Income Tax Severed Letters - 1997-09-19

Principal Issues:

Housing loan: whether draft subsection 15(2.4) exception is met.

1)Whether repayment of existing mortgage is to "enable or assist."

2)Whether non-shareholder senior employees refusal to partake in housing loan program taints individual's reception of loan as an employee.

3)Whether 15 year repayment term is within a reasonable time.

Position:

General discussion.

1) No, except in particular circumstances

2)Not necessarily; if same terms and conditions are offered

3) Unable to determine, perhaps.

Reasons:

Principal Issues:

What portion of the "discretionary portfolio management fees" relating to RRSPs or RRIFs would have to be paid by the annuitant and the RRSP or RRIF?

Position:

Management fees are to be paid by the Plan and investment counsel fees by the annuitant.

Reasons:

Principal Issues:

1)whether 51.1(b) applies to a debt obligation where the holder's right to exchange can be exercised only after the issuer gives notice that it may be exercised;
2)whether Part XIII withholding tax (subparagraph 212(1)(b)(vii)) is required on payments of interest under such a debt obligation where issuer may give such notice within 5 years of debt's issue.

Position:

1)yes;
2) yes.

Reasons:

Principales Questions:

Pour être admissible au crédit d'impôt pour production cinématographique ou magnétoscopique canadienne la production doit-elle constituer un bien amortissable pour la société admissible?

Position Adoptée:

Principal Issues:

Does paragraph 212(1)(l) apply to the income inclusion under subsection 146(8.8) before or after the deduction under subsection 146(8.9)?

Position:

Applies to the net amount after the deduction under 146(8.9).

Reasons:

Principales Questions:

Pour être admissible au crédit d'impôt pour production cinématographique ou magnétoscopique canadienne la production doit-elle constituer un bien amortissable pour la société admissible?

Position Adoptée:

Principal Issues:

Whether two corporations are "affiliated persons" in a situation where one of the corporations is the general partner of a limited partnership and has absolute control thereof, and the limited partnership owns all of the shares of the other corporation.

Position:

We did not express an opinion because the scenario was too specific.

Reasons:

Principal Issues:

Est-ce que 55(3)(a) proposé applicable à une série de transactions donnée?

Position:

Oui

Reasons:

Principal Issues:

Would overcontribution taxes apply where an amount is transferred to an RRSP in accordance with a locking-in agreement but amount is not transferable under the Act?

Position:

Yes, Act is clear

Reasons:

Principal Issues:

PBR sur actions résulte de cristallisation et le contribuable a bénéficié de la déduction pour gains en capital. Est-ce que perte en capital réalisée lors de disp des actions suite à une diminution de valeur est refusée?

Position:

Non

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	                              		972084	

Attention: XXXXXXXXXX

August 29, 1997

Dear Sirs:

Re: Subsection 111(5) of the Income Tax Act ("Act")

Principal Issues:

Whether payment received in settlement of damages for mental distress, nuisance, inconvenience, and personal injuries due to the blowout of an oil well located on a taxpayer's property are taxable.

Position:

Likely not taxable, but cannot determine conclusively.

Reasons:

Principal Issues:

(1) Est-ce que l'article 245 est applicable à une série de transactions de dépouillement de surplus?

Position:

Art 245 pourrait être appliqué.

Reasons:

Principal Issues:

expiry of the exempt capital gains balance on the disposition of the individual's entire interest in a particular flow-through entity & whether it can be resurrected by reacquiring the shares

Position:

while the exempt capital gains balance is deemed to be nil for all taxation years following the year of disposition, proposed 53(1)(r) permits an adjustment to the cost base of the remaining units of the entity immediately prior to the disposition so that the expected benefit from the 110.6(19) election is not lost. If the units are reacquired within 30 days of the disposition, any capital loss realized on that disposition is deemed to be nil and the loss is added to the ACB of the repurchased units

Reasons:

Principal Issues:

Est-ce que la rémunération versée par un artiste résident du Canada à un producteur Français constitue une redevance pour les fins de 212(1)d)(vi)?

Position:

Pas assez d'information pour se prononcer.

Reasons:

Position Adoptée:

Principal Issues:

Who should pay for investment counsel fees relating to RRSps?

Position:

Investment counselling fees relate to advice provided to the annuitant or advice provided directly to the RRSP as requested by the annuitant for investment strategies and we are of the view that generally such expenses are expenses of the annuitant.

Reasons:

Principales Questions:
demande agrément pour un centre hospitalier

Position Adoptée:non

Principal Issues:

Whether the Canada-U.S. Income Tax Convention would apply to restrict the U.S.'s right to impose a withholding of 39.5% on distributions made by a U.S. partnership to a Canadian resident partner.

Position:

No

Reasons:

Principales Questions:

1.Est-ce que la répartition de la dette utilisée sur la T2057 est applicable aux fins de 20(1)c)?

2.Est-ce que les intérêts sur une dette assumée continuent d'être déductibles si suite à un roulement selon 85(1) un bien est substitué à un autre bien générant aucun revenu.

Position Adoptée:

Principales Questions:

Position Adoptée:

Principales Questions:

146(8.3) applicable lors d'un transfert selon 146(16)a)?

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.

5-971100
XXXXXXXXXX J. Teixeira

Attention: XXXXXXXXXX

June 16, 1997

Dear Sirs: