Income Tax Severed Letters - 2018-05-30

Ruling

2017 Ruling 2016-0663831R3 - Standard Loss Consolidation

Unedited CRA Tags
245; 20(1)(c); 112(1); 55(2)

Principal Issues: Whether a lossco will be entitled to apply its non-capital losses against the interest income generated as part of the loss consolidation transactions and whether profitcos will be entitled to deduct the corresponding interest expense.

Position: Yes.

Reasons: Conforms to our requirements for such rulings.

Technical Interpretation - External

2 May 2018 External T.I. 2017-0717831E5 - Alter ego trust in year of beneficiary's death

Unedited CRA Tags
104(4); 104(6); 104(13.4); 104(24); 248(1)
alter ego trust is entitled to a deduction for ordinary income distributions in the year of death
distributed ordinary income earned in shortened year is deductible

Principal Issues: For taxation years ending after 2015, in the year that the primary beneficiary of an alter ego trust dies, can the trust claim a deduction in respect of the income earned by the trust and which became payable to that beneficiary prior to their death?

Position: A deduction may be claimed in respect of amounts which became payable to the primary beneficiary prior to their death; however, no deduction is available in respect of capital gains and other amounts recognized by the trust upon the death of the beneficiary pursuant to subsections 104(4) to 104(5.2) (the “deemed disposition rules”) and subsection 12(10.2).

Reasons: Element B of the formula in paragraph 104(6)(b).

20 April 2018 External T.I. 2018-0753161E5 - Technical interpretation for issues under audit

Unedited CRA Tags
103(1.1)

Principal Issues: Whether ITRD will provide a technical interpretation to a taxpayer where the issue is under audit.

Position: No.

Reasons: Paragraph 7(c) of IC 70-6R7 explains that a technical interpretation will not be issued to a taxpayer where the request relates to a matter that is under audit.

12 April 2018 External T.I. 2017-0724441E5 - Medical expense

Unedited CRA Tags
118.2(2)(i); 118.2(2)(m); Reg 5700(c); Reg 5700(h)

Principal Issues: Whether the costs to purchase various items qualify as a medical expense under subsection 118.2(2) of the Income Tax Act.

Position: No.

Reasons: Legislation; previous positions.

11 April 2018 External T.I. 2017-0690361E5 - medical expense tax credit

Unedited CRA Tags
118.2

Principal Issues: Is the cost of prescription swimming goggles an eligible medical expense for the purpose of the medical expense tax credit?

Position: Yes, if the swimming goggles are prescribed by a medical practitioner or optometrist specifically for the treatment or correction of a specified defect of vision.

Reasons: The legislation.

25 May 2017 External T.I. 2017-0684351E5 - Section 19.1

Unedited CRA Tags
19.1

Principal Issues: Whether section 19.1 applies to deny a deduction for expenses to be incurred by a Canadian taxpayer to advertise on a foreign internet website.

Position: No.

Reasons: See below.

Technical Interpretation - Internal

25 October 2017 Internal T.I. 2016-0658171I7 - Regulation 5900(3) and subparagraph 93.1(2)(d)(i)

Unedited CRA Tags
91(5); Regulation 5900(3); 93.1(1) and (2); 113(1); 96(1); 4(1)(a)

Principal Issues: Whether a subsection 91(5) deduction is taken into account in determining the amount referred to in subparagraph 93.1(2)(d)(i).

Position: Yes.

Reasons: Textual, contextual and purposive interpretation of subparagraph 93.1(2)(d)(i) and Regulation 5900(3).