Translations of recent severed letters

Bundle Date Translated severed letter Summaries under Summary descriptor
2020-05-20 8 April 2020 External T.I. 2016-0668991E5 F - Death of RRSP or RRIF annuitant Income Tax Act - Section 146.3 - Subsection 146.3(6.2) s. 146.3(6.2) deduction can be less than the formula amount and does not depend on timely receipt of T4RIF – but applies only when the last annuitant of a RRIF dies
Income Tax Regulations - Regulation 214 - Subsection 214(4) T4RSP issued to surviving spouse rather than to deceased where transfer of entire refund of premiums to surviving spouse’s RRSP and RRSP is fully distributed
Income Tax Regulations - Regulation 215 - Subsection 215(4) T4RIF issued to surviving spouse rather than to deceased where transfer of entire eligible amount to surviving spouse’s RRSP or RRIF, and RRIF is fully distributed
Income Tax Regulations - Regulation 205 - Subsection 205(1) issuer required to issue T4RSP or T4RIF within a reasonable time after notification of death received after February filing date
15 May 2020 External T.I. 2020-0848511E5 F - Deferred salary leave plans (DSLPs) Income Tax Regulations - Regulation 6801 - Paragraph 6801(a) - Subparagraph 6801(a)(i) employer can defer the 6-year deferral period, e.g., for those with COVID-disrupted travel, pending Finance review
2020-04-29 9 March 2020 External T.I. 2013-0490301E5 F - Société exploitant une EPSP Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(p) - Subparagraph 18(1)(p)(ii) PSB can deduct for auto leasing costs or loan interest expense to extent of benefit conferred on the individual qua employee rather than shareholder – but no CCA deduction (other than under s. 18(1)(p)(iii))
2020-04-22 14 April 2020 APFF Roundtable Q. 5, 2020-0845431C6 F - Avantage imposable - télétravail / Taxable benefit Income Tax Act - Section 6 - Subsection 6(1) - Paragraph 6(1)(a) employer reimbursement of up to $500 for the cost of a telework computer is non-taxable during COVID-19
2020-04-08 22 January 2020 External T.I. 2014-0559281E5 F - T5008 Income Tax Act - Section 49 - Subsection 49(1) writing of call option (with deemed nil ACB) is reported as having nil “cost” on T5008
Income Tax Act - Section 40 - Subsection 40(1) - Paragraph 40(1)(a) - Subparagraph 40(1)(a)(i) option writer can deduct its expenses from deemed s. 49(1) proceeds
Income Tax Regulations - Regulation 230 - Subsection 230(2) “cost” of call options closed out by writer is nil, not the cost of offsetting call option purchase/cost re short sale is the FMV of the borrowed shares
Income Tax Act - Section 9 - Computation of Profit cost of short sale is FMV of borrowed shares
2020-03-04 11 October 2019 APFF Roundtable Q. 1, 2019-0819401C6 F - Interaction between par. 84.1(1)(b) and 129(1(a) Income Tax Act - Section 129 - Subsection 129(1) reversal of position that s. 84.1(1)(b) dividends do not generate dividend refunds
Income Tax Act - Section 84.1 - Subsection 84.1(1) - Paragraph 84.1(1)(b) s. 84.1 dividend can generate dividend refund
11 October 2019 APFF Roundtable Q. 2, 2019-0812611C6 F - Résiliation d'un bail - Lease cancellation Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(z) s. 20(1)(z) applies notwithstanding s. 18(1)(a) but is subject to source rule in s. 20(1) preamble
Income Tax Act - Section 40 - Subsection 40(2) - Paragraph 40(2)(b) lease termination payment received by tenant was referable to complete period of holding of (annually renewed) leasehold interest
Income Tax Act - Section 54 - Principal Residence lease termination payment received by tenant was eligible for principal residence exemption
Income Tax Act - Section 20 - Subsection 20(1) s. 20(1)-preamble source rule applied
11 October 2019 APFF Roundtable Q. 3, 2019-0812621C6 F - Changement d’usage-impact sur l’exemption pour résidence principale Income Tax Act - Section 54 - Principal Residence - Paragraph (c) reporting of principal residence exemption when the residence had been expanded from 1 to 2 duplex units
Income Tax Act - Section 45 - Subsection 45(3) method for making s. 45(3) election where conersion of duplex
Income Tax Act - Section 43 - Subsection 43(1) allocation of ACB between units in a duplex
11 October 2019 APFF Roundtable Q. 5, 2019-0812641C6 F - Professional fees incurred in the context of a litigation with CRA Income Tax Act - Section 60 - Paragraph 60(o) - Subparagraph 60(o)(i) s. 60(o)(i) generates professional fee deductibility from the moment that CRA informs that there is an audit
11 October 2019 APFF Roundtable Q. 6, 2019-0812651C6 F - CDA and wind-up of a subsidiary Income Tax Act - Section 87 - Subsection 87(2) - Paragraph 87(2)(z.1) IT-126R2 applicable in determining when CDA of sub is added to parent’s CDA
Income Tax Act - Section 88 - Subsection 88(1) IT-126R2 applied re timing of addition of the wound-up subsidiary’s CDA
11 October 2019 APFF Roundtable Q. 8, 2019-0821311C6 F - APFF 2019 Q.8: Surplus Documentation Income Tax Regulations - Regulation 5901 - Subsection 5901(2) - Paragraph 5901(2)(b) failure to prepare surplus accounts will preclude a late-filed Reg. 5901(2)(b) election
Income Tax Act - Section 230 - Subsection 230(1) taxpayer must prepare adequate records to support surplus computations
11 October 2019 APFF Roundtable Q. 9, 2019-0812781C6 F - Acquisition of control and trusts Income Tax Act - Section 256 - Subsection 256(7) - Paragraph 256(7)(i) - Subparagraph 256(7)(i)(ii) discretion of a spousal trust’s trustees to encroach on capital in favour of the spouse likely offends s. 256(7)(i)(ii)
11 October 2019 APFF Roundtable Q. 10, 2019-0812691C6 - Consolidated safe income Income Tax Act - Section 55 - Subsection 55(2.1) - Paragraph 55(2.1)(c) negative safe income of a subsidiary need not reduce the SIOH of the parents’ shares
11 October 2019 APFF Roundtable Q. 11, 2019-0812701C6 F - Paragraph 251(5)(b) and convertible debenture Income Tax Act - Section 251 - Subsection 251(5) - Paragraph 251(5)(b) debenture with a contingent conversion right and non-participating conversion ratio entailed loss of CCPC status
11 October 2019 APFF Roundtable Q. 12, 2019-0812711C6 - Part IV Income Tax Act - Section 186 - Subsection 186(2) two 50% shareholders of two corporations likely acting in concert to produce connectedness
Income Tax Act - Section 251 - Subsection 251(1) - Paragraph 251(1)(c) two 50% shareholders of two corporations likely acting in concert to produce connectedness
11 October 2019 APFF Roundtable Q. 13, 2019-0812721C6 F - Late-Filed CDA Election Income Tax Act - Section 83 - Subsection 83(3) directors can authorize a late capital dividend election after the dividend declaration
11 October 2019 APFF Roundtable Q. 15, 2019-0812741C6 F - TOSI and interest income earned by a trust Income Tax Act - Section 120.4 - Subsection 120.4(1) - Split Income - Paragraph (d) - Subparagraph (d)(i) beneficiaries of a family trust can benefit from the excluded debt exception from the TOSI rules
Income Tax Act - Section 108 - Subsection 108(5) - Paragraph 108(5)(a) source character of trust income maintained in the absence of s. 108(5)(a) appplication
11 October 2019 APFF Roundtable Q. 16, 2019-0812751C6 F - 74.4(2) and 120.4 interaction Income Tax Act - Section 74.4 - Subsection 74.4(2) main purpose test can still apply even where designated persons are subject to TOSI
Income Tax Act - Section 74.4 - Subsection 74.4(2) - Paragraph 74.4(2)(g) only s. 74.4(2)(g) provides relief from the joint application of the TOSI and s. 74.4(2) rules
11 October 2019 APFF Roundtable Q. 17, 2019-0812761C6 F - Entreprise - Business Income Tax Act - Section 248 - Subsection 248(1) - Business Stewart as the leading case on “business”
11 October 2019 APFF Roundtable Q. 18, 2019-0812771C6 F - TOSI Actively Engaged Income Tax Act - Section 120.4 - Subsection 120.4(1) - Excluded Business - Paragraph (a) loss of excluded business exception when specified individual went on extended mat leave or disability
Income Tax Act - Section 120.4 - Subsection 120.4(1) - Reasonable Return potential application of reasonable return exception where on mat leave or disability
11 October 2019 APFF Roundtable Q. 19, 2019-0825031C6 F - Service téléphonique réservé
2020-02-26 23 January 2020 External T.I. 2019-0796121E5 F - Déduction pour résidence des membres du clergé Income Tax Act - Section 8 - Subsection 8(1) - Paragraph 8(1)(c) s. 8(1)(c) does not entail any home office requirement

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