Income Tax Severed Letters - 1997-01-10

Administrative Letter

2 October 1996 Administrative Letter 962292A - multiple returns for deceased beneficiary of trusts

Unedited CRA Tags
104(23)(D)

Principal Issues:

Can multiple returns be filed under 104(23)(d) for one deceased
taxpayer?

Position:

No.

Reasons:

Ruling

30 November 1995 Ruling 9620353 - DIVISIVE REORGANIZATION

Unedited CRA Tags
55(3)(b) 55(3.2)(h)

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 3-962035
XXXXXXXXXX

Attention: XXXXXXXXXX

XXXXXXXXXX, 1996

Dear Sirs:

Re: XXXXXXXXXX
Advance Income Tax Ruling

30 November 1995 Ruling 9628723 - RETIRING ALLOWANCE PAID TO SPOUSE

Unedited CRA Tags
56(1)(a)(ii) 67 60(j.1)

Principal Issues:

Can a farmer pay his spouse a retiring.

Position:

Yes. A retiring allowance can be paid with respect to each year
during which the spouse was employed.

Reasons:

Technical Interpretation - External

20 January 1997 External T.I. 9632695 - INTEREST RATE SWAPS AND FAPI

Unedited CRA Tags
95(2.1) 95(2.5)

Principal Issues:

Whether interest rate swaps would come within the
purview of the term "similar agreements" as that
term is used in the FAPI provisions of subsection
95(2.1) and paragraph (a) of the definition of
"indebtedness" in subsection 95(2.5).

Position:

Yes

Reasons:

13 January 1997 External T.I. 9639385 F - RÉGIME DE CONGÉ A TRAITEMENT DIFFÉRÉ

Unedited CRA Tags
6801a)(i)

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.

7-963938
XXXXXXXXXX A. St-Amour

A l'attention de XXXXXXXXXX

Le 13 janvier 1997

Monsieur,

Objet: Régime de congé à traitement différé

13 January 1997 External T.I. 9626605 - DISTR FROM NON-RES TRUST FOR HONG KONG LAND RIGHTS

Unedited CRA Tags
104(13)(c)

Principal Issues:

cash received by Canadian from Hong Kong under land
inheritance right system: Is the amount non-taxable as
either a windfall or as a capital distribution from a trust?
Also what are the information reporting requirements under
the foreign property information reporting rules

Position:

not a windfall if the land is held in trust. Question of
fact as to whether the distribution is a payment of capital.
The interest in the non-resident trust does not appear to be
a specified foreign property since the interest is acquired
by birthright

Reasons:

7 January 1997 External T.I. 9635955 F - CDC ET PERTE REPUTEE NULLE

Unedited CRA Tags
40(3.4)(a) 89(1)

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.

5-963595
XXXXXXXXXX Michel Lambert
(613) 957-8953

A l'attention de XXXXXXXXXX

Le 7 janvier 1997

23 December 1996 External T.I. 9626925 F - PARAGRAPHE 125.4(1) - MONTANT D'AIDE

Unedited CRA Tags
125.4(1)

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 (CAVCO) 5-962692
Les Terrasses de la Chaudière
15, rue Eddy, 4e étage, bureau 150
Hull (Québec)
K1A 0M5

20 December 1996 External T.I. 9528615 - VALIDITY OF SHARE ISSUE WRITER NOT AUTHORIZED

Unedited CRA Tags
15(1)

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.

5-952861
XXXXXXXXXX D.A. Palamar

Attention: XXXXXXXXXX

January 3, 1997

Dear Sir:

Re: Technical Interpretation Request - Validity of Share
Issue

20 December 1996 External T.I. 9633495 - ALTA GRANTS FOR PERSONS WITH DISABILITIES

Unedited CRA Tags
56(1)(n) 56(1)(u)

Principal Issues:

Alberta government assistance to disabled students to assist with
disability specific costs

Position:

taxable as a bursary under 56(1)(n)

Reasons:

20 December 1996 External T.I. 9608915 - OVERSEAS EMPLOYMENT TAX CREDIT

Unedited CRA Tags
122.3

Principal Issues:

Whether employees seconded to the foreign affiliate in
respect of mining activities qualify for the OETC

Position:

No definite answer offered.

Reasons:

20 December 1996 External T.I. 9620285 - FOREIGN TAX CREDIT - GREEN CARD HOLDERS

Unedited CRA Tags
126(1) ARTICLE XXIV U.S. TREATY

Principal Issues:

Foreign tax credit for U.S. green card holders

Position:

U.S. tax paid in excess of what is required under the
Canada-U.S. tax treaty is not creditable

Reasons:

19 December 1996 External T.I. 9634765 F - CRÉANCES PRESCRITES

Unedited CRA Tags
REG 7000(1)(c) REG 7000(2)(c)

Principales Questions:

Application reg. 7000 pour les créances à taux d'intérêt
croissant.

Position Adoptée:

16 December 1996 External T.I. 9630945 - U.S. AMT

Unedited CRA Tags
126(7)

Principal Issues:

Whether a U.S. citizen who is resident of Canada pursuant to
Article IV of the Convention can benefit from foreign tax
credit under section 126 with respect to U.S. AMT?

Position:

No.

Reasons:

16 December 1996 External T.I. 9626585 - REPLACEMENT PROPERTY

Unedited CRA Tags
44

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.

5-962658
XXXXXXXXXX Tim Bryant

Attention: XXXXXXXXXX

December 16, 1996

Replacement Property

13 December 1996 External T.I. 9532795 - VARIOUS ISSUES - PART XIII TAX&RETIREMENT ALLOWANCE

Unedited CRA Tags
212(1)(J.1) 60(j.1)

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.

5-953279
XXXXXXXXXX P. Diguer

Attention: XXXXXXXXXX

December 13, 1996

Dear Sirs:

Re: Paragraphs 212(j.1) and 60(j.1)
of the Income Tax Act (Canada)

12 December 1996 External T.I. 9629345 - DSG'N OF A REALIZED TCG TO BENEFICIARIES WHEN PAID

Unedited CRA Tags
104(6)(b) 248

Principal Issues:

1 -whether the "amount payable" under 104(6) is the fair
market value of the preferred shares distributed
2 -whether beneficiaries who are entitled to both income and
capital of a discretionary inter vivos trust can take
advantage of the capital gains deduction in respect of a
taxable capital gain realized by the trust in respect of
qualified small bus shares

Position:

1 -def'n of "amount" of pref shares is the fair market value
at the time of distribution
2- provided that the trustees have the power to encroach on
capital, the amount of taxable capital gain actually
realized by the trust can be allocated to the beneficiaries
under 104(21.2)

Reasons:

12 December 1996 External T.I. 9619325 F - regles transitoires - 98(5)d)

Unedited CRA Tags
98(5)d)

Principales Questions:

A quels biens s'appliquent les règles transitoires applicables à
l'alinéa 98(5)d) de la Loi?

Position Adoptée:

2 December 1996 External T.I. 9633385 - RELOCATION COMPENSATION

Unedited CRA Tags
18(1)(a)

Principal Issues:

Whether lump sum payment to employee to compensate for
decrease in value of residence upon relocation by company
deductible.

Position:

Question of fact.

Reasons:

29 November 1996 External T.I. 9632045 - VOTING TRUST, IS DISPOSITION RECOGNIZED ON TRANSFER

Unedited CRA Tags
54

Principal Issues:

whether a disposition is recognized for tax purposes on
transfer of shares to a voting trust

Position:

question of fact, need trust indenture to determine whether
beneficial ownership has transferred to trust

Reasons:

29 November 1996 External T.I. 9632325 F - 104(13.1) - GENERALITE

Unedited CRA Tags
104(13.1)

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.

5-963232
XXXXXXXXXX Michel Lambert
(613) 957-8953

A l'attention de XXXXXXXXXX

Le 29 novembre 1996

25 November 1996 External T.I. 9617595 F - SOLDE DES GAINS EXONÉRÉS - DÉCES DU CONTRIBUABLE

Unedited CRA Tags
110.6(19) 14(5) 70(5.1)

Principales Questions:

Est-ce qu'une succession devra s'imposer sur un gain en
capital imposable de 75 000 $ lors de la disposition de
l'achalandage dans la situation suivante : Un contribuable
fait un choix en vertu de l'alinéa 110.6(19)b) de la Loi
à l'égard d'un achalandage. En conséquence de ce choix,
le solde des gains exonérés du contribuable, tel que
défini au paragraphe 14(5) de la Loi, est de 75 000 $. Le
contribuable décède en 1995 et tous ses biens sont
transférés à ses deux enfants. La succession dispose de
l'achalandage en 1995 pour un produit de disposition de
100 000 $.

Position Adoptée:

14 November 1996 External T.I. 9627345 - LENDING POWERS IN A SPOUSAL TRUST

Unedited CRA Tags
70(6) 73(1)

Principal Issues:

spousal trust, whether a general provision permitting the
trustees to make loans will taint the trust or whether it is
only the ability to make loans at less than commercial rates

Position:

lending or investment of trust property to a non-spouse on
"commercial" terms does not taint the spousal trust but if
the terms of the trust permit the lending of trust property
to a person other than the spouse on terms more favourable
than that which would otherwise be available to that person
commercially, the trust would not be a spousal trust, even
if the trustees did not make such a loan.

Reasons:

Conference

11 October 1996 APFF Roundtable Q. 11, 9630510 F - TERRAINS EN INVENTAIRE

Unedited CRA Tags
10(1)

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.

TABLE RONDE SUR LA FISCALITÉ FÉDÉRALE
APFF - CONGRES 1996

Question 11

Terrains en inventaire

11 October 1996 APFF Roundtable Q. 17, 9630520 F - RELOCALISATION D'EMPLOYÉS

Unedited CRA Tags
6(1)a)

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.

TABLE RONDE SUR LA FISCALITÉ FÉDÉRALE
APFF - CONGRES 1996

Question 17

Relocalisation d'employés

Technical Interpretation - Internal

4 December 1996 Internal T.I. 963146A F - PBR D,INE PART. DAND SOCIETE-DEPART PENDANT ANNEE C/T

Unedited CRA Tags
53(1)E) 53(2)C) 96(1)

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.

5-963146
XXXXXXXXXX Michel Lambert
(613) 957-8953

A l'attention de XXXXXXXXXX

Le 4 décembre 1996

29 November 1996 Internal T.I. 9637437 - RELOCATION EXPENSES

Unedited CRA Tags
6(1)(a) 6(1)(b)

Principal Issues:

An individual, with respect to a job-related move, relocated from one city to another city where housing costs were higher. The employer paid the individual a lump sum amount in respect of the housing cost differential computed by reference to the interest rate of Prime plus 1%. The payment related to a time period of 5 years (there was a 20% reduction for each of the last 4 years). As long as the individual continued to work for the employer for a period of 2 years, he was entitled to retain the entire lump sum payment. The issue is whether the payment is non-taxable or whether it is taxable under paragraph 6(1)(a) or 6(1)(b) of the Act.

Position:

The payment is taxable either as a benefit under paragraph 6(1)(a) or as an allowance under paragraph 6(1)(b).

Reasons:

15 November 1996 Internal T.I. 960807A - INCORPORATION

Unedited CRA Tags
149(1)(l)

Principal Issues:

RULING REQUESTED THAT ORGANIZATION WILL CONTINUE TO BE
EXEMPT AFTER INCORPORATION.

Position:

UNABLE TO CONFIRM. OPINION GIVEN THAT INCORPORATION OF
AN ORGANIZATION WOULD NOT, IN AND BY ITSELF, ADVERSELY
AFFECT SUCH ORGANIZATION'S TAX STATUS UNDER PARAGRAPH
149(1)(l).

Reasons:

11 September 1996 Internal T.I. 9613107 - TERM PREFERRED SHARES

Unedited CRA Tags
112(2.1) 248(1)(a)(iii)

Principal Issues:

Does a formula conversion of a convertible preferred share under which the share is converted in common shares having a value equal to the shareholder's original investment constitute a form of guarantee or security for the purposes of subparagraph (a)(iii) of the term preferred share definition?

Position:

It is a form of guarantee or security within the ordinary meaning of these words

Reasons:

19 July 1996 Internal T.I. 9624547 - EXTENDED CAB TRUCKS

Unedited CRA Tags
248(1)

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.

Ministerial Letter

26 November 1996 Ministerial Letter 9634488 F - FIDUCIE FAMILIALES

Unedited CRA Tags
104(1)

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.

MINISTER/DM'S OFFICE YS# 96-07069M
ADM'S OFFICE

RETURN TO RULINGS, 15TH FLOOR, 25 NICHOLAS ST.

PENDING

November 26, 1996

XXXXXXXXXX

Monsieur,