Income Tax Severed Letters - 1996-10-04

Principal Issues:

Is a mortgage secured by a building on leased land a qualified investment for an RRSP

Position:

No if it is a chattel mortgage but yes if it is a fixture that becomes a part of the real property and a leasehold interest of the lessee

Reasons:

Principal Issues:

Whether a right to acquire a right to acquire a qualified investment is a qualified investment for an RRSP.

Position:

Maybe depending on whether it is a property at all & has any value in the circumstances.

Reasons:

Principal Issues:

Can a foreign annuity be held in an RRSP trust?

Position:

No

Reasons:

Principal Issues:

1. Trainees may belong to a professional association but are not permitted to practice professionally. Are the dues that they pay to the association deductible under subparagraph 8(1)(i)(i)?
2. A professional member may pay a penalty in addition to the annual dues in respect of the late payment of the dues. Does the penalty form part of the membership dues that are deductible under subparagraph 8(1)(i)(i)?
3. If an individual resigns from a professional association and subsequently decides to become a registered member again, is the initial fee that must be paid to association deductible under subparagraph 8(1)(i)(i)?

Position:

1. The dues are not deductible.
2. The penalty is not deductible.
3. The initiation fee is not deductible.

Reasons:

Principal Issues:

Are all transfers excess amounts requiring the use of a T2030?

Position:

No

Reasons:

Principal Issues: How can RRSP invest in small business.

Position: Routine reply

Reasons: Routine

Principal Issues:
Whether a loss which arose as a result of the deduction of taxable dividends under paragraph 130.1(1)(a) would qualify as a non-capital loss as defined in subsection 111(8).

Position:
Yes, if the reason for the loss in a particular year is because the mortgage investment corporation paid out less taxable dividends than it was able to in a prior year.

Reasons:
While subsection 130.1(1) is not expressly directed against a particular source, the deduction under paragraph 130.1(1)(a) is a deduction taken in computing income from a mortgage investment corporation's business.

Principales Questions:

Confirmation de la position à la question 49 de la table ronde de ACEF de 1992.

Position Adoptée:

Principal Issues:

Application of the attribution rules of 75(2) where a trust acquires shares of a corporation for fair market value from a trustee where the trustee's children are beneficiaries of the trust. There are two other trustees of the trust.

Position:

General comments provided only - 75(2) and other attribution rules may apply.

Reasons:

Principal Issues:

Whether or not a Kazakh Limited Liabilities Partnership is considered to be a corporation for puroses of the Income Tax Act

Position:

Would be considered to be a corporation

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.

									5-960746
XXXXXXXXXX							M. Séguin

Attention: XXXXXXXXXX

July 19, 1996

Dear Sirs,

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.

									5-952530
XXXXXXXXXX							M. Séguin

A l'attention de XXXXXXXXXX

Le 28 juin 1996

Monsieur,

Objet: Demande d'interprétation technique de l'article 95