Income Tax Severed Letters - 1996-09-06

Principal Issues:

Whether subsection 148(8) would apply to allow a rollover where a policyholder's interest in a life insurance policy on the life of a child of the policyholder is transferred to the child on the death of the policyholder by virtue of a successive owner designation made under subsection 199(1) of the Insurance Act (Ontario).

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.

									5-962453
XXXXXXXXXX							Michel Lambert

A l'attention de XXXXXXXXXX

Le 28 août 1996

Mesdames, Messieurs,

Objet: Déductibilité des frais de stationnement des associés par une société de personnes

Principal Issues:

Taxability/deductibility of amounts received/paid pursuant to an interim separation agreement in two scenarios provided by writer.

Position:

The taxability/deductibility of payments vary depending on the actual terms of the court order. The courts have considered the situation where the governing document (decree, order or judgement of a competent tribunal or a written agreement) provides that the payer must pay the tax payable on the allowance in addition to the allowance itself, and determined that the tax payable will be considered part of the allowance and will be deductible as well.

Third party payments may qualify provided that the provisions of described in subsections 60.1(2) and 56.1(2) of the Act are met.

There is the possibility of a deduction as a medical expense, of the tuition costs. This will be a question of fact, individual determination required. Insufficient info provided to make any more than general comments.

Reasons:

Principal Issues:

who reports the business or professional income of a bankrupt for the period which straddles the date of assignment into bankruptcy

Position:

depends on whether it is the trustee or the individual who carries on the business -if the case of a professional service where it is likely the bankrupt who carries on the business, the income is reported in the return filed by the bankrupt for the period commencing with the bankruptcy (the post-bankruptcy return). If it is the trustee, it is the return which is colloquially called the in-bankruptcy return.

Reasons:

Principal Issues:

attribution on a return of property to the spouse who originally acquired the property

Position:

no reverse attribution as the return of property is not a transfer of property

Reasons:

Principal Issues: Transfer of retiring allowance

Position: Routine reply

Reasons: Routine information provided

Principal Issues:

Will a cash bonus be tainted if its linked to a stock option but the employee is free to use it as he or she wishes

Position:

Based on 1990 statement but extended to clarify employee must not be under obligation to exercise the option either

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.

XXXXXXXXXX							7-962060
A. St-Amour

A l'attention de XXXXXXXXXX

Le 5 juillet 1996

Monsieur,

Objet: Ristourne

Principal Issues:

Whether "alphabet shares" are taxable preferred shares.

Position:

They could be.

Reasons: