Income Tax Severed Letters - 1996-08-23

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.

		960061
XXXXXXXXXX	B. Kerr

Attention: XXXXXXXXXX

August 13, 1996

Dear Sirs:

Re: Subsection 118.1(2) of the Income Tax Act (the "Act")

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.

Patrimoine Canadien
Les Terrasses de la Chaudière
15, rue Eddy 5-962290
4 ième étage Michel Lambert
Bureau 150
Hull (Québec)
K1A 0M5

A l'attention de Mme Lucie Marion

Le 8 août 1996

Mesdames, Messieurs,

Principales Questions:

1- définition de l'expression «matériel consommé» telle qu'utilisée à la sous-division 37(8)a)(ii)(B)(V) de la Loi de l'impôt sur le revenu (la «Loi») 2- un bien est utilisé pour faire de la recherche pour le compte du contribuable et également pour des tiers en contrepartie d'un paiement contractuel, le paiement contractuel peut-il réduire seulement la dépense jusqu'à concurrence de la portion utilisée pour le bénéfice du payeur.

Position Adoptée:

Principal Issues:

If a trust makes an election under proposed subsection 132(6.1), as reflected in the June 20, 1996 Notice of Ways and Means Motion, and is deemed to have been a mutual fund trust for a particular period, would it also constitute a mutual fund trust for the purposes of the definition of "financial institution" in subsection 142.2(1) during that period?

Position:

Yes.

Reasons:

Principal Issues:

Would a delay in obtaining the information from an MFT (ie: calculation of income not normally made until after the year-end) cause the Department to conclude that the trustees of a trust could never make an allocation of the trust's income to its beneficiaries for a year and deduct the amount so allocated under subsection 104(6) of the Act. This would be due to the fact that at the end of the trust's taxation year the specific amount of the trust's income for that year may not be known at that time and any "amount" so allocated may not meet the definition of "amount payable" in subsection 104(24) of the Act.

Position:

Depends on facts but generally, where the terms of a trust provides the beneficiary(s) with the legal right to enforce payment in that year of an amount made payable to them that would otherwise be income of the trust for that year, the fact that the specific amount of income of the trust may not be known at year-end because of a delay in obtaining the information required to determine the trust's income will not, by itself, cause us to conclude that a beneficiary of such a trust could never have an enforceable right to demand payment of that amount in that year.

Reasons: See above

Principal Issues:

Whether fees paid to XXXXXXXXXX in respect of XXXXXXXXXX with learning disabilities qualify for the medical expense tax credit. Follow-up explanation to E9609025.

Position:

No. Does not meet the criteria for the credit set out in paragraph 118.2(2)(e) of the Act.

Reasons:

Principal Issues:

1.Where a resident of Canada acquires a property in satisfaction of an interest in a non-resident estate, is the cost base of the property determined by the rules in paragraph 69(1)(c) or paragraph 107(2)(b)?
2.If the non-resident estate is not subject to tax in Canada, would paragraph 69(1)(c) apply to determine the cost base of property acquired by a Canadian resident in satisfaction of that person's interest in the non-resident estate?

Position:

1.Paragraph 107(2)(b).
2.No. Paragraph 107(2)(b) applies.

Reasons:

Principales Questions:

Est-ce que les montants payés aux participants du Programme Expérience Canada sont imposables?

Position Adoptée:

Principal Issues:

1.Whether paragraph 107(2)(b) applies to determine the cost base of property distributed to a beneficiary resident in Canada by a non-resident testamentary trust.
2.If paragraph 107(2)(b) applies and the non-resident trust was established prior to 1972, is the beneficiary entitled to step up the cost base of the property pursuant to ITAR 26(3).
3.If ITAR 26(3) is not applicable, is there any provision in the Canada-U.S. Tax Convention (1980) which would provide a step-up in the cost base to the Canadian beneficiary.

Position:

1.Yes.
2.No.
3.No.

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.

5-961346
XXXXXXXXXX Michel Lambert

A l'attention de XXXXXXXXXX

Le 22 juillet 1996

Mesdames, Messieurs,

Objet: Actions du capital-actions d'une société agricole familiale

Principales Questions:

un paiement fait indirectement à un société exempte d'impôt en vertu de l'alinéa 149(1)(j) de la Loi pour financer l'acquisition d'un immeuble est-il admissible pour les fins de 37(1)(a)(ii)(C)? (Les payeurs ne sont pas liés à la société et n'ont aucun droit relativement à l'immeuble)

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.

5-961875
XXXXXXXXXX Michel Lambert

A l'attention de XXXXXXXXXX

Le 8 juillet 1996

Mesdames, Messieurs,

Objet: Application du paragraphe 104(19) de la Loi de l'impôt sur le revenu

Principal Issues:

Whether board members of health districts incorporated under the Health Districts Act qualify under paragraph 81(3)(b) of the Income Tax Act (the Act) as an "other similar body".

Position:

After a review of the Health Districts Act and other relevant provincial legislation a board member is not considered to be "an officer of a municipal utilities board, commission or corporation or any other similar body" for the purposes of paragraph 81(3)(b) of the Act.

Reasons: