Income Tax Severed Letters - 1996-02-23

Principal Issues:

Are acquisition of new leasing properties of different type still exempt pursuant to Reg 1100(16) ?

Position:

yes, provided no new business

Reasons:

Principal Issues:

Can admin fees charged by the trustee of an RRSP trust put the trust in an overdraft position?

Position:

If terms of plan allow for trustee to collect from the rrsp trust then yes.

Reasons:

Principal Issues:

Would an employee savings plan implemented by a non-profit organization be considered an SDA?

Position:

Question of Fact

Reasons:

Principales Questions:

Dans quelle catégorie doit être inclus un réservoir souterrain pour emmagasiner l'essence?

Position Adoptée:

Principal Issues:

Investment in a business corporation as a qualified investment for an RRSP

Position:

Routine reply on 4900(6) and (12) with update for October 31/95 passage of amendments (no discussion of transitional rules with respect to property acquired between Dec. 2/92 and November 29/94).

Reasons: N/A

Principal Issues:

nominal lease costs

Position:

not prudent in most situations where a lessee is paying only nominal lease costs to advise clients to calc automobile benefits "as usual"

Reasons:

Principales Questions:

1. Est-ce que la coopérative n'opère qu'une entreprise?
2.Quel est le sens de "principale" pour les fins de 181.1(3)f)?
3.S'il y a plus d'une entreprise d'importance équivalente, est-ce que l'on peut prétendre qu'il n'y a pas d'entreprise principale?

Position Adoptée:

Principal Issues:

Whether an amount paid to a medical practitioner for hair transplant surgery can be regarded as having been made "in respect of ... medical services" for the purposes of paragraph 118.2(2)(a) of the Income Tax Act.

Position:

Generally yes

Reasons:

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

									953281
XXXXXXXXXX							M. Eisner

Attention: XXXXXXXXXX

February 6, 1996

Dear Sirs:

Re: Private Health Services Plans

This is in reply to your letter of December 15, 1995 concerning the above subject in relation to same-sex spouses.

Principal Issues:

Principal Issues:

Principal Issues:

Principal Issues:

Whether repayable amounts related to a physician's overbilling in respect of services rendered can be carried back to the taxation year in which they were included in a taxpayer's income and deducted therefrom or whether they can only be deducted in the year in which the repayment is made. If they cannot be carried back, would the repayment reduce "December 31, 1995 income".

Position:

Depends on all the relevant facts of a particular situation.

The matching principle under GAAP should be applied to determine the truer picture of a taxpayer's profit under subsection 9(1). However, the determination of profit is also a matter of law and subject to the provisions of the Act. Paragraph 18(1)(a) provides that no deduction shall be made in respect of an outlay or expense except to the extent that it was made or incurred by the taxpayer for the purpose of gaining or producing income from the business or property. Paragraph 18(1)(e) prevents the deduction of an amount as, or on account of, a reserve, a contingent liability or amount or a sinking fund except as expressly permitted by this Part.

Reasons:

Principal Issues:

taxation of free travel thru frequent flyer program

Position:

taxable to the extent points acquired thru employer paid travel

Reasons:

Principal Issues:

Whether a company that offers consulting and bookkeeping services, as well as the preparation of financial statements and tax returns is subject to the provisions of new paragraph 249.1(1)(b) of the proposed legislation in respect of fiscal periods contained in the Notice of Ways and Means Motion dated November 27, 1995, which was tabled in the House of Commons on December 12, 1995.

Position

Depends of the facts of each particular situation.

Paragraph 249.1(1)(b) will apply to a professional corporation that would, if the fiscal period ended at the end of the calender year in which it began, be in the period a member of a partnership. The term "professional corporation" will be defined in subsection 248(1) to mean a corporation that carries on the professional practice of an accountant, dentist, lawyer, medical doctor, veterinarian or chiropractor.

Reasons:

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

XXXXXXXXXX							953130

Attention: XXXXXXXXXX

January 31, 1996

Dear Sirs:

Re: Canada - Japan Income Tax Convention

Principal Issues:
whether receipts issued by XXXXXXXXXX provided to learning disabled/other children may qualify for purposes of 118.2(2)(e)

Position:
question of fact, individual determination required. Insufficient info provided to even opine whether institute may be considered to provide equipment, facilities or personnel "specially" for the care or care and training of individuals suffering a particular handicap

Reasons:

Principales Questions:
i)Est-ce que des montants payés à un centre de conditionnement physique pour permettre aux employés en général d'avoir accès à des équipements constitue un avantage pour un employé donné?
ii)Est-ce qu'un montant versé par un employeur à un centre de massothérapie et de thalassothérapie, constitue un avantage exclu en vertu de la division 6(1)a)(iv)(A) de la Loi?

Principales Questions:

Est-ce que les revenus tirés des services rendus à l'étranger par une société constitue un revenu «tiré d'une entreprise exploitée au Canada» aux fins de l'article 125 de la Loi?

Position Adoptée:

Principal Issues:

Paragraph 118.2(2)(a)

1.whether a payment made to an electrologist for electrolysis services rendered in a province is a qualifying medical expense
2.whether a payment made to a dental hygienist (who satisfies the medical practitioner requirement) for electrolysis services is a qualifying medical expense
3.whether a payment made to a nurse (who satisfies the medical practitioner requirement) for electrolysis services is a qualifying medical expense
4.whether a payment in respect of electrolysis made to a physician is a qualifying medical expense where the service is performed by an employee (an electrologist) of the physician

Position:

1.no
2.no
3.it might not
4.Yes - provided all the necessary requirements are satisfied

Reasons:

Principal Issues:

Transfer of property to a protective trust. Is paragraph (e) of section 54 applicable?

Position:

Yes.

Reasons:

Principal Issues:

Whether remuneration paid to non-resident persons who are Locally-Engaged Staff of the Canadian Embassy in Saudi Arabia is subject to tax in Canada under subsection 115(2) of the Act.

Position:

Yes.

Reasons: