(1).

Principal Issues: Whether an employer can claim a current deduction for a retiring allowance which will be paid in the future.

Position: Provided general comments.

Reasons: Depends on whether the employer has incurred the expense which is a factual determination.

XXXXXXXXXX 2009-032850
S. Bernards
June 1, 2010

11 May 2010 External T.I. 2009-0339151E5 F - Paragraphe 44.1 - " actions de remplacement

Unedited CRA Tags
44.1
Summary Under
Tax Topics - Income Tax Act - Section 44.1 - Subsection 44.1(1) - Replacement Share
replacement share not required to continue to be of an eligible small business corporation after its issue

Principales Questions: Est-ce que une action de remplacement doit continuer, après son émission, d'être une action d'une société admissible exploitant une petite entreprise pour que le report du gain en capital prévue à l'article 44.1 puisse continuer de s'effectuer?

Position Adoptée: Non.

Raisons: La définition de l'expression " action déterminée de petite entreprise " prévoit, entre autre, que la détermination du statut d'une société est faite au moment de l'émission de l'action.