Income Tax Severed Letters - 2013-08-07

Ministerial Correspondence

3 July 2013 Ministerial Correspondence 2013-0489731M4 - Tax Treatment of Interest Income

CRA Tags
39(1)(b), 111(1)(b), 12(1)(c)

Principal Issues: Whether the Minister can forgive taxes on interest income when an investor loses his original investment.

Position: No. The interest income is generally taxable under the Income Tax Act, but the investor can claim a capital loss against past or future net capital gains.

Reasons: The legislation.

27 June 2013 Ministerial Correspondence 2013-0490251M4 - Taxation of Communal organizations

CRA Tags
143

Principal Issues: The taxation of Hutterite colonies.

Position: Communal organizations are treated for tax purposes as inter vivos trusts and are subject to special income tax rules under section 143 of the Act.

Reasons: Communal organizations are taxed at a level of taxation that is roughly comparable to the general tax treatment of other families in the farming community.

25 June 2013 Ministerial Correspondence 2013-0487101M4 - Personal Tax Credit - Spouse or Common-law Partner

CRA Tags
118(1)(a)

Principal Issues: 1. Taxpayer suggests use of taxable income for the purposes of calculating deduction under paragraph 118(1)(a).

Position: 1. The use of net income rather than taxable income is a question of tax policy.

Reasons: 1. The Legislation.

27 May 2013 Ministerial Correspondence 2013-0487151M4 - Kilometre Rates for Medical Expenses

CRA Tags
118.2(2)(h)

Principal Issues: 1. Taxpayer enquiry regarding rate setting process for the purposes of the medical expense tax credit.

Position: 1. Rate are set by the National Joint Council of the Public Service of Canada.

Reasons: 1. N/A.

27 May 2013 Ministerial Correspondence 2013-0486661M4 - Taxable Benefits - Group Sickness Plan

CRA Tags
6(1)(e.1)

Principal Issues: 1. Taxpayer is expressing concern with respect to application of new legislation dealing with taxable benefits relating to group sickness or accident insurance plans.

Position: 1. No position taken; referred to CRA.

Reasons: 1. New legislation.

8 May 2013 Ministerial Correspondence 2013-0479951M4 - Per kilometric rates for medical travel expenses

CRA Tags
118.2(2)(h)

Principal Issues: Why do Ontario and Quebec get higher travel (per kilometric) rates than any other provinces?

Position: The per kilometre rates the Canada Revenue Agency (CRA) uses for calculating travel expenses, including moving and medical expenses, are based on the annual kilometric rates set by the National Joint Council (NJC) of the Public Service of Canada.

Reasons: The CRA has always accepted the NJC rates as fair and reasonable.

2 May 2013 Ministerial Correspondence 2013-0483321M4 - Northern Residents Deduction

CRA Tags
110.7, ITR 7303.1

Principal Issues: 1. Eligibility of a community for the purposes of claiming the northern residents deduction.

Position: 1. The community is not currently in a prescribed zone. Any proposed changes to the Regulation must be initiated by the Department of Finance.

Reasons: 1. Regulation 7303.1.

30 April 2013 Ministerial Correspondence 2013-0485741M4 - Fitness and Arts Tax Credits

CRA Tags
118.03, 118.031

Principal Issues: 1. Eligibility of programs for either the fitness or arts tax credits.

Position: 1. A specific program cannot qualify for both the fitness and arts tax credits. If there are two distinct programs, the organization should issue two receipts or only one receipt that clearly shows the amount paid for each program.

Reasons: 1. The legislation.

Technical Interpretation - External

10 June 2013 External T.I. 2013-0477351E5 - Employer-provided in-house fitness facilities

CRA Tags
6(1)(a)

Principal Issues: Are employer-provided in-house fitness facilities a taxable benefit, if available to all employees?

Position: No

Reasons: CRA policy

5 June 2013 External T.I. 2013-0481381E5 - Transfer of Life Insurance Policy

CRA Tags
148(8)
Summary Under
Tax Topics - Income Tax Act - Section 148 - Subsection 148(8)

Principal Issues: Whether ITA 148(8) applies to the transfer of a policy where the policyholders are the parents of the life insured (son) under the policy and the policy is transferred to their son for no consideration?

Position: Yes.

Reasons: ITA 148(8) refers to the transfer of an interest of a policyholder.