Income Tax Severed Letters - 1996-07-26

Principal Issues:

Whether a specified member's partnership interest continues to be an excluded interest after the general partnership transfers it commercial property to a limited partnership and becomes the limited partner of the new partnership.

Position:

No.

Reasons:

Principal Issues:

1.Where an insurance agency transfers its business to two holding corporations on a pro rata basis under section 55 and subsequently winds up, can the insurance agency claim a reserve under subsection 32(3) on its final tax return.

2.Can the two holding corporations continue to claim the subsection 32(3) reserve in years subsequent to the transfer.

Position:

1.No.

2.No.

Reasons:

Principal Issues:

Can mortgage on real property and other collateral be held in RRSP

Position:

No.

Reasons:

Principal Issues:

clarify rules on rrsp held mortgage bonds administered through a trust

Position:

routine explanation of normal structure

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.

		3-962200
XXXXXXXXXX		A. St-Amour

A l'attention de XXXXXXXXXX

Le 4 juillet 1996

Monsieur,

Objet: Demande de décision anticipée
XXXXXXXXXX

Principal Issues:

taxation of employee benefits from 1:phsp coverage for employees' survivors, 2:counselling, 3:preferred rate mortgages & 4:waiver of bank fees

Position:

1: not taxable 2: usually exempt 3: taxable benefit calculated under 80.4 4: taxable

Reasons:

Principal Issues:

Can a 212(1)(b) exemption available where interest payments to non-resident equal that of interest from funds received on deposit

Position:

Depending on the circumstances, including the business purpose

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.

Ministère du Patrimoine canadien
Bureau de certification des produits
 audiovisuels canadiens							5-961500
4ième étage		J. Desparois
15, rue Eddy
Bureau 150
Hull (Québec)
K1A 0M5

A l'attention de Lucie Marion

Le 27 juin 1996

Mesdames,
Messieurs,

Principal Issues:

Whether person on leave of absence may receive income through an incorporated business which charges fees to the employer.

Position:

General explanation of 6801(a)(iii).

Reasons: N/A

Principal Issues:

Tax consequences where shares are transferred to a spouse or children on death.

Position:

May be transferred on tax-free basis provided certain conditions are met.

Reasons:

Principal Issues:

retiring allowance followed by part time employment

Position:

routine reply provided

Reasons:

Principal Issues:

Is the widow's (widower's) discretionary share of the accumulating income of a trust for a year determined under paragraph 2800(3)(f) of the Regulations. In 5-9737 dated May 8, 1990, we indicated that paragraph 2800(3)(f) rather than 2800(3)(e) would apply in determining the widow or widower's share of the accumulating income. This position appears to have been taken because in the particular situation we were asked to consider, the widow had remarried and was referred to as the "former spouse" of the settlor.

Position:

Confirmed our position in 5-9737 as it related to the situation on which that reply was based. However, it was also indicated that in a situation where a widow or surviving spouse had not remarried, paragraph 2800(3)(e) may apply in determining the widow's share of the accumulating income.

Reasons:

Principal Issues:

Whether, where all of the assets of a family farm corporation have been sold and converted to cash, the shares of the corporation continue to qualify as "shares of the capital stock of a family farm corporation" within the meaning of subsection 70(10) of the Act.

Position:

Shares no longer qualify as such.

Reasons:

Principal Issues:

Interest deductibility with respect to debt associated with a stock option plan?

Position:

maybe, depending on facts

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.

962010
XXXXXXXXXX M.P. Sarazin

Attention: XXXXXXXXXX

June 19, 1996

Dear Sirs:

Re: Deferred Salary Leave Plan (the "Plan")

Principal Issues:

Whether, where sports tickets that have been purchased for client promotion are subsequently gifted to a charity, the corporate donor can deduct the full cost of the tickets, as opposed to only 50% of the cost.

Position:

Amount of deduction would be equal to 50% of the cost of the tickets.

Reasons:

Principal Issues:

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.

	           	      				961806
XXXXXXXXXX				                   Cal Brown
(613) 957-8980

Attention: XXXXXXXXXX

June 6, 1996

Dear Sirs:

Re: Canadian Film or Video Production Tax Credit

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.

5-961237
XXXXXXXXXX Michel Lambert
(613) 957-8953

Le 27 mai 1996

Madame,

Objet: Application de l'alinéa 75(2)b) de la Loi

Principal Issues:

variations of trusts - do they cause resettlement

Position:

depends on facts of variation

Reasons: