Income Tax Severed Letters - 2013-01-30

Ruling

2012 Ruling 2012-0440021R3 - Standard split-up butterfly

CRA Tags
55(3)(b)

Principal Issues: Standard butterfly.

Position: Rulings given.

Reasons: Complies with paragraph 55(3)(b).

Ministerial Correspondence

6 November 2012 Ministerial Correspondence 2012-0451611M4 F - Fiducie d'athlète amateur

CRA Tags
12(1)(z), 143.1, 146.2(1), 143.1(1)

Principales Questions: Diverses questions concernant le fonctionnement des fiducies d'athlètes amateurs.

Position Adoptée: Voir la lettre.

Raisons: Loi de l'impôt sur le revenu.

30 October 2012 Ministerial Correspondence 2012-0451901M4 - private health services plans

CRA Tags
248(1)

Principal Issues: General question about private health services plans

Position: General comments provided.

Reasons: The law.

Technical Interpretation - External

7 January 2013 External T.I. 2012-0452611E5 - Subsection 13(21.2)

CRA Tags
73(1), 13(21.1)(e)(iii), 70(5)
Summary Under
Tax Topics - Income Tax Act - Section 13 - Subsection 13(21.2)

Summary under s. 13(21.2).

Principal Issues: Whether the terminal loss denied under subsection 13(21.2) can be claimed on the death of a taxpayer.

Position: No.

Reasons: A loss on the transfer of property to a spouse which is suspended by reason of subsection 13(21.2) would be suspended indefinitely if the transferor died more than 30 days after the transfer but before the spouse disposed of the property since the death of a taxpayer is not one of the "triggering events" for the purposes of subparagraph 13(21.2)(e)(iii) and there is no mechanism for the deceased taxpayer to claim the loss in a taxation year that occurs after the death.

7 December 2012 External T.I. 2012-0440411E5 F - Performing services in Canada

CRA Tags
153(1)(a), 115(1)(a), ITR 104(2)
Summary Under
Tax Topics - Income Tax Regulations - Regulation 104 - Subsection 104(2)
non-resident programmer who comes to Canada only occasionally and is connected to the Quebec server does not exercise a Canadian employment

Summary under Reg. 104.

Principales Questions: Whether systems analysts who are non-resident employees and perform their work physically outside of Canada are performing services in Canada.

Position Adoptée: No

Raisons: The systems analysts are not performing services in Canada unless they are physically present in Canada.

29 November 2012 External T.I. 2012-0438891E5 - Prescribed Prize - XXXXXXXXXX

CRA Tags
56(1)(n), ITR 7700

Principal Issues: Whether the prizes awarded in the XXXXXXXXXX are prescribed prizes within the meaning of section 7700 of the Income Tax Regulations.

Position: In light of the information provided, yes.

Reasons: The award satisfies the criteria of section 7700 of the Regulations.

29 November 2012 External T.I. 2012-0433451E5 - Change in Use - Election under 45(3)

CRA Tags
45(3)
Summary Under
Tax Topics - Income Tax Act - Section 45 - Subsection 45(3)

Principal Issues: Whether a taxpayer would be able to file an election under subsection 45(3) of the Act where the taxpayer's property was first used as a principal residence, then rented, and later became a principal residence.

Position: Yes, provided all the relevant conditions are met.

Reasons: Paragraphs (b) and (d) of the definition of principal residence in section 54 of the Act.

23 November 2012 External T.I. 2012-0441091E5 - Software License Agreement

CRA Tags
ITA 212(1)(d)
Summary Under
Tax Topics - Income Tax Act - Section 212 - Subsection 212(1) - Paragraph 212(1)(d) - Subparagraph 212(1)(d)(vi)
licence of custom sofware reproduced in manufactured goods

Principal Issues: Whether withholding tax is applicable to payments made under a computer software licensing agreement?

Position: Question of fact whether the payments are exempt from withholding tax by virtue of subparagraph 212(1)(d)(vi) of the Act.

Reasons: Consistent with the CRA's published position regarding payments made for the right to use, reproduce or distribute computer software programs.

20 November 2012 External T.I. 2012-0449671E5 - Accrued Interest Income Reported on T5 Slips

CRA Tags
20(1)(p), ITR 201(4), 12(11), ITR 201(1)(b), 20(1)(l), 12(4), 12(3), 12(1)(c)
Summary Under
Tax Topics - Income Tax Act - Section 12 - Subsection 12(4)
suspension of debenture interest payments

Summary under s. 12(4).

Principal Issues: Whether accrued interest should be reported on T5 slips.

Position: Yes

Reasons: Accrued interest is taxable under the Act and is reportable on the T5 as per the Regulations.

15 November 2012 External T.I. 2012-0456201E5 F - Frais médicaux - calcul et dépenses non admissibles

CRA Tags
118.2(1), 118.2(2)(a), ITR 5700, 118.2(2)(m), 118.2(2)(o)
Summary Under
Tax Topics - Income Tax Act - Section 118.2 - Subsection 118.2(2) - Paragraph 118.2(2)(o)
emergency call service through telemonitoring ineligible
Summary Under
Tax Topics - Income Tax Regulations - Regulation 5700 - Section 5700 - Paragraph 5700(e)
non-custom shoes would not qualify
Summary Under
Tax Topics - Income Tax Act - Section 118.2 - Subsection 118.2(1)
expenses that were incurred, paid for and receipted within same 12-month period cannot be deferred

Principales Questions: 1. Les frais reliés à la télésurveillance centrée sur la personne, les frais d'achat ou de location d'un dispositif de repérage, ainsi que et les frais d'utilisation du service lié au dispositif de repérage sont-ils admissibles à titre de frais médicaux au sens du paragraphe 118.2(2) de la Loi de l'impôt sur le revenu (la "Loi") ?
2. Est-ce que des chaussures orthopédiques qui ne sont pas faites sur mesure peuvent se qualifier de frais médicaux admissibles au sens du paragraphe 118.2(2) de la Loi et de l'article 5700 du Règlement de l'impôt sur le revenu?
3. Est-ce qu'une partie des frais médicaux admissibles, ayant fait l'objet de reçus, payés et engagés au cours d'une période de 12 mois se terminant au cours d'une année donnée peuvent être déduits dans une période de 12 mois se terminant au cours d'une année d'imposition suivante?

6 November 2012 External T.I. 2012-0455951E5 - Flexible Benefits

CRA Tags
6(1)(a), 5
Summary Under
Tax Topics - Income Tax Act - Section 5 - Subsection 5(1)

Principal Issues: Whether an employee is required to include in income the value of flexible credits received as part of their annual incentive award?

Position: An employee is required to include the value of all performance related awards in employment income, and for years after 2012, even if the credits are converted to a contribution to a HCSA.

Reasons: Past positions and new administrative position regarding redirecting bonuses to a HCSA.

6 November 2012 External T.I. 2012-0452531E5 - Satisfactory Evidence of Payment

CRA Tags
78(4)
Summary Under
Tax Topics - General Concepts - Payment & Receipt
promissory note accepted as payment
Summary Under
Tax Topics - Income Tax Act - Section 78 - Subsection 78(4)

Principal Issues: Whether a demand note payable which is accepted as absolute payment of salary owing to an employee constitutes satisfactory evidence of the payment of that salary.

Position: An amount may be considered to have been "paid" by promissory note if an agreement between the parties clearly indicates that the note was accepted as absolute payment. It should be noted that under paragraph 153(1)(a) of the Act, an employer is required to withhold an amount from any remuneration that is being paid; additional evidence of payment is that the related payroll withholdings were remitted on time.

Reasons: The debt is satisfied by the receipt of a promissory note which has been accepted as absolute payment.

2 November 2012 External T.I. 2012-0440241E5 - moving expenses - expanded territory

CRA Tags
248(1), 62(1)
Summary Under
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Eligible Relocation

Principal Issues: Does an expanded territory qualify as a new work location for purposes of the definition of eligible relocation?

Position: Question of fact. In this case yes.

Reasons: The significant expansion in size of the sales territory required the taxpayer to move to carry out the additional responsibilities on a permanent basis such that there was a new work location for purposes of the definition.

31 October 2012 External T.I. 2012-0432981E5 - repayable award and inducements

CRA Tags
6(1), 56(1)(r), 56(3), 5(1), 12(1)(x), 63, 56(1)(n)

Principal Issues: 1) What is the proper income tax treatment for a repayment of sums received by an individual under Medical Services Agreement?

5 October 2012 External T.I. 2012-0434191E5 - Children's Arts Tax Credit

CRA Tags
118.031, ITR 9401

Principal Issues: Are the costs of driving school eligible for the CATC?

Position: No

Reasons: Legislation

Conference

5 October 2012 Roundtable, 2012-0453971C6 F - Fiducies successives/disposition 21 ans

CRA Tags
104(4)
Summary Under
Tax Topics - Income Tax Act - 101-110 - Section 104 - Subsection 104(4) - Paragraph 104(4)(b) - Subparagraph 104(4)(b)(ii)
deemed retroactive date of formation per CCQ of child trusts as residuary testamentary beneficiaries of spousal trusts accelerated s. 104 deemed disposition date

Principales Questions: Quelle sera la première date de disposition réputée des biens des Fiducies-enfants?

Position Adoptée: Le 20 octobre 2012

Raisons: La date de création de chacune des Fiducies-enfants serait le 20 octobre 1991. Ainsi, aux termes du sous-alinéa 104(4)b)(ii) L.I.R., la première date de disposition réputée des biens de ces fiducies serait le 20 octobre 2012.

5 October 2012 Roundtable, 2012-0454001C6 F - Travail d'un associé d'une société de personnes

CRA Tags
103(1.1)
Summary Under
Tax Topics - Income Tax Act - 101-110 - Section 103 - Subsection 103(1.1)
number of employees not necessarily relevant to determining relative partner contribution

Principales Questions: Afin de déterminer la part raisonnable du revenu ou de la perte revenant à l'un des associés d'une société de personnes, l'évaluation par l'Agence du revenu du Canada ("ARC") de l'importance du travail accompli par un associé dépend-il du nombre d'employés travaillant pour cette société de personnes?

Position Adoptée: Question de fait. Le temps de travail accompli et l'expertise d'un associé par rapport à ceux des autres associés sont les facteurs à prendre en considération aux fins du paragraphe 103(1.1).

Raisons: Position émise dans notre bulletin d'interprétation IT-231R2.

5 October 2012 APFF Roundtable, 2012-0451281C6 F - Usufruit étranger

CRA Tags
248(3), 248(1)
Summary Under
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Disposition
whether the formation of a usufruct under overseas law triggers a disposition turns on such law
Summary Under
Tax Topics - Income Tax Act - Section 248 - Subsection 248(3)
French usufruct does not create a trust

Principales Questions: La création d'un usufruit à partir d'une juridiction étrangère peut-elle être assimilée à la création d'une fiducie en droit fiscal canadien? Si oui, quels sont les critères de rattachement qui doivent être considérés? Si non, quelles seraient les conséquences fiscales du transfert d'un usufruit?

Position Adoptée: Question de fait.

Raisons: Lorsqu'un usufruit n'est pas régi par le droit de la province de Québec, le paragraphe 248(3) L.I.R. n'est pas applicable. Dans ce contexte, il faut déterminer si l'établissement d'un usufruit entraîne une disposition aux fins de la L.I.R. Cette détermination devrait se faire à la lumière du cadre juridique établi par la juridiction étrangère applicable au démembrement du droit de propriété du bien.

5 October 2012 APFF Roundtable, 2012-0455431C6 F - Changement de bourse

CRA Tags
248(1)
Summary Under
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Disposition
no disposition on exchange for identical shares on US exchange

Summary under s. 248(1) - disposition.

Principales Questions: Le fait qu'une action d'une société soit dorénavant cotée à une autre bourse de valeurs entraîne-t-il une disposition de l'action pour celui qui la détient?

Position Adoptée: Question de fait.

Raisons: Dans la mesure où les droits et privilèges rattachés à une action de la Société cotée à une bourse de valeurs sont les mêmes que ceux rattachés à l'action de la Société qui était cotée à une autre bourse de valeurs, le changement d'une action de la Société cotée sur une bourse de valeurs pour une action de la même société cotée sur une autre bourse de valeurs ne constituerait pas une disposition aux fins de la L.I.R.