Income Tax Severed Letters - 1996-05-31

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.

		960823

XXXXXXXXXX		M.P. Sarazin

May 30, 1996

Dear Sir:

Re: Self-Directed RRSP

Principal Issues:

allowances for room & board, & transportion to and from special work site

Position:

reasonable allowance is exempt if conditions of 6(6) are met

Reasons:

Principal Issues:

Whether loan repayment is a receipt for a cash basis farmer.

Position: 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.

		960774
XXXXXXXXXX	M.P. Sarazin

Attention: XXXXXXXXXX

May 24, 1996

Dear Sirs:

Re: Foreign Property and Mortgages

Principal Issues:

Whether deposit paid to XXXXXXXXXX school constitutes a charitable donation when forfeited.

Position:

No.

Reasons:

Principal Issues:

Whether share of cooperative corporation is a "qualifying share" if some members get patronage dividend but not in respect of consumer goods or services.

Position:

O.K. but note that in order to be an "allocation in proportion to patronage" all members in same situation should get dividend, not just some; also note problem with 4900(13).

Reasons:

Principal Issues:

Whether amount of cash and investments of corporation may be reduced by amount of loan from shareholders so that 90% of fmv test of assets can be met.

Position:

Question of fact whether cash is used in active business, but fact that it is borrowed from shareholders is irrelevant.

Reasons:

Principal Issues:

Parked Debt

1) Acquired by non-arm's length ?
2) Acquired by arm's length ?

Position:

1) Not a parked obligation
2) Yes, a parked obligation

Reasons:

Principal Issues:

whether legal fees incurred in connection with the enforcement of court ordered payments are deductible under the circumstances described.

Position:

1)legal fees to enforce payment of a lump sum payment of support which is not subject to tax are not deductible.

2)legal fess incurred to enforce payment of arrears of periodic support payments are deductible to the extent that they are incurred for the purpose of producing income from a property and are not outlays of a capital nature. They would only be deductible to the extent that they related to the enforcement of the pre-existing right to alimony or maintenance which would otherwise be taxable. This will be a question of fact.

Reasons:

Principal Issues:

Whether current employer "related" to former employer for purposes of 60(j.1).

Position:

General review of law.

Reasons:

Principales Questions:
Explications générales concernant 4900(12) et 4900(6)

Position Adoptée:
N/A

Principal Issues: cost amount of debt instruments

Position: routine

Reasons: routine

Position Adoptée:
Non.

Principal Issues:

General discussion of taxation consequences on death of RRIF annuitant where beneficiaries are the children and grandchildren.

Position: N/A

Reasons: N/A