Income Tax Severed Letters - 1996-05-31

Technical Interpretation - External

12 October 1996 External T.I. 9610125 - RRSP - SHARES OF GOLF CLUB

Unedited CRA Tags
4900

Principal Issues:

Is investment in a particular corporation a qualified investment for an RRSP

Position:

Routine reply on 4900(6) and (12) with additional comments with respect to non profit corporations.

Reasons: N/A

30 May 1996 External T.I. 9608235 - SHARES PRIVATE CO, RRSP

Unedited CRA Tags
146(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.

		960823
XXXXXXXXXX		M.P. Sarazin

May 30, 1996

Dear Sir:

Re: Self-Directed RRSP

28 May 1996 External T.I. 9609025 - XXXXXXXXXX TUITION AS A MEDICAL EXPENSE

Unedited CRA Tags
118.2(2)(e)

Principal Issues:

whether the XXXXXXXXXX offers specialized programs for learning disabled students & whether the basic fees paid for 2 students is deductible as a medical expense

Position: no

Reasons:

28 May 1996 External T.I. 9603055 - BENEFITS GIVEN FOR TEMPORARY DUTIES OUT OF COUNTRY

Unedited CRA Tags
6(6)

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:

28 May 1996 External T.I. 9608095 - TERMINATION PENSION LUMP-SUM PMT

Unedited CRA Tags
8503(2)(h)(iii)

Principal Issues:

What is the maximum termination benefit payable under subparagraph 8503(2)(h)(iii)?

Position:

2 x (current service contributions plus earnings thereon)

Reasons:

27 May 1996 External T.I. 9532375 - Deferred Cash Purchase Ticket

Unedited CRA Tags
76(4)

Principal Issues:

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

Position: Yes

Reasons:

24 May 1996 External T.I. 9524235 - RRSP EXPENSES PAID TO THIRD PARTY BY ANNUITANT

Unedited CRA Tags
146(1) 204.2(1.2)

Principal Issues:

Is the payment of RRSP expenses by annuitant a gift

Position:

It can be but in most cases it will be a premium payment.

Reasons:

24 May 1996 External T.I. 9607745 - MORTGAGE, FOREIGN PROPERTY

Unedited CRA Tags
206(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.

		960774
XXXXXXXXXX	M.P. Sarazin

Attention: XXXXXXXXXX

May 24, 1996

Dear Sirs:

Re: Foreign Property and Mortgages

24 May 1996 External T.I. 9611235 - RRSP PREMIUMS EXPENSES GIFTS

Unedited CRA Tags
146 204.2(1.2)

Principal Issues:

treatment of administration fees paid in respect of an RRSP

Position:

see file 952423

Reasons:

24 May 1996 External T.I. 9611655 - CHARITABLE GIFTS

Unedited CRA Tags
118.1(2)

Principal Issues:

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

Position:

No.

Reasons:

23 May 1996 External T.I. 9611905 - EXTENDED CAB TRUCKS

Unedited CRA Tags
Class 10 Class 10.1

Principal Issues:

Whether Extended cab pick-up trucks that seat the driver and in excess of 2 passengers are class 10 or Class 10.1.

Position:

Determination of fact based on the use of the truck in the year acquired. A passenger vehicle as defined in subsection 248(1) of the Income Tax Act (the "Act") "means an automobile...". The definition of automobile as contained in subsection 248(1) of the Act would otherwise include a regular or extended cab truck unless it fell within one of the exceptions set out in paragraphs (b) through (e). Since the trucks seat the driver and more than two passengers, they cannot fit within the subparagraph 248(e)(i) exclusion.

Reasons:

22 May 1996 External T.I. 9614965 - DAMAGES WRONGFUL DISMISAL RETIRING ALLOWANCE

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

Principal Issues:

Are the components of an award retiring allowances.

Position:

Yes.

Reasons:

22 May 1996 External T.I. 9604585 - ASSETS USED IN ACTIVE BUSINESS

Unedited CRA Tags
4900(12)

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:

22 May 1996 External T.I. 9605205 - COOPERATIVE CORP QUALIFYING SHARE

Unedited CRA Tags
REG 4901(2) 135(4) REG 4900(12) REG 4900(13)

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:

21 May 1996 External T.I. 9526115 - IF DIVIDENDS PROHIBITED UNDER CORPORATE LAW?

Unedited CRA Tags
110.6(8) REG 6205

Principal Issues:
Whether the Department would apply subsection 110.6(8) in a situation where the payment of dividends was prohibited by corporate law tests of liquidity and solvency.

16 May 1996 External T.I. 9605325 - PARKED DEBT OBLIGATIONS

Unedited CRA Tags
80.01(6) 80.01(7) 80.01(8)

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:

16 May 1996 External T.I. 9610615 F - PLACEMENT ADMISSIBLE REER

Unedited CRA Tags
REG 4900(1)c)

Position Adoptée:

16 May 1996 External T.I. 9608565 - LEGAL FEES - SPOUSAL SUPPORT ENFORCEMENT

Unedited CRA Tags
18 56

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:

15 May 1996 External T.I. 9603975 - RRSP INVESTMENT IN CCPC

Unedited CRA Tags
REG 4900(6) REG 4900(12)

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

15 May 1996 External T.I. 9615025 - PERSON RELATED FOR RETIRING ALLOWANCE DEDUCTION

Unedited CRA Tags
60(j.1)(iv) 60(j.1)(v)

Principal Issues:

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

Position:

General review of law.

Reasons:

14 May 1996 External T.I. 9608955 - JOINT INVESTMENTS - INCOME ATTRIBUTION

Unedited CRA Tags
74.1 74.2

Principal Issues:

Application of attribution rules to income arising from various joint investments.

Position:

Question of Fact as to extent attribution rules will apply. General comments provided.

Reasons:

14 May 1996 External T.I. 9608855 F - PLACEMENT ADMISSIBLE

Unedited CRA Tags
4900(12) 4900(6)

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

Position Adoptée:
N/A

14 May 1996 External T.I. 9608885 F - CRÉANCE PRESCRITE

Unedited CRA Tags
7000(1)d)

Principales Questions:

Une créance dont les intérêts sont payés au moins annuellement à un taux égal au plus élevé du taux en vigueur à l'émission de la créance et du taux à la date du paiement de l'intérêt, est-il une créance prescrite?

Position Adoptée:

14 May 1996 External T.I. 9613805 - COST AMOUNT FOREIGN PROPERTY

Unedited CRA Tags
206(2)

Principal Issues: cost amount of debt instruments

Position: routine

Reasons: routine

13 May 1996 External T.I. 9616845 - UNUSED PART I.3 CREDITS

Unedited CRA Tags
125.3(1)

Principal Issues:

Clarification and correction of our opinion 960911 dated May 1, 1996 concerning the carry back of Unused Part I.3 Tax Credits flowed through from a subsidiary on a winding-up to a tax year of the parent that ended prior to the winding-up.

Position:

Yes.

Reasons:

10 May 1996 External T.I. 9616395 F - ALLOCATION DE FIN DE CARRIERE

Unedited CRA Tags
34.2

Position Adoptée:
Non.

10 May 1996 External T.I. 9611735 - DEFERRED LEASING COSTS

Unedited CRA Tags
18(3.1) 85(1.1) 12(1)(x) 14(1) 20(1)(e)

Principal Issues:

Are deferred leasing costs and leasehold inducement expenses deductible to the parent in the year, the related asset is sold to the subsidiary?

Position:

No, deductible over the years the expenses relate

Reasons:

8 May 1996 External T.I. 9613795 - DESIGNATED BENEFIT OUT OF RRIF

Unedited CRA Tags
146.3(6.2) 146.3(6.11)

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

8 May 1996 External T.I. 9607535 - EFFECT OF BANKRUPTCY ON SHARES IN RRSP

Unedited CRA Tags
54(c) 50(1)(b) 206(2) 207.1(1)

Principal Issues:

Whether bankruptcy results in shares being disposed of by RRSP trust shareholder and write-off of cost by RRSP trust.

Position:

No disposition.

Reasons:

2 May 1996 External T.I. 9614365 - INDIANS - EMPLOYMENT INCOME FOR RETROACTIVE PERIOD

Unedited CRA Tags
81(1)(a)

Principal Issues:

Whether, in the given fact situation, a portion of the employment income of an Indian for the retroactive period he was not working should be exempt from income tax.

Position: Yes.

Reasons:

Technical Interpretation - Internal

15 May 1996 Internal T.I. 9604526 - DEFINITION OF "VALUATION" OF SHARES OF DESIGNATED CO

Unedited CRA Tags
REG 2405(3)

Principal Issues:

Whether or not fair market value is the maximum value which can be used for purposes of the "valuation" of shares of a designated corporation held by a non-resident insurer in subsection 2405(3) of the Regulations.

Position:

This determination can only be made by OSFI

Reasons:

14 May 1996 Internal T.I. 9610147 - RCA FOREIGN TAX CREDIT

Unedited CRA Tags
149(1)(q.1) 126(1) 20(11) 20(12)

Principal Issues: RCA foreign tax credit

Position: Explained provisions

Reasons: Routine

14 May 1996 Internal T.I. 9612117 - MUTUAL FUND LIMITED PARTNERSHIP UNITS RRSP

Unedited CRA Tags
4900 100(1) 40(2)(g)

Principal Issues:

transfers of mutual fund limited partnership units to rrsp

Position:

routine explanation of law

Reasons: