Principal Issues: What are the tax consequences if mineral subsurface rights are transferred to a taxable Canadian corporation on a tax deferred basis?
Position: Where the Taxpayer transfers the Property to a corporation pursuant to subsection 85(1), the agreed amount can be any amount up to the fair market value of the Property. The deemed proceeds of disposition will reduce the Taxpayer’s CCOGPE balance if any. If the Taxpayer’s CCOGPE balance becomes negative, the amount is deducted from the CCDE. If the Taxpayer's CCDE balance becomes negative, the negative amount will be included in the Taxpayer’s income for that taxation year.
a partnership is not fiscally transparent for patronage dividend purposes
129
Principal Issues: Can a taxpayer that is a cooperative corporation and a member of a partnership deduct, under subsection 135(1), patronage dividends based on business the members have conducted with the partnership?
Position: A taxpayer may deduct patronage dividends payments that are computed in relation to business it has done with or on behalf of its customers. Where a partnership has customers for purposes of section 135, the deduction under that section must be made at the partnership level.
Reasons: Subsection 135(1) sets out the conditions under which a taxpayer may deduct payments it makes to its customers pursuant to allocations in proportion to patronage, which are defined as amounts computed in relation to business done with or on behalf of the taxpayer’s customers. Subsection 96(1) of the Act applies to treat the partnership as a separate person for purposes of section 135 of the Act.
guidelines on when cash is used in an active business
296
Principal Issues: Whether a particular corporation would be considered to be a “specified small business corporation” as defined in subsection 4901(2) of the Income Tax Regulations (“Regulations”) such that its shares would be qualified investments for an RRSP in accordance with subparagraph 4900(14)(a)(i) of the Regulations?
Position: Question of fact. General views provided to assist in determination.
Principal Issues: Provide information regarding the measure on reproductive technologies (the “Technologies”) announced in the 2017 Federal Budget regarding the application of the medical expense tax credit to individuals that require medical intervention to conceive a child.
Position: The measure clarified the METC to also apply to individuals who claim expenses paid for Technologies even where such treatment is not medically indicated because of the medical condition of infertility.
Reasons: The measure clarified the legislation so individuals who are patients (as defined for the purpose of the METC) and require medical intervention in order to conceive a child will be eligible to claim the same expenses that would generally only be eligible for individuals to claim who require the Technologies on account of medical infertility.
members of a partnership treated as the payers of RCA withdrawals made to the partnership employees for source deduction purposes
279
Principal Issues: In applying subsection 106(1) of the Income Tax Regulations with respect to a payment to a recipient that is a partnership, how does one determine the amount to be withheld under that subsection?
Position: The amount to be withheld should be equal to the amount of tax that the members of the partnership would, in aggregate, be expected to pay under the Income Tax Act with respect to the payment.
