Principal Issues: Are foster parents able to claim the child tax credit under paragraph 118(1)(b.1) of the Act in respect of foster children for which they receive monthly funds from a government agency?
Position: No.
Reasons: The extended meaning of "child" in subsection 252(1) of the Act does not include a foster child for whom the foster parents receive support payments from an agency responsible for the child's care.
Submitted by Anonymous (not verified) on Sun, 11/29/2015 - 02:11
meaning of trader or dealer in securities
A "trader or dealer in securities" includes not only brokers or professionals who are registered or licensed professionally, but also includes...
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Principal Issues: Whether a "day-trader" is precluded from electing under 39(4) and whether, if the election under 39(4) is not available, income from trading through a corporation would be considered active business income for the purposes of the small business deduction.
Position: If the taxpayer's dealings amount to carrying on a business, then the taxpayer is precluded from electing under 39(4). If this is the case, then the business income could be considered active business income for the purposes of the small business deduction.
Submitted by narmstrong on Sun, 04/12/2020 - 01:11
general discussion of ss. 118.5(1)(a)(ii) and (ii.2)(B)
Are continuing education courses offered to individual members of a professional order eligible? After indicating that the courses offered by...
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Principales Questions: Est-ce que des cours de formation continue offert par XXXXXXXXXX peuvent être admissibles au crédit d'impôt pour frais de scolarité?
Submitted by narmstrong on Sun, 04/12/2020 - 01:49
s. 84.1)1) engaged on sale of Opco to Sonco for note
Would the capital gains deduction be available to an individual who disposes of all of the shares of "Opco") to another corporation ("Sonco")...
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Principales Questions: Est-ce qu'un particulier pourrait déduire un montant de déduction pour gains en capital dans le calcul de son revenu imposable s'il vendait la totalité des actions qu'il détient dans le capital-actions d'une société donnée en faveur d'une société dont la totalité des actions du capital-actions est détenue par son fils majeur?
Principal Issues: 1. Are fees paid to board member (honoraria) subject to income tax deductions at source? 2. Should such fees and deductions be reported on a T4 or T4A?
Position: Remuneration paid to board members is considered income from office and subject to withholding of tax at source. The total income and any withholdings for the year should be reported on a T4 information slip.
Reasons: In accordance with the applicable legislation.
Submitted by narmstrong on Sun, 04/12/2020 - 02:24
ordinarily inhabited and co-owned unit in a triplex can qualify
In confirming that a unit in a triplex can qualify as a principal residence, CRA stated:
Where the units in a triplex are separate units, it is...
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Principales Questions: Est-ce qu'un logement dans un triplex peut être désigné à titre de résidence principale pour les fins de la définition de résidence principale prévue à l'article 54?
Position Adoptée: Généralement, oui.
Raisons: Lorsque les logements d'un triplex sont des logements distincts, chacun des logements peut être considéré comme un logement pouvant être désigné à titre de résidence principale selon la définition de cette expression prévue à l'article 54 dans la mesure toutefois où toutes les conditions de la définition de résidence principale prévue à l'article 54 sont par ailleurs respectées.
Submitted by narmstrong on Sun, 04/12/2020 - 02:53
HBP available where the home is acquired by way of gift
Is the home buyers' plan (HBP) available where the home is acquired by way of gift? CRA responded:
[Y]ou must have entered into a written...
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Principales Questions: Est-ce que la donation se qualifie d'acquisition pour les fins de la définition de " montant admissible principal " du paragraphe 146.01(1)?
Position Adoptée: Oui
Raisons: Acquérir une habitation par donation est une acquisition au sens de l'alinéa 146.01(1)b) de la définition " montant admissible principal ". Utilisation de l'expression acquisition dans la LIR.
Principal Issues: Whether losses realized in the fact situation provided would be considered an allowable business investment loss pursuant to paragraph 38(c) of the Income Tax Act.
Submitted by narmstrong on Sat, 04/18/2020 - 01:28
holding land within ½ hectare area under separate title does not preclude exemption applying to such adjacent land
The correspondent sold two pieces of land adjacent to the land on which the individual’s principal residence was located to an arm’s length...
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Principales Questions: Est-ce qu'un contribuable peut demander l'exemption pour résidence principale à l'égard de la disposition d'un fonds de terre dans une situation donnée?
Principal Issues:
What is the amount that a RCA trust must include under subparagraph (b)(i) of the definition of "refundable tax" in subsection 207.5(1) in the situation where the RCA trust only receives the taxable portion of a capital gain from a unit trust?
Position:
In the situation described, only the amount received would need to be included.
Principal Issues: Whether the unused tuition tax credit is available to a student who is either bankupt or insolvent.
Position: 1. The unused tuition tax credit is not available to a student who is bankrupt; but it is available to a trustee when filing an in-bankruptcy return.
2. The unused tuition tax credit is available to a student who is insolvent.
Reasons: 1. Paragraphs 128(2)(a), (e), (f), and (g).
2. Section 128 only applies to bankruptcies.
Submitted by Anonymous (not verified) on Sun, 11/29/2015 - 02:12
despite Tremblay, CRA may challenge tuck-under transactions that do more than extract safe income
A non-resident holds 40% of the common shares of Opco and all of the shares of Holdco (also a Canadian private corporation) which, in turn, holds...
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Principales Questions: Substantially all of the assets of a corporation ("Holdco") would consist in an interest of 40% in the common shares of the capital stock of an operating corporation ("Opco"). A non resident person ("Non-Resident") would own all of the issued and outstanding shares of the capital stock of Holdco. Non-Resident would also own 60% of the common shares of the capital stock of Opco. In order to simplify the corporate structure, Non-Resident would like to hold directly the shares of the capital stock of Opco owned by Holdco. For administrative reasons, Non-Resident does not want to amalgamate Opco with Holdco. Instead, Non-Resident would transfer his shares of the capital stock of Holdco to Opco, in consideration for the issuance by Opco of preferred shares of its capital stock. Holdco would then be wound-up into Opco.
Position Adoptée: General comments provided. The Tremblay decision contains a strong dissent based on the Smythe decision rendered by the Supreme Court of Canada. Furthermore, the general anti-avoidance rule was not invoked in the Tremblay case. Consequently and despite the Tremblay decision, the CRA will continue to challenge abusive surplus stripping arrangements, including those taking the form of "tuck under" transactions. However, it is possible that, in appropriate circumstances, subsection 84(2) or 245(2) would not apply to a "tuck under" transaction. For example, the CRA maintains its long standing position that subsections 84(2) and 245(2) should not apply to "tuck under" transactions carried out in the context of "safe income extraction" scenarios.
Principal Issues: Whether "support" for the purposes of the Disability Tax Credit transfer only means financial support
Position: It means both financial support (involving providing money to acquire basic necessities) and non-financial support (directly providing such things as shelter, clothing, and food).
s. 128(1); 230(4) to (7); s. 5800 ITR; Rule 68 BIA General Rules
Principal Issues: Who is responsible for keeping the books and records of a bankrupt corporation and for how long?
Position: The trustee must keep the books and records for at least six years from the end of the last taxation year to which they relate, or until discharged, whichever is less.
Reasons: On the bankruptcy of a corporation the trustee is deemed to be the agent of the corporation whereupon subsections 230(4) to (7) and reg. 5800 apply to the trustee. Upon discharge the agency relationship ends and the BIA General Rules permit the trustee to return the books and records to an officer of the corporation.
Principal Issues: Is a signing bonus (previously included in employment income) repaid to the employer when the employee terminates his employment contract early, deductible under paragraph 8(1)(n) of the Act?
Position: Yes
Reasons: The word "period" in paragraph 8(1)(n) of the Act refers to the critical day or days under a contract that the employer must have worked to retain a signing bonus. Where the employee is required to repay the entire bonus if he did not work the very last day of the contract, then that day is the critical "period throughout which" he did not perform the duties of the office or employment which gives rise to the repayment.
Principal Issues: Whether a payment made by an employer in settlement of grievances for failure to follow proper procedures is taxable.
Position: Requires a review of the grievances and settlement agreement to determine the purpose of the payment, but most likely taxable as employment income.
Reasons: Jurisprudence has consistently viewed amounts that "arose clearly and unequivocally by virtue of the contract of employment and not as a result of some separate agreement or from motivations extraneous to the Collective Agreement" as employment income.
Principal Issues: Where a corporate taxpayer has filed for a particular taxation year a notice of revocation of a waiver, can the taxpayer file another waiver for that particular taxation year.
Position: If the particular taxation year is not statute-barred, the taxpayer can file another waiver.
Submitted by narmstrong on Sat, 04/18/2020 - 16:55
compensation paid in lieu of notice generally is a retiring allowance
Art. 2091 of the Civil Code of Québec (C.C.Q.). requires an employer to provide reasonable notice of termination, and Art. 2092 provides that...
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Principal Issues: Est-ce qu'une indemnité versée en lieu et place du délai de congé prévu à l'article 2091 C.c.Q. est une allocation de retraite ou un revenu d'emploi?
Position: Question de fait, généralement une allocation de retraite.
Reasons: Montant versé à l'égard de la perte par le contribuable d'une charge ou d'un emploi.
agreement was not a USA since it did not contain an outright transfer of the powers of the directors to the shareholders
549
Principales Questions: Status of a corporation as a CCPC where:
- a disqualifying shareholder controlled by a non-resident holds less than 41% of the voting shares of that corporation but more than 60% of the participating shares;
- a group of Canadian residents holds XXXXXXXXXX % of the voting shares of that corporation and XXXXXXXXXX % of the participating shares; and
- a trust is formed to hold the balance of the voting shares of that corporation (XXXXXXXXXX %), with the intent of keeping the CCPC status of the corporation.
Position Adoptée: In the particular case, the corporation is not a CCPC because a non-resident who controls the disqualifying shareholder has de facto control.
