Income Tax Severed Letters - 2013-01-16

Ruling

2012 Ruling 2011-0424211R3 - Article X(2) and 84(3) deemed dividends

CRA Tags
84(3), Treaties Article XXIX-A(3), Treaties Article X(2), 82(1)
Treaty-reduced rate applicable to redemption all of the common shares of a Canadian grandchild held by US beneficial grandparent

Principal Issues: Whether a reduced withholding rate pursuant to Article X(2)(a) is available pursuant to Article XXIX-A(3) in respect of: a) 84(3) deemed dividends that arise on the redemption of the shares of a Canadian corporation; and b) 82(1) cash dividends paid by a Canadian corporation on a particular class of its capital stock.

Position: a) Yes b) Yes

Reasons: The benefits of the Canada-US Treaty apply to the taxpayer pursuant to paragraph (3) of Article XXIX-A. Consistent with past positions, subparagraph (2)(a) of Article X will apply to reduce the withholding rate applicable to the a) subsection 84(3) deemed dividends and b) subsection 82(1) dividend resulting from the proposed transactions.

Technical Interpretation - External

22 November 2012 External T.I. 2012-0441781E5 F - Prohibited Investment - Cooperative

CRA Tags
207.01(1) "prohibited investment", ITR 4900(14)(a)(iii), ITR 5001
application to shares of cooperative
investor in cooperative holds shares and is shareholder
Words and Phrases
share shareholder
share of cooperative can be a share of corporation for prohibited investment purposes

Principales Questions: Whether a share of a cooperative corporation can be a prohibited investment pursuant to the application of either subparagraph 207.01(b)(i) or paragraph 207.01(1)d)?

Position Adoptée: Yes

Raisons: For the application of the Income Tax Act, a cooperative corporation is a corporation and a share includes a share of the capital of a cooperative corporation (within the meaning of subsection 136(2)). Therefore, depending of the facts, both subparagraph 207.01(b)(i) or paragraph 207.01(1)d) could apply.

20 November 2012 External T.I. 2012-0466891E5 F - Non-Cash Gifts and Non-Cash Awards

CRA Tags
9
gifts and awards to employee are deductible even if within $500 tax-free amount
$500 tax-free non-cash gift amount calculated including sales tax

Principales Questions: Whether an employer can deduct the costs of non-cash gifts and non-cash awards as business expenses.

Position Adoptée: Generally, yes

Raisons: The costs of non-cash gifts and non-cash awards can be expenses incurred to earn income from a business or property pursuant to section 9 of the ITA.

15 November 2012 External T.I. 2012-0462781E5 - Capital gain reserve

CRA Tags
54, 18(9), 40(1), 67.3

Principal Issues: 1. Can a taxpayer continue to claim the capital gain reserve if the purchaser resells the property and the new purchaser assumes the existing mortgage.
2. If the non-refundable down payment on a vehicle lease should be amortized over the terms of the lease or claimed as a current expense.

Position: 1. Depends on if the original POD due to the vendor from the original transaction remain payable or are considered paid.
2. If in nature of prepaid expense, it should be amortized

Reasons: Question of fact and law

7 November 2012 External T.I. 2012-0464381E5 - Non-resident withholding on dividends

CRA Tags
212(2), 227.1, 215

Principal Issues: Should Part XIII tax be withheld and remitted where an Alberta corporation pays a dividend to a US corporation?

Position: Yes.

Reasons: Wording of the Act.

6 March 2012 External T.I. 2012-0433161E5 - Hong Kong Scheme

CRA Tags
9, 3, 56(1)(u)

Principal Issues: Whether a one-time payment received by a Canadian resident from the Hong Kong Government "Scheme $6,000" should be included in the taxpayer's calculation of taxable income.

Position: No.

Reasons: The "Scheme $6,000" one-time payment from the Hong Kong government is not income from a source, nor is it taxable under a specific provision of the Act. The one-time payment appears to be a windfall in accordance with the factors listed in IT-334R2.

Conference

5 October 2012 Roundtable, 2012-0451241C6 F - Benefit conferred on a NR shareholder by a NR corp

CRA Tags
212(2), 157, 212(13)(a), 212(1)(d), 15(1), 247, 214(3)(a)
gratuitous use by NR shareholder of Canadian property of the NR corporation produces a s. 214(3)(a) deemed dividend
s. 15(7) assists in determining that s. 15 can apply to the NR shareholder of a NR corporation gratuitously using the corporation’s Canadian property
s. 247(2) could apply to produce s. 212(1)(d) withholding where the NR shareholder of a NR corporation gratuitously uses Canadian corporate property

Principales Questions: Whether ss. 15(1), 15(7) and 212(2) and par. 214(3)(a) of the Act apply in a situation where a non-resident corporation permits its non-resident shareholders to use a real estate property on a rent-free basis?

Position Adoptée: The value of the benefit, if any, would generally be subject to a Part XIII tax.

Raisons: Interpretation of the Act and previous positions

5 October 2012 Roundtable, 2012-0453581C6 F - Somme payable - revenus de placements

CRA Tags
108(3), 104(13), 104(24)
acknowledgement of debt under a 25-year note does not satisfy s. 104(24)

Principales Questions: Un gain en capital imposable de 375 000 $ a été attribué au Bénéficiaire A d'une Fiducie familiale discrétionnaire pour lequel une somme lui est payable, mais non encore payée. L'ARC peut-elle confirmer que les revenus d'intérêts, réalisés par la Fiducie au cours d'une année d'imposition sur le montant de 375 000 $ non encore payé et investi par la Fiducie, peuvent être répartis au cours de cette année d'imposition au Bénéficiaire B à titre de revenu d'un bien qui constitue une participation dans la fiducie, et non au Bénéficiaire A pour qui la somme de 375 000 $ était originalement payable?

Position Adoptée: Oui, en présumant que le revenu d'intérêts est payable en vertu de l'acte de fiducie et selon la discrétion du fiduciaire au Bénéficiaire B au cours de cette année d'imposition.

Raisons: Selon l'article 909 du C.c.Q., sont du capital, entre autres, les biens dont on tire des fruits et revenus, le remploi des fruits et revenus, le prix de la disposition d'un capital ou son remploi. L'article 910 C.c.Q. prévoit que les fruits et les revenus sont ce que le bien produit sans que sa substance soit entamée. Sont classées parmi les revenus les sommes d'argent que le bien rapporte, tels les loyers, les intérêts, les dividendes. En vertu des dispositions applicables du C.c.Q., le gain en capital réalisé par une fiducie fait généralement partie du capital de la fiducie. Cependant, pour fins fiscales, la portion imposable d'un gain en capital réalisé par une fiducie fait partie du revenu de la fiducie. À cet égard, la définition de revenu prévue au paragraphe 108(3) de la L.I.R. ne s'applique pas à l'égard des paragraphes 104(6), (13) et (21).

5 October 2012 Roundtable, 2012-0454041C6 F - Choix fiscal sans formulaire prescrit

Principales Questions: Comment un contribuable produisant sa déclaration par voie électronique peut-il exercer un choix fiscal lorsqu'il n'y a pas de formulaire prescrit?

Position Adoptée: Un contribuable peut indiquer dans le logiciel qu'il fait un choix et le logiciel créera un champ indicateur Choix. Ceci est également possible avec TED. Le fait de compléter ce champ ne constitue pas un choix. Il est conçu uniquement pour nous informer qu'un formulaire de choix ou une lettre / note contenant des renseignements requis est également présenté en format papier.

Raisons: Contrainte logistique

5 October 2012 Roundtable, 2012-0453141C6 F - RCA, prohibited investment

CRA Tags
207.62, 207.5(1)
whether split-dollar arrangement entails an advantage depends on the particulars

Principales Questions: Whether a split-dollar arrangement creates an advantage for the purpose of proposed subsection 207.5(1)?

Position Adoptée: Possible but it is a question of fact.

Raisons: There is a large variety of split-dollar

5 October 2012 Roundtable, 2012-0451261C6 F - Foreign entity classification

CRA Tags
248, 104
listing of most important criteria for foreign entity classification/separate legal personality not determinative

Principales Questions: What are the essential characteristics to be considered in order to classify a foreign entity as a corporation, a trust or a partnership for the purposes of the Act?

Position Adoptée: Question of facts.

Raisons: Previous positions.

5 October 2012 Roundtable, 2012-0453181C6 F - Person affiliated with RESP and RDSP

CRA Tags
146.1, 146.4, 248(25), 251.1
both a subscriber and beneficiary of RESP can be affiliated with such trust

Principales Questions: Whether a beneficiary of and/or a contributor to or under a section 146.1 Registered Education Savings Plan or a section 146.4 Registered Disability Savings Plan is a person affiliated with the particular registered plan.

Position Adoptée: General comments provided.

Raisons: Question of fact.

5 October 2012 Roundtable, 2012-0453961C6 F - Copropriété indivise (50-50) d'un triplex

CRA Tags
40(2)(b), 54 "résidence principale"
allocation of lived-in triplex unit to total interest in triplex sold might be made on relative floor area basis if no qualitative variations

Principales Questions: Comment doit être calculé le gain en capital imposable d'un particulier détenant, à titre de copropriétaire indivis, une quote-part de 50% dans un triplex dont il utilise l'un des logements comme résidence principale?

Position Adoptée: Commentaires généraux.

Raisons: Le gain en capital du particulier dépend de la valeur de l'unité de logement utilisée par le particulier comme résidence principale par rapport à la valeur de sa quote-part indivise dans le triplex au moment de son acquisition ainsi qu'au moment où il en est disposé.

5 October 2012 Roundtable, 2012-0451251C6 F - Excess of foreign tax withheld at source

CRA Tags
126(1), 18(1)(a), 20(11)
foreign withholdings on American depositary receipts in excess of Treaty-limited rate does not qualify as an income tax
Words and Phrases
income or profits tax
tax withheld in excess of Treaty-rate is not deductible as an expense

Principales Questions: Whether a Canadian taxpayer can claim a foreign tax credit in respect of an amount of foreign taxes withheld in excess of the limit established under the applicable treaty?

Position Adoptée: No.

Raisons: Application of the ITA and previous positions.

5 October 2012 Roundtable, 2012-0454141C6 F - Déductibilité des frais afférents à un véhicule

CRA Tags
6(1)(b)
s. 6(1)(b) inclusion and s. 8(1)(h.1) deduction where allowance received for daily travel only in excess of 40 kilometres

Principales Questions: Est-ce que la position énoncée dans l'interprétation 2010-0387391E5 à l'égard du nombre de déplacements dans la situation donnée représente toujours notre position?

Position Adoptée: L'opinion énoncée dans la question qui nous été soumise n'est plus valide depuis le 15 juillet 2011. Une allocation fondée sur un taux de 0,44$ du kilomètre reçue par l'employé devrait être incluse dans le calcul de son revenu en vertu de l'alinéa 6(1)b).

Raisons: La loi.

5 October 2012 Roundtable, 2012-0451271C6 F - Residence of a trust

CRA Tags
104
trust residency determination focuses on where in fact there is the exercise of authority over significant decisions

Principales Questions: Relevance of certain facts in respect of a trust's residency determination.

Position Adoptée: General comments.

Raisons: Question of fact.

5 October 2012 Roundtable, 2012-0454121C6 F - Automobiles de collections

CRA Tags
6
use of average purchase-cost range approach for computing standby charge where multiple vintage cars held by corporation and controlled by shareholder

Principales Questions: Comment calculer l'avantage imposable pour les fins de 15 (5), 6(1)e) et 6(2) lorsque des automobiles de collection détenues par une société sont mises à la disposition d'un particulier?

Position Adoptée: Question de fait.

Raisons: Commentaires généraux.

5 October 2012 Roundtable, 2012-0453151C6 F - fractionnement de revenu de pension

CRA Tags
146.3, 248(8), 60.03
last RRIF annuitant inclusion on death under s. 146.3(6) does not qualify for splitting

Principales Questions: Est-ce que la LIR permet le fractionnement du revenu provenant d'un FERR dans une situation donnée?

Position Adoptée: Pas dans la situation donnée.

Raisons: Un montant réputé reçu en vertu du paragraphe 146.3(6) n'est pas un paiement prévu par un fonds enregistré de revenu de retraite, ou en provenant, aux fins de la définition de « revenu de pension » au paragraphe 118(7).

5 October 2012 Roundtable, 2012-0454021C6 F - Expiration d'un arrangement

CRA Tags
ITR 6205, 110.6(8)
purpose of Reg. 6205(2) re estate freezes and employees
Words and Phrases
arrangement

Principales Questions: L'ARC peut-elle définir ce qu'elle considère comme un « arrangement » et à quel moment pouvons-nous considérer qu'il y a eu expiration de l'arrangement aux fins du paragraphe 6205(2) R.I.R.?

Position Adoptée: Aucune.

Raisons: Les questions de savoir d'une part, ce qui constitue un arrangement dans une situation particulière donnée et d'autre part, dans le cadre de cette situation, à quel moment cet arrangement prend fin en sont de fait. Par ailleurs, l'ARC n'a pas élaboré de lignes directrices sur ce qui constitue un arrangement aux fins de ce Règlement. Nous pourrions cependant examiner cette question dans le cadre d'une décision anticipée pour une situation particulière donnée.

5 October 2012 Roundtable, 2012-0454131C6 F - Caractère raisonnable d'une allocation automobile

CRA Tags
6(1)(b), ITR 7306
reasonable car allowance potentially can exceed Reg. 7306 levels/Treasury Board rates will be accepted

Principales Questions: a) L'ARC peut-elle préciser si une directive a été donnée à ses vérificateurs afin que les allocations pour l'usage d'un véhicule à moteur qui excèdent les limites prévues à l'article 7306 R.I.R. soient systématiquement considérées comme n'étant pas raisonnables aux fins de l'alinéa 6(1)b) L.I.R.?
b) L'ARC peut-elle préciser si elle considère comme raisonnable une allocation pour l'usage d'un véhicule à moteur qui respecte les montants établis par le SCTC, dans le cas où toutes les autres exigences de la loi sont autrement respectées?

Position Adoptée: a) Aucune directive n'a été donnée aux vérificateurs de l'ARC en ce sens.
b) Les plafonds prévus à l'article 7306 R.I.R. ne sont qu'un guide afin de déterminer le caractère raisonnable d'une allocation. On considère comme raisonnable les taux que fixe le SCTC.

Raisons: Position de longue date.

5 October 2012 Roundtable, 2012-0451231C6 F - Gifts to American charities

CRA Tags
149.1(1), Treaties Article XXI(7)
U.S. charities are not qualified donees under Art XXI(7) of U.S. Convention

Principales Questions: Whether charitable foundations are allowed to make gifts to section 501(c)(3) US charities, because of paragraph 7 of article XXI of the U.S. Tax Convention?

Position Adoptée: No.

Raisons: American charities are not deemed to be qualified donees under paragraph 7 of article XXI of the Canada-U.S. Tax Convention. Proposed changes to subsections 149.1(3) and 149.1(4).

5 October 2012 Roundtable, 2012-0453171C6 F - TFSA - Survivor payments to more than one survivor

CRA Tags
207.01(1)
CRA allows contributions by two survivors totaling what would have qualified with only one survivor

Principales Questions: 1) In situations where an individual who was the holder of several TFSAs dies leaving more than one survivor, and survivor payments are made to each survivor, does subparagraph (d)(iii) of the definition of "exempt contribution" in subsection 207.01(1) apply where the survivor payment made to each survivor come from a separate arrangement that ceased, because of the individual's death, to be a TFSA? 2) If subparagraph (d)(iii) applies, would the Minister allow an amount greater than nil in different scenarios?

Position Adoptée: 1) Yes. 2) A contribution in an amount greater than nil could generally be allowed by the Minister pursuant to subparagraph (d)(iii), provided that the amount to be designated by both survivors is equal to or less than the amount that would otherwise be eligible to be designated as an "exempt contribution" under paragraph (d) of this definition, if there were only one survivor.

Raisons: 1) Wording of subparagraph (d)(iii) of the definition of "exempt contribution", which applies if payments qualifying as "survivor payment" under paragraph (b) of the definition of "exempt contribution" are made to more than one survivor, regardless of whether the survivor payments come from the same or from separate arrangements that ceased, because of the individual's death, to be a TFSA. 2) Our response to Question 15 of the Round Table on the Taxation of Financial Strategies and Instruments at the 2010 APFF Conference.

5 October 2012 Roundtable, 2012-0453201C6 F - Règles d'attribution- séparation & décès

CRA Tags
73(1), 74.5(3), 74.2, 74.1(1), 13(1), 248(1), 74.5(1)
s. 74.5(3) busting of attribution occurs even if they were living separate and apart for under 90 days before the death of the transferee common-law spouse
recapture from rental property is property income from that property

Principales Questions: 1. Le seuil de 90 jours qui est cité dans la définition de « conjoint de fait » au paragraphe 248(1) L.I.R., s'applique-t-il au paragraphe 74.5(3) L.I.R.?
2. S'il est établi que les contribuables vivaient séparés l'un de l'autre en raison de l'échec de leur union de fait, qui, du cédant ou du cessionnaire, devra s'imposer sur : a) les revenus de location tirés à partir du moment de la séparation et jusqu'au décès du cessionnaire? b) le gain en capital découlant de la disposition réputée au décès? et c) la récupération d'amortissement découlant de la disposition réputée au décès?

Position Adoptée: 1. Le seuil de 90 jours ne s'applique pas aux fins du paragraphe 74.5(3) L.I.R. Ainsi, la question de savoir si deux particuliers vivent « séparés pour cause d'échec du mariage ou de l'union de fait » est une question de fait. 2. a) Le cessionnaire; b) Le cédant, à moins que celui-ci effectue conjointement avec le représentant légal du cessionnaire, le choix prévu à l'alinéa 74.5(3)b) L.I.R. pour l'année d'imposition au cours de laquelle la disposition de l'immeuble locatif est réputée avoir eu lieu; c) Le cessionnaire.

Raisons: 1. Position antérieure de l'ARC dans le document 2012-043802; 2. a) L'alinéa 74.5(3)a); b) L'alinéa 74.5(3)b) L.I.R. Celui-ci requiert que le cédant et le cessionnaire choisissent conjointement de se prévaloir de cet alinéa pour prévenir l'application des règles d'attribution à l'article 74.2; c) L'alinéa 74.5(3)a), étant donné que la nature d'une récupération d'amortissement s'assimile à la nature de la dépense d'amortissement qui a été réclamée par le passé – cette dépense était pour un immeuble locatif, donc la récupération sera un revenu provenant du bien.

25 September 2012 Roundtable, 2012-0457521C6 - BC CTF Conference 2012 - subsection 164(6)

CRA Tags
164(6), 70(5)

Principal Issues: Deductibility of probate and related fees by the estate.

Position: May be.

Reasons: Question of fact.

25 September 2012 Roundtable, 2012-0457611C6 - BC Tax Conference 2012 Question #5

CRA Tags
149(5)

Principal Issues: CRA's position of various payment plans in respect of membership fees for a NPO that offers dining, recreational or sporting facilities for its members.

Position: General comments provided

Reasons: CRA's position is that interest income, regardless or source, is considered to be income from property for the purpose of subsection 149(5). The determination of whether a payment plan includes income from property is a question of fact.

12 June 2012 Roundtable, 2012-0442941C6 - STEP Roundtable – June 2012 - Question 4

CRA Tags
70(1)

Principal Issues: (a) Whether subsection 70(1) is limited to the types of income specified therein, or does it apply generally to all items of income payable on a periodic basis? (b) Would a bonus which is habitually paid to an owner/manager constitute a bonus paid on a periodic basis? (c) Would interest paid on a guaranteed investment certificate or on a term deposit only once on maturity be considered to be paid on a periodic basis? (d) Does subsection 70(1) apply to undeclared dividends which are paid on a periodic basis?

Position: (a) The list in subsection 70(1) is not exhaustive; however, whether the provision applies to a particular item is a question of fact and law. (b) It is a question of fact whether a contractual obligation exists. (c) Yes (d) No

Reasons: (a) Subsection 70(1) includes the phrase ``other amount payable periodically``. (b) See paragraph 19.1 of IT-212R3 (c) Since interest accrues on a daily or other periodic basis, such interest is considered to be payable on a periodic basis even though it may not be due until maturity (d) Undeclared dividends would not be included in the deceased individual`s income under subsection 70(1). A shareholder is not entitled to a dividend until it is declared.

17 May 2012 Roundtable, 2012-0444131C6 - Policy Initiatives

Principal Issues: Update on policy initiatives under consideration by International and Large Business Directorate's International Tax Division

Position: Comments provided.

17 May 2012 Roundtable, 2012-0444071C6 - Transfer Pricing

CRA Tags
247(2)

Principal Issues: Update on paragraph 247(2) assessments and the role of the CRA's Transfer Pricing Review Committee.

Position: Comments provided.

17 May 2012 Roundtable, 2012-0444141C6 - International Initiatives - ILBD

Principal Issues: Discussion of CRA's involvement in JITSC, the OECD, the Global Forum on Transparency and Exchange of Information and the Forum on Tax Administration.

Position: Comments provided.

Reasons: Refer to document.

17 May 2012 IFA Roundtable, 2012-0444041C6 - IFA 2012 - Beneficial Ownership

beneficial owner must have discretion for use

Summary under Treaties - Art. 11.

Principal Issues: Determination of beneficial ownership of Canadian-source income for the purposes of Canada's income tax treaties.

Position: Where income is received by a recipient in the capacity as agent or nominee, the recipient is not the beneficial owner. Where income is not received in the capacity as agent or nominee, the recipient is the beneficial owner if the payment is received for the recipient's own use and enjoyment and the recipient assumes risk and control over the payment.

Reasons: In conformance with applicable jurisprudence.

17 May 2012 IFA Roundtable, 2012-0444161C6 - Competent Authority Agreements

no deferral agreement where gain exempted

Summary under Treaties - Art. 13.

Principal Issues: Will the Canadian Competent Authority enter into an agreement to defer recognition of income, profit or gain where the income, profit or gain is exempted or excluded from taxation under the domestic laws of the residence state?

Position: No.

Reasons: Canadian Competent Authority requires taxpayers seeking a deferral agreement to demonstrate that income, profit or gain for which an agreement is being sought is only deferred - not exempted or excluded – from taxation under the domestic laws of the residence state.

25 September 2012 CTF Roundtable Q. 4, 2012-0457581C6 - CTF BC – Q4 Residency of a Trust

Principal Issues: Impact on the CRA published position in relation to the factors it considers indicative for purposes of establishing residency of a trust in light of the 2012 SCC decision in St. Michael Trust Corp.

Position: Residence of a trust is a question of fact to be determined according to the circumstances of each case - the SCC decision affirmed the CRA view that the residence of the trustee does not always determine the residence of the trust.

Reasons: Comments as previously published by the Directorate

28 May 2012 CTF Prairie Trust Roundtable, 2012-0444891C6 - CTF Prairie Conference- Trust payment to Minor

CRA Tags
104(13), 104(24)
note distribution notice to guardian

Principal Issues: 1. Evidence of payable to Minor from Trust

Position: 1.Promissory note to Guardian

Reasons: 1.Issue dealt with previously see 2010 Step q.2

12 June 2012 STEP CRA Roundtable, 2012-0442921C6 - STEP CRA Roundtable - June 2012 Q.9

CRA Tags
70(6.2), 70(5), 70(6)

Summary under s. 70(6.2).

Principal Issues: Whether CRA's position of not permitting the arbitrary subdivision of capital property for purposes of subsection 70(6.2) has changed.

Position: No

Reasons: Subsection 70(6.2) refers to "any property of the deceased taxpayer", not to a portion thereof. There is nothing in the provision that permits an election in respect of only a portion of the property.

12 June 2012 STEP CRA Roundtable, 2012-0442931C6 - 2012 STEP Question 8

CRA Tags
108(1), 104(5.8)

Principal Issues: Timing of the creation of a testamentary trust

Position: Question of fact, depends on the terms of the trust. The estate of the deceased and other trusts funded out of the residue of the estate will generally be testamentary trusts

Reasons: General comments provided - including comments from Assessing

13 September 2012 CICA Roundtable Q. 7, 2012-0453111C6 - CICA Conference Q7 - Alter ego trust

CRA Tags
128.1(10) "excluded right or interest", 128.1(4)(b), 108(7)

Principal Issues: Would a taxpayer be deemed to dispose of their interest in an alter ego trust upon emigration from Canada?

Position: Question of fact

Reasons: No deemed disposition if facts lead to a conclusion that the interest is an "excluded right or interest", or if the conditions in 128.1(4)(b)(iv) apply.

13 September 2012 CICA Compliance Roundtable, 2012-0453021C6 - Taxable Canadian Property

CRA Tags
248(1)

Summary under s. 248(1) - taxable Canadian property.

Principal Issues: Would a share of a corporation that is not listed on a designated stock exchange be taxable Canadian property if, at any time during the 60-month period that ended at the determination time, most of the value of the corporation's shares was directly derived from assets consisting of non-defaulted arm's length mortgages secured by real property situated in Canada?

Position: Generally, no.

Reasons: An interest in real property derived from a non-defaulted arm's length mortgage secured by real property is generally limited to an interest as security only, and subsection 248(4) of the Act clarifies that for the purposes of the Act, an interest in real property does not include an interest as security only derived by virtue of a mortgage.

29 May 2012 CTF Prairie Tax Roundtable, 2012-0445341C6 - Meaning of business as used in subsection 84(2)

CRA Tags
248(1), 84(2)
no differentiation on pipeline transactions between investment and active business corps

Summary under s. 84(2).

Principal Issues: Whether, in the context of applying subsection 84(2), CRA would differentiate between a corporation carrying on an active business and a corporation carrying on a business of earning income from property.

Position: In the context of applying subsection 84(2), the CRA would generally not differentiate between the two types of corporations.

Reasons: The CRA's view is that a broad meaning should be given to the word "business" as used in subsection 84(2) considering:
-the purpose and context of subsection 84(2);
-the rebuttable presumption stated by the Canadian Marconi Company v. The Queen decision;
-the definition of business in subsection 248(1);
-the positions previously taken.

Technical Interpretation - Internal

15 October 2012 Internal T.I. 2012-0452161I7 F - Frais de garde, revenu gagné, RQAP

CRA Tags
56(1)(r), 63(3) "revenu gagné", 56(1)(a)(iv)
Quebec Parental Insurance Plan (QPIP) benefits not included in earned income

Principales Questions: Est-ce que les prestations reçues dans le cadre du Régime québécois d'assurance parentale (RQAP) sont incluses dans le revenu gagné au sens du paragraphe 63(3)?

Position Adoptée: Non

Raisons: En vertu des propositions législatives du 16 juillet 2010, il est prévu que les prestations du RQAP soient incluses dans le calcul du revenu en vertu du sous-alinéa 56(1)a)vii) proposé. Par conséquent, ces prestations ne sont pas visées par aucun des alinéas de la définition de revenu gagné au paragraphe 63(3).