Income Tax Severed Letters - 1996-05-03

Miscellaneous

27 March 1996 Miscellaneous 960991A - MEALS AND BEVERAGES AT GOLF CLUBS

Unedited CRA Tags
18(1)(l) 67.1

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.

		March 27,1996
	Ed Gauthier	HEADQUARTERS
	Director General	B. Kerr
	Audit Directorate 	957-2139
		960991

Expenses incurred at a Golf Club - Subparagraph 18(1)(l)(i)

Ruling

2096 Ruling 9633803 - ARTICLE 13 - CANADA - NETHERLANDS TREATY

Principal Issues: Application of Article 13 of Canada - Netherlands Treaty

Position: Gain on disposition of shares exempt

Reasons: See Issue Sheet at end of Ruling

XXXXXXXXXX 3-963380

Technical Interpretation - External

2 May 1996 External T.I. 9606585 - RRSP, ANNUITY, COURT

Unedited CRA Tags
56(1)(d) 146(12)(a)

Principal Issues:

Where creditors are awarded ownership rights to an annuity in accordance with bankruptcy laws, are the annuity payments income to the creditors?

Position:

Yes

Reasons:

1 May 1996 External T.I. 9608665 - CHIROPRACTORS CAN'T CERTIFY ELIGIBILITY FOR 118.3

Unedited CRA Tags
118.3 118.2(2)(c)

Principal Issues:

whether a chiropractor can "certify" that the requirements for the disability tax credit have been met with a secondary issue relating to the need for attendant care

Position:

While a chiropractor cannot certify for the purpose of the disability tax credit because it must be certified by a medical doctor rather than a medical practitioner, a chiropractor can certify that the requirements of 118.2(2)(c) have been met in respect of remuneration for attendant care in the home of the patient for the purpose of the medical ex tax credit

Reasons:

1 May 1996 External T.I. 9609095 - DEFINITION OF "LIABILITIES" IN SUBSECTION 130.1(9)

Unedited CRA Tags
130.1(9)

Principal Issues:

Whether redeemable, retractable preferred shares issued by a MIC are "liabilities" as defined in subsection 130.1(9) in light of new section 3860 of the CICA handbook.

Position:

The legal form of the financial instrument would generally determine its tax treatment.

Reasons:

29 April 1996 External T.I. 9609515 - PATRONAGE DIVIDENDS AND QUALIFIED INVESTMENTS

Unedited CRA Tags
135(4) 135(1)

Principal Issues:

1.Whether our position concerning the allocation of patronage dividends when shares of a co-op are held by a member's RRSP conflicts with an earlier opinion relating to bonus interest payments made by a credit union on deposits in RRSPs.

2.What would the Department consider to be "proper documentation" when a member's equity in a co-op is transferred to an RRSP.

Position:

1.There is no conflict.

2.No comment.

Reasons:

29 April 1996 External T.I. 9606615 - LSVCC CLAWBACK, T4RSP SUPP

Unedited CRA Tags
6706(3)(a)

Principal Issues:

T4RSP reflect LSVCC redemption amount before or after clawback?

Position:

After clawback

Reasons:

29 April 1996 External T.I. 9610675 - 60429

Unedited CRA Tags
205(g) 206(1)(g)(v)

Principal Issues:

Are there any prescribed persons for purposes of 205(g) or 206(1)(g)(v)?

Position:

No

Reasons:

25 April 1996 External T.I. 9610565 F - ENTREPRISE DE PRESTATION DE SERVICES PERSONNELS

Unedited CRA Tags
125(7)

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 5-961056

A l'attention de XXXXXXXXXX

Le 25 avril 1996

Mesdames, Messieurs,

Objet: Utilisation des pertes autres qu'en capital d'une société

24 April 1996 External T.I. 9611205 - INTEREST INCOME AND EXPENSE

Unedited CRA Tags
12(4) 12(1)(c) 12(3) 20(1)(c)

Principal Issues:

What is timing of interest income and expense ?

Position:

In accordance with subsection 12(3) or 12(4) and 20(1)(c)

Reasons:

23 April 1996 External T.I. 9610705 - AMALGAMATION, AFFILATE, RETIRING ALLOWANCE

Unedited CRA Tags
87(1) 60(j.1)

Principal Issues:

Where an employer corporation amalgamates with its parent, would the amalgamated corporation be considered an affiliate of the employer corporation for purposes of retiring allowance payment?

Position:

Yes

Reasons:

23 April 1996 External T.I. 9605975 - MORTGAGE INVESTMENT CORPORATIONS

Unedited CRA Tags
130.1(6)(f)(i)

Principal Issues:

Whether the beneficial ownership of a mortgage acquired by a MIC pursuant to the terms of a trust agreement would qualify as a debt owing to the MIC that was secured on residential property for the purposes of subparagraph 130.1(6)(f)(i).

Position:

This is a question of fact which can only be determined after a review of the terms of the trust agreement.

Reasons:

23 April 1996 External T.I. 9526075 F - RUPTURE DU MARIAGE PARTAGE PENSIONS

Unedited CRA Tags
56(1)(a)(i)

Principales Questions:

Est-ce que le montant versé par un régime supplémentaire de prestations à un conjoint en règlement des droits du mariage est imposable pour le conjoint ou le participant?

Position Adoptée:

22 April 1996 External T.I. 9605585 - SOCIAL ASSISTANCE PAYMENTS

Unedited CRA Tags
56(1)(u) Reg. 233

Principal Issues:

Whether an information slip (T5007 Supplementary) is required to be issued under Regulation 233 for housing subsidies paid in respect of low income or disabled individuals.

Position:

Yes (on the assumption that the subsidies are described in subsection 233(1))

Reasons:

22 April 1996 External T.I. 9613085 - STOCK OPTION

Unedited CRA Tags
7(1)(e)

Principal Issues:
Correction of 5-950432

Position:
Wording 7(1)(e)

Reasons: N/A

22 April 1996 External T.I. 9607725 - EMPLOYMENT EXPENSES

Unedited CRA Tags
8(2)

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.

		960772
XXXXXXXXXX	M. Eisner

Attention: XXXXXXXXXX

April 22, 1996

Dear Sirs:

18 April 1996 External T.I. 9606285 - INVESTING OF FUNDS, PARTNERSHIP, OPTIONS

Unedited CRA Tags
204.4(2)

Principal Issues:

1) is the purchase of a unit of a partnership involved in an active business considered investment of funds for 132(6)(b)(i)?

2) Can a DPSP invest in Fund where fund holds debt of an employer participating in the DPSP?

3) Can fund hold foreign currency on temporary basis?

4)Is writing of put option and covered call options investing of funds?

Position:

1) No 2) No 3) No 4) Yes

Reasons:

17 April 1996 External T.I. 9531215 - TRANSFER FROM FOREIGN PLAN TO RPP

Unedited CRA Tags
6(1)(g)(ii) 56(1)(a)(i) 147.2(4)

Principal Issues:

Whether deduction under 147.2(a) or(b) available in respect of employee amounts out of a foreign (EBP) pension plan transferred tax-free to RPP.

Position:

No deduction allowed.

Reasons:

17 April 1996 External T.I. 9608815 - ATTRIBUTION-GRANDPA INVESTS $ FOR GRANDCHILDREN

Unedited CRA Tags
74.1(2)

Principal Issues:

whether family member must report interest income earned on investments purchased by that family member

Position:

he must report the interest earned on the GICs purchased with money gifted by him to his grandchildren even though the interest is being placed in their accounts

Reasons:

17 April 1996 External T.I. 9603935 - HOME PURCHASE - REIMBURSEMENT OF GST

Unedited CRA Tags
6(1)(a)

Principal Issues:

An employee purchases a newly constructed home in respect of a relocation requested by the employee's employer. The employer reimburses the employee for the GST he or she paid in respect of the new home. Does the reimbursement constitute a taxable benefit under paragraph 6(1)(a) of the Income Tax Act?

Position: Yes

Reasons:

17 April 1996 External T.I. 9610645 - ALPHABET SHARES-TAXABLE PREFERRED SHARES

Unedited CRA Tags
248(1)

Principal Issues:

Alphabet Shares - Are they taxable preferred shares ?

Also - if a separate subsidiary is incorporated to carry on separate lines of business, will the shares of the subsidiary be considered to have been acquired in the "ordinary course of business" for puposes of 112(2.1) ?

Position:

Question of fact - yes if dividend entitlement is limited by virtue of share terms or agreement relating to shares. See file #940103 for analysis.

Question of fact, but generally no - see 1984 Round Table - Question #62

Reasons:

17 April 1996 External T.I. 9604485 - HOME BUYERS PLAN WITHDRAWAL

Unedited CRA Tags
146.01 146(8)

Principal Issues:

Reason for trust company refusing to let annuitant cash in investment in RRSP for withdrawal under Home Buyers' Plan.

Position:

Don't know.

Reasons:

17 April 1996 External T.I. 9604715 - CCA - REMAINDER INTEREST IN PROPERTY

Unedited CRA Tags
20(1)(a)

Principal Issues:

Whether, capital cost allowance can be claimed by a taxpayer who has a remainder interest in property.

Position:

CCA cannot be claimed in respect of the remainder interest. However, the taxpayer may be able to claim capital cost allowance if he has a leasehold interest in the property.

Reasons:

16 April 1996 External T.I. 9600705 - AUTOMOBILE STANDBY CHARGE

Unedited CRA Tags
6(2) 13(7) 6(1)(e)

Principal Issues:

A parent corporation that is controlled by one individual sells an automobile to its subsidiary for proceeds equal to fair market value. The issue is whether the standby charge for the purposes of subsection 6(2) of the Income Tax Act (the Act) should be computed on the basis of the cost of the automobile to the parent or by reference to the cost of the automobile to the subsidiary.

Position:

The original cost to the parent would be used.

Reasons:

16 April 1996 External T.I. 9528655 F - SOCIÉTÉ D'INVESTISSEMENT

Unedited CRA Tags
ART 149(1)o.2) ART 248(26)

Principales Questions:

1.Aux fins de la disposition 149(1)o.2)(iii)(B) de la Loi de l'impôt sur le revenu, une société ne peut émettre de créances. Quelle est la portée de cette restriction, une avance entre actionnaires et un découvert bancaire sont-ils visés?

2.L'emprunt afférent à l'acquisition d'une part sociale dans une société de personne détenant des biens immeubles à compte capital constitue-t-il un emprunt dans le but de tirer un revenu d'un droit sur un immeuble ou directement d'un bien immeuble et ce, aux fins du sous-alinéa 149(1)o.2)(ii) de la Loi?

Position Adoptée:

15 April 1996 External T.I. 9609005 F - PENSION ALIMENTAIRE - SOMME GLOBALE

Unedited CRA Tags
60b)

Principales Questions:

Est-ce qu'une somme globale payable en vertu d'un jugement peut-être déduite dans le calcul du revenu, soit en vertu de l'alinéa 60b) (pension alimentaire) ou d'une autre disposition de la Loi?

Position Adoptée:

15 April 1996 External T.I. 9612125 - FOOD AND BEVERAGES AT GOLF CLUBS

Unedited CRA Tags
18(1)(l) 67.1

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.

		961212
XXXXXXXXXX	B. Kerr

Attention: XXXXXXXXXX

April 15, 1996

Dear Sir/Madam:

Re: Subparagraph 18(1)(l)(i) of the Income Tax Act (the "Act")

12 April 1996 External T.I. 9532845 F - SITE D'ENFOUISSEMENT SANITAIRE

Unedited CRA Tags
ART 12(1)a) ART 9(1) ART 20(1)m)

Principales Questions:

1-Une société opérant un site d'enfouissement sanitaire reçoit des sommes de ses clients pour, entre autres, des services qui seront offerts lors de la fermeture du site et l'entretien après la fermeture du site. Peut-elle prendre une provision annuelle en vertu de l'alinéa 20(1)m) de la Loi de l'impôt sur le revenu sur les sommes reçues visant de tels services, incluant les revenus d'intérêts gagnés sur les fonds de réserve?

2- Si une partie des sommes reçues sont déposées dans un compte en fiducie, la société doit-elle s'imposer sur les revenus d'intérêts?

Position Adoptée:

1 April 1996 External T.I. 9600205 - PRE-CONSTRUCTION DESIGN ACTIVITIES - CONSTUCTION?

Unedited CRA Tags
CLASS 34(j)

Principal Issues:

Whether pre-construction design activities considered to be "construction".

Position:

Not considered to be "construction".

Reasons:

Technical Interpretation - Internal

26 April 1996 Internal T.I. 9601547 - DAMAGES RELATING TO SEXUAL HARASSMENT

Unedited CRA Tags
3

Principal Issues:

whether damages relating to sexual discrimination and harassment are part of the retiring allowance

Position:

the facts of this particular situation indicate that the $10,000 in damages for harassment is not taxable and no withholding is required from such payment or from the $2500 legal fee reimbursement which is included in income under 56(1)(l.1)

Reasons:

22 April 1996 Internal T.I. 9608007 - STRUCTURED SETTLEMENTS

Unedited CRA Tags
56(1)(d) 12.2

Principal Issues:

An individual (or his estate in the event of death) became entitled to receive periodic payments pursuant a structured settlement (Paragraph 5 of IT-365R2). The individual died before the payments were made. The individual's parents are the beneficiaries of his estate. We have been requested to comment on the tax consequences in respect of the commutation of the remaining payments in the event that a court would permit such a commutation.

Position:

Comments were not provided.

Reasons:

17 April 1996 Internal T.I. 9607667 - MOVING EXP PAID BY EMPLOYER ('EE INTO CANADA)

Unedited CRA Tags
62 64.1

Principal Issues:

whether moving costs reimbursed by employer for employees to commence work in Canada result in a taxable benefit to the employee and/or whether expenses are deductible under s 62

Position:

may be no taxable benefit to employees, depends on the types of expenses reimbursed; however, the fact that employees move from a location outside Canada is immaterial for this determination. No ded'n under section 62 under any circumstances

Reasons:

10 April 1996 Internal T.I. 9604037 - SALARY CONTINUATION, RETIRING ALLOWANCE

Unedited CRA Tags
248(1) 60(j.1)

Principal Issues:

Can salary continuation payments qualify as a retiring allowance?

Position:

Yes

Reasons:

10 April 1996 Internal T.I. 9608706 - MEDICAL EXPENSES - TUITION FEES, XXXXXXXXXX

Unedited CRA Tags
118.2(2)(e)

Principal Issues:

Whether tuition fees paid to a learning centre for gifted children qualify as medical expenses under paragraph 118.2(2)(e) of the Act.

Position:

Tuition fees to the XXXXXXXXXX do not qualify.

Reasons:

Ministerial Letter

19 April 1996 Ministerial Letter 9613048 - Guaranteed Home Sale Plan (GHSP)

Unedited CRA Tags
6(1)(a)

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.

DIRECTOR GENERAL'S OFFICE ADM 961052
AUTHOR
SUBJECT OR CORPORATE CASE FILE

April 19, 1996

MEMORANDUM FOR DENIS LEFEBVRE
SUBJECT: Guaranteed Home Sale Plan (GHSP)

17 April 1996 Ministerial Letter 9607288 - FISCAL PERIODS - RRSP

Unedited CRA Tags
249.1 146

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.

MINISTER/DM'S OFFICE 96-01271M
ADM'S OFFICE
RETURN TO INCOME TAX RULINGS
AND INTERPRETATIONS DIRECTORATE
15th Floor, Albion Tower
April 17, 1996

XXXXXXXXXX

Dear XXXXXXXXXX