Income Tax Severed Letters - 1996-06-14

Principal Issues:

In the definition of investment business in subsection 95(1)(a)(i) in respect of foreign affiliates, must a foreign financial institution be regulated by the country in which its business is principally carried on, or can it be regulated by another country.

Position:

Should be regulated by the country in which its business is principally carried on.

Reasons:

Principales Questions:

Whether the cost of a notebook computer can be applied against the research grant or if it could be treated as a depreciable asset

Position Adoptée:

Principal Issues:

Does a Care and Maintenance Fund established pursuant to the Cemeteries Act (Revised) (Ontario) qualify as a trust governed by an eligible funeral arrangement (as defined in subsection 148.1(1) of the Act)?

Position:

Yes, if the contribution limit of $15,000 per individual for funeral services is not exceeded.

Reasons:

Principal Issues:

whether an inactive retired partner to an accounting firm may file up to June 15 and whether a limited partner in a partnership which is carrying on an active business is also entitled to file later than April 30 under proposed amendments to para 150(1)(d). The limited partner is a passive investor in the business.

Position:

retired accouting partner can file for June 15, limited partner in a partnership which is carrying on an active business cannot

Reasons:

Principal Issues:

Whether T5 slips are required to be issued to purchasers of prearranged funeral plans where the funeral home is entitled to receive the interest income that accrues on the money held on deposit.

Position:

T5 slips should not be issued to the purchasers of such plans, but should be issued to the funeral home.

Reasons:

Principal Issues:

def'n of medical services in respect of fees paid to a nurse

Position:

question of fact, look to the relevant provincial acts for clarification on any service in the "grey" area

Reasons:

Principal Issues:

Principal Issues:

1) How does the completion of the administration of the estate within the executor's year affect the period during which the estate reports its income?

2) How does the time at which the executor distributes or transfers legal title of the estate property to the beneficiaries affect the period during which income is reported by the estate?

3) What is the impact of the decision in Grayson on our position?

Position:

1) Where the administration of an estate is completed in less than 12 months, most executors will file a T3 return for the estate with a taxation year that ends on a chosen wind up date that is for a period less than twelve months. A designation under subsections 104(13.1) and (13.2) of the Act will permit the income and taxable capital gains for that period to be included in the estate's income rather than the beneficiaries' income.

2) It is a question of law whether beneficial ownership of the property of an estate is considered to have passed to the beneficiaries of the estate. At the point in time where the administration of an estate has been completed and there is no estate property held by the executor in that capacity, the taxation year of the estate would generally be considered to have ended.

3) The result of that decision is not inconsistent with our position.

Reasons:

Principal Issues:

Meaning of "directly or indirectly" in new paragraph 95(2)(a).

Position:

Question of fact. Would have to be able to directly trace payments.

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.

961744
XXXXXXXXXX Jim Wilson
(613) 957-2123
Attention: XXXXXXXXXX

May 17, 1996

Dear Sirs:

Re: Mutual Fund Trust - Non-Resident Unitholder

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.

		5-961637
XXXXXXXXXX	J.A. MacFarlane

May 16, 1996

Dear XXXXXXXXXX:

This is in reply to your letter of April 15, 1996 wherein you requested an explanation of Interpretation Bulletin IT-407R3, Special Release.

Principal Issues: general comments re OETC in 122.3 of the Act.

Position: n/a

Reasons: n/a

Principales Questions:

1) Faut-il un acte notarié pour créer une fiducie et faut-il que celle-ci soit enregistrée, incorporée ou immatriculée? 2) Quelle genre de fiducie sommes-nous en présence?

Position Adoptée:

Principal Issues:

Whether an individual can set up a trust that would qualify as a RESP for their child or grandchild or would subsection 74.1(2) apply?

Position:

Subsection 74.1(2) will apply.

Reasons:

Principales Questions:

1) Est-ce que le paragraphe 256(1.2) de la Loi s'applique lors de l'attribution des revenus d'une fiducie à ses bénéficiaires? 2) Est-ce qu'un enfant mineur qui n'aura droit aux revenus et au capital d'une fiducie discrétionnaire que lorsqu'il aura 18 ans est un bénéficiaire? 3) Si la fiducie n'est plus discrétionnaire et que tous les bénéficiaires ont une part fixe aux revenus et au capital, qui sera propriétaire des actions détenues par la fiducie?

Position Adoptée:

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 952784

Attention: XXXXXXXXXX

March 19, 1996

Dear Sirs:

Re: Application for "Approved Association" Status

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.

Department of Canadian Heritage
Canadian Audio-Visual Certification Office
Journal Tower South 960536
15th Floor, 365 Laurier Avenue West Cal Brown
Ottawa, Ontario (613) 957-8980
K1A 0C8

Attention: Karyn R. Wichers

March 14, 1996

Dear Ms Wichers: