Income Tax Severed Letters - 1998-09-18

Ruling

10 July 1998 Ruling 9817343 - BREACH OF EMPLOYMENT CONTRACT, DAMAGES

Unedited CRA Tags
60(j.1)

Principal Issues: Can a payment for breach of employment contract be categorized as non-taxable damages?

Position: No.

Reasons: Clearly a payment in respect of loss of office so covered in paragraph 9 of IT-337R3.

22 June 1998 Ruling 9802313 - HUMAN RIGHTS AWARD

Unedited CRA Tags
248(1) 60(j.1)

Principal Issues:
What portion of a settlement in a wrongful dismissal action should be treated as being a tax free award as a result of certain human rights violations?

Position:
Question of fact. We provided our analysis of relevant cases. We expressed the opinion that in such circumstances a portion should be considered tax free and that from a review of several Human rights decisions a maximum amount would be $3,500.

Reasons:
The employer and employee reached a binding settlement. It is a question of fact what portion is tax free.

30 November 1997 Ruling 9727793 - 21-YEAR DEEMED DISPOSITION RULE

Unedited CRA Tags
104(4)

Principal Issues:

1) Will the widow be considered to have received proceeds of disposition where she releases or surrenders of an income interest in a testamentary trust and there is no direction concerning who is entitled to receive the benefit?

2) Does a variation of a testamentary trust to permit the trustees to distribute the trust property prior the application of the 21-year rule constitute a disposition by the trust or of any beneficial interest in the trust?

3) Can 107(2) be utilized on the distribution of the trust property to the Grandchildren?

Position: 1) No. 2) No. 3) Yes.

Reasons: Consistent with the Department's position in IT-385R2 and has been the subject of various rulings and opinions. Also, the variation is not of such significant nature that the Department would consider any disposition. Distribution pursuant to 107(2) consistent with Finance’s technical notes in the context of the 21-year rule.

30 November 1997 Ruling 9803043 - VESTED INDEFEASIBLY, AGREEMENT

Unedited CRA Tags
70(6)

Principal Issues: Would the amendment of a shareholders’ agreement to allow a surviving spouse to retain ownership of shares for the same period that the deceased spouse could have held them be considered to have vested indefeasibly for the purposes of subsection 70(6)?

Position: Yes, in this particular case.

Reasons: The surviving spouse would have the same rights as the deceased spouse and the amendment is not there to restrict the surviving spouse’s rights after death.

30 November 1997 Ruling 9804343 - XXXXXXXXXX

Unedited CRA Tags
149(1)(l)

Principal Issues:
1. Does XXXXXXXXXX qualify as a non-profit corporation as per 149(1)(l) ?
2. Is the use of a non-profit corporation (XXXXXXXXXX) to do the borrowing for the XXXXXXXXXX an avoidance transaction ? Should the borrowing be considered to be, in substance, a liability of XXXXXXXXXX ?

Position:
1. Yes
2. No and no.

Reasons:
1. Reviewed by Charities Division which decided that it is not a charity. Ruling provided that as long as XXXXXXXXXX does as its charter states, then it will qualify as a non-profit corporation - with the proviso that this determination is an annual test.
2. Referred to GAAR Committee - decision that there are legitimate business reasons for the interposition of XXXXXXXXXX as the borrower for the project. Consequently, it is not an avoidance transaction and the borrowing will not be considered to be a liability of XXXXXXXXXX.

30 November 1997 Ruling 9813393 - XXXXXXXXXX - EVENT OF DEFAULT

Unedited CRA Tags
212(1)(b)(vii)

Principal Issues: 212(1)(b)(vii) event of default triggering event

Position: OK

Reasons: Funds to be pl;aced in an escrow account until the assets for which the funds were borrowed are acquired. If acquisition fails, borrower must make offer to repurchase notes. Failure to make offer is the triggering event. Also, escrow account is not considered to be a "cash collateral" account.

30 November 1996 Ruling 9719963 - WITHHOLDING

Unedited CRA Tags
212

Principal Issues:

whether withholding on committment fee

Position:no

Reasons:

Technical Interpretation - External

9 September 1998 External T.I. 9806885 - MICS

Unedited CRA Tags
130.1(4)

Principal Issues:
Can section 84 of the Act apply to a mortgage investment corporation and if so, can a capital gains dividend election be made?

Position:
Yes section 84 can apply. The ability to make a capital gains dividend election on a deemed dividend will depend on the facts.

Reasons: The law.

2 September 1998 External T.I. 9732055 F - REER LEGS

Unedited CRA Tags
146(8.1) 146(8.8)

Principales Questions:
Est-ce que le montant versé en vertu d’un legs particulier avec charge est un remboursement de primes?

Position Adoptée: Oui.

31 August 1998 External T.I. 9817725 F - ALLOCATION DE RETRAITE

Unedited CRA Tags
60(j.1)

Principales Questions:
1. Est-ce que des ministères du gouvernement peuvent être considérés comme étant liés pour les fins de 60j.1)?

2. Est-ce que des institutions d'enseignement comme des écoles secondaires, CÉGEP ou uni versités peuvent être considérées comme étant liées pour les fins de 60j.1)?

Position Adoptée:
1. Oui.

31 August 1998 External T.I. 9822025 F - POLICE ASSURANCE VIE

Unedited CRA Tags
12.2

Principales Questions:
S/O

Position Adoptée:
S/O

27 August 1998 External T.I. 9817055 F - PARTIE I.3 FIDUCIE PROTECTION D'ACTIFS

Unedited CRA Tags
181.1(1)

Principales Questions:
Quel est l'impact de la partie I.3 lorsqu'une société utilise une fiducie de protection d'actifs?

Position Adoptée: Société n'a pas à considérer les dettes de la fiducie.

20 August 1998 External T.I. 9813655 - DESIGNATED BENEFICIARY, SPOUSE, CHILD

Unedited CRA Tags
60(l)

Principal Issues:
1. Can a child claim a designated benefit where the RRIF annuitant has a common law spouse that is not the parent of the child?

2. Are non-taxable social payments included in determining financial dependence?

Position:
1. No

2. Not if excluded from net income.

Reasons:
1. Cannot have a designated benefit if annuitant has a spouse at the time of death.

20 August 1998 External T.I. 9805595 - XXXXXXXXXX

Unedited CRA Tags
118.1(3)

Principal Issues: Whether an amount paid or transferred to a registered charity by a real estate agent can be considered as a donation for the purposes of the donation credit under subsection 118.1(3)?

Position: No not in this situation.

Reasons: The law.

19 August 1998 External T.I. 9816405 - DSLP, RETIRE, NOT RETURN

Unedited CRA Tags
6801(a)

Principal Issues: Whether decision to participate in early retirement program and not return to work could affect DSLP status?

Position: Yes.

Reasons: 6801(a) conditions no longer met so deferred amounts become taxable.

18 August 1998 External T.I. 9820345 F - BIENS ÉTRANGERS FOREIGN PROPERTY

Unedited CRA Tags
206(2)

Principales Questions:
Calcul coût indiqué d’un coupon détaché pour un REER

Position Adoptée:
Total du coût d’acquisition et revenus réputés accrus selon 12(9)

18 August 1998 External T.I. 9814985 F - CR - POLICE D'ASSURANCE-VIE

Unedited CRA Tags
207.6(2)

Principales Questions:
Quelles sont les conséquences fiscales, dans une situation particulière, d’une police d'assurance-vie utilisée dans le cadre d'une convention de retraite.

Position Adoptée:
Question de fait. Explication générale des dispositions du paragraphe 207.6(2).

18 August 1998 External T.I. 9816795 - DISABILITY PAYMENTS - EARNED INCOME

Unedited CRA Tags
6(1)(f) 146(1)

Principal Issues: Whether disability payments are included in earned income for purposes of RRSP.

Position: Yes.

Reasons: Payments are included in income by virtue of 6(1)(f).

18 August 1998 External T.I. 9815135 F - FIDUCIE DE FONDS MIS EN COMMUN

Unedited CRA Tags
5000(7)(d)

Principales Questions:
1. Que signifie l'expression "revenu tiré de la disposition de tels placements" à la définition de "fiducie de fonds en commun" au paragraphe 5000(7) du Règlement?

2. Doit-on tenir compte de l'attribution des gains en capital aux bénéficiaires de la fiducie selon le paragraphe 104(21) pour déterminer le revenu de la fiducie à l'alinéa (d) de la définition de "fiducie de fonds mis en commun au paragraphe 5000(7)?

Position Adoptée:
1. Le revenu net calculé selon la Partie I de la Loi et incluant les gains en capital imposables.

18 August 1998 External T.I. 9811345 - STOCK OPTION BENEFIT AND SECTION 517(1)

Principal Issues: What is the amount paid for purposes of section 7 where shares are surrendered under section 51 of the Act?

Position: FMV of shares surrendered.

Reasons: There is no exemption under section 7 or 52 for this sort of exchange.

18 August 1998 External T.I. 9807385 - TAXATION OF RETIREMENT INCOME TO AN EMIGRANT

Unedited CRA Tags
56

Principal Issues:
The taxation of certain Canadian source retirement income on emigration to the USA.

Position:
General explanations provided together with T4056 and T4058 and IT-193 SR.

Reasons:
General information was requested. Reply also explained new treaty provisions with respect to CPP receipts.

14 August 1998 External T.I. 9808815 - EUTELSAT PENSION SCHEME UK

Unedited CRA Tags
60(j)

Principal Issues: Whether an Eutelsat Pension Scheme payments are tax exempts.

Position: Question of fact.

Reasons: Subject to Article XVII of UK treaty and paragraph 56(1)(a).

13 August 1998 External T.I. 9813335 F - CONGÉ AVEC ÉTALEMENT DE REVENU

Unedited CRA Tags
5(1) 248(1)

Principales Questions:

Est-ce que l'étalement de la rémunération du personnel enseignant constitue une EET?

Position Adoptée:

12 August 1998 External T.I. 9815675 - RRIF

Unedited CRA Tags
146.3

Principal Issues:
Taxation of property held in a RRIF at time of death.
Imputed income from recreational property.

Position:
Provided general comments on provisions applicable.
There is no basis for imputing income from foreign residential property held directly by an individual.

Reasons:
General explanation of law was requested.
It appears the writer may be thinking of FAPI rules which might apply to residential properties held through an intermediary trust or corporation (condominium) or to foreign property held by a closely held corporation and made available for personal use. Nothing specific to the question was found in our files. However personal property held solely for recreational or residential use would not produce any imputed income other than potential capital gains.

12 August 1998 External T.I. 9814495 - MEANING OF RETIREMENT

Unedited CRA Tags
reg 6801(d)

Principal Issues:
What does the term “retirement from, or loss of, an office or employment” mean in the context of paragraph 6801(d) of the Regulations?

Position:
We have taken the position that it generally has the same meaning as used for the definition of retiring allowance.

Reasons:
The wording and intent of the provisions were previously considered and the position for retiring allowance purposes was generally adopted for this purpose.

12 August 1998 External T.I. 9814555 - TRANSFER OF INTEREST IN AN EPSP

Unedited CRA Tags
144 54

Principal Issues:
On the spin off of an operating division of an employer to an arm’s length party, the new employer will create an EPSP for the benefit of the transferred employees. Can a portion of the existing EPSP be transferred to this new EPSP without triggering any capital gains recognition’s.

Position:
The transfer of the property may not result in a “disposition” of the property as that term is defined for purposes of the Act in section 54 of the Act, if there is no change in the beneficial interest in the property. This is a question of fact. Any exempt capital gains balance in the existing trust in respect of the employees would likely be lost to the employees.

Reasons:
Application of the relevant portions of the Act.

12 August 1998 External T.I. 9810585 - TREATMENT OF SEVERANCE PAYMENTS

Unedited CRA Tags
248(1)

Principal Issues:
Are certain specific payments retiring allowances or tax free receipt?

Position:
Comments provided but, in general, payments of this nature are retiring allowance.

Reasons:
This is a specific proposed transaction and should be the subject of an advance income tax ruling.

11 August 1998 External T.I. 9815095 - DSLP EXTENDED LEAVE PERIOD

Unedited CRA Tags
reg 6801

Principal Issues:

Must an employee’s return to work follow immediately after a leave of absence in order for a plan to meet the requirements of 6801(a)?
Taxation of “retirement gratuity”

Position:

If the terms of the arrangement allow (or are modified to allow an employee to return at a date that is later than expected, we would accept that it effectively extends the leave of absence. Therefore the requirement would still be fulfilled provided the employee returns to work for a period that is at least as long as the extended leave.
A retirement gratuity will be taxable as employment income unless there is a retirement or loss of job in which case it will be taxable as a retiring allowance.

Reasons:

10 August 1998 External T.I. 9815685 - MORTGAGE WRITE OFF

Unedited CRA Tags
reg 4900

Principal Issues:

Information on writing off or disposing of non-performing investments held in an RRSP.

Position:

Outlined possible tax consequences and noted we do not provide opinions or rule on the valuation or propriety of such transactions

Reasons:

10 August 1998 External T.I. 9800545 - TAXATION OF IRAS

Unedited CRA Tags
56

Principal Issues:

Issues related to the taxation of Individual retirement accounts (IRAs) on death with the discussion is limited to IRAs that are foreign retirement arrangements.

Position:

We provided general comments that these IRAs will be treated as rights or things.

Reasons:

10 August 1998 External T.I. 9815215 - PUT AND CALL OPTIONS QUALIFIED INVESTMENTS

Unedited CRA Tags
146 4900

Principal Issues:
Are the following options qualified investment for purposes of RRSP or RRIF?
1. Equity Spread;
2. Put Options;
3. Call options acquired in the Market
4. Writing Covered Call Options;

Position:
1. Provisions of the Act do not apply directly to a trading strategy but apply to the underlying properties;
2. No: but cash received on writing a put option may be qualified;
3. Yes if the options are rights to acquire qualified investments;
4. The provisions of the Act do not apply but the cash received on writing a call option may be qualified.

Reasons:
1. A Spread is a strategy, not an investment;
2. A Put is not a right to acquire property. Cash qualifies;
3. Qualifies if listed and underlying property is qualified.
4. any Cash is a property so rules apply

10 August 1998 External T.I. 9812605 - DSLP FOR TERM EMPLOYEES

Unedited CRA Tags
reg 6801

Position:
Possibly.

31 July 1998 External T.I. 9816265 - RESIDENT OF SPAIN, U.K. PENSION

Unedited CRA Tags
115(1)

Principal Issues: Could a non-resident be taxed on pension income earned out of the U.K.?

Position: No

Reasons: No taxing provision in the Act

31 July 1998 External T.I. 9818715 - LONG TERM CARE

Unedited CRA Tags
118.2(2)(q) 248(1)

Principal Issues: Whether proposed Long Term Care Insurance Plan qualifies as a Private Health Services Plan for purposes of paragraph 118.2(2)(q) of the Act.

Position: Determination can only be made when all facts & information is available (including a copy of the Insurance Policy).

Reasons: Question of Fact.

24 June 1998 External T.I. 9812615 - INTEREST DEDUCT.-DEBT AS DIVIDEND PAYMENT

Unedited CRA Tags
20(1)(c)

Principal Issues:
Whether the interest payable on a promissory note issued by a corporation as payment of a dividend is deductible under paragraph 20(1)(c).

24 June 1998 External T.I. 9808135 - NON-ARM'S LENGTH SECURITIES TRANSACTIONS

Unedited CRA Tags
212(1) 260(1)

Principal Issues:
Enquiry seeking confirmation that, where, owing to a non-arm’s length relationship between the relevant parties, a transfer of securities from one person (the “securities lender”) to another person (the “securities borrower”) that would otherwise qualify for the special rules regarding securities lending arrangements set out in section 260 of the Act would not apply, any compensatory payments or lending fees paid by a Canadian resident to a non resident corporation would not be subject to any Part XIII withholding tax.

18 June 1998 External T.I. 9731135 F - REFUNDABLE TAX ON DIVIDENDS FROM FRANCE

Unedited CRA Tags
126(1)

Principal Issues: Mr. X, a resident of Canada, has received dividends from a company resident of France. Is he entitled to receive from the French Treasury a payment equivalent to the "avoir fiscal" by virtue of the Canada-France Tax Treaty ?

Position: Not until the second Protocol to the Canada-France Tax Treaty comes into force.

Reasons: Article X of the Canada-France Tax Treaty allows the reimbursement of the "Précompte", but does not allow a payment equivalent to the "avoir fiscal". Article 21 of the Second Protocol sets the dates to which the provisions of the Protocol will enter into force. These provisions are not retroactive.

12 May 1998 External T.I. 9808465 - CONTRACTUAL OBLIGATION - 212(1)(B)(VII)(E)?

Unedited CRA Tags
212(1)(b)(vii)(E)

Principal Issues:

11 May 1998 External T.I. 9806915 - INTEREST DEDUCTIBILITY

Unedited CRA Tags
20(1)(c) 20(3)

Principal Issues:
Enquiry seeking advice on the approach to take when transferring a debt (used for the purpose of acquiring investments), secured by a mortgage on a personal residence, where the personal residence is sold ?and the mortgage is settled? and a new home is subsequently purchased with new debt ?secured by a new mortgage?, in order to ensure that the interest paid on the new debt is deductible

28 April 1998 External T.I. 9806275 F - RÉGIME D'ACCESSION A LA PROPRIÉTÉ - POUR 1998

Unedited CRA Tags
146.01

Position Adoptée:
Oui, en autant que l’annulation est effectuée après le 1er octobre 1998.

26 March 1998 External T.I. 9732845 - RRSP SHARES OF COOPERATIVE CORPORATION

Unedited CRA Tags
4900(12)

Principal Issues: Shares of a cooperative as a qualified investment in a RRSP.

Position: May be possible.

Reasons: Must adhere to subsection 4900(12) of the Regulations.

13 February 1998 External T.I. 9732765 - RRSP WRITE OFF A MORTGAGE

Unedited CRA Tags
146(1)

Principal Issues:

How a mortgage is written off in an RRSP. Does Revenue Canada have to approve the write off?

Position:

Noted the income tax consequences under several fact scenarios. Revenue Canada does not give its approval.

Reasons:

Technical Interpretation - Internal

9 September 1998 Internal T.I. 9821147 - LCT AND PARTNERSHIPS

Unedited CRA Tags
181.1(3)

Principal Issues:
Are distributions from a partnership to a corporate partner that occur after the partnership's fiscal period but at or before the end of the corporation's taxation year included in the computation of capital pursuant to subsection 181.2(3) of the Act?

Position:
While each situation must be considered on a case by case basis if the distributions are in respect of current period earnings then such amounts would be included in the computation of capital pursuant to paragraph 181.2(3)(a) of the Act.

Reasons:
In this case the amounts received were reflected on the corporation’s balance sheet by debiting cash and crediting retained earnings. We understand that this reporting is in accordance with GAAP and supports our view that such amounts should be included in capital pursuant to paragraph 181.2(3)(a). It is recognized that the accounting classification of an item is not necessarily determinative of its legal classification or form.

27 August 1998 Internal T.I. 9801457 F - INTÉRÊTS

Unedited CRA Tags
20(1)(c)

Principales Questions:
Intérêts déductibles?

Position Adoptée: Non.

24 August 1998 Internal T.I. 9818156 - TAXABLE BENEFITS - POOLING OF FUNDS

Unedited CRA Tags
6(1)(a)

Principal Issues: Whether the employees in receipt of a reimbursement for the purchase of a computer should receive a taxable benefit?

Position: Yes.

Reasons: When the reimbursement by the employer relates to an asset owned by the employee or to personal expense of the employee, the employee benefits from the assistance and is required to include the amount of the reimbursement in income.

20 August 1998 Internal T.I. 9811747 F - CHANGE DE LA LOI

Unedited CRA Tags
6(1)f) RAIR 19

Principales Questions:

Est-ce que les prestations d’assurance-invalidité reçues par un contribuable doivent être incluses dans son revenu en vertu de l’alinéa 6(1)f) de la Loi ou si ces prestations sont non imposables en raison de l’application de l’article 19 des RAIR?

Position Adoptée:

18 August 1998 Internal T.I. 9811766 - GRANDFATHER, RRSPS FOR GRANDCHILDREN

Unedited CRA Tags
146(1)

Principal Issues: Could a grandfather establish an RRSP for minor grnadchildren?

Position: No

Reasons: Since the minor grandchildren did not enter into an arrangement with a trust, no retirement savings plan could exist.

16 July 1998 Internal T.I. 9800807 F - DÉFICIT DE CAFÉTÉRIA POUR UN EMPLOYEUR

Unedited CRA Tags
18(1)a) 67.1(2) 6(1)a)

Principales Questions:
Dans la mesure où un employeur fournit un service de cafétéria à ses employés et à d’autres personnes avec qui son entreprise fait affaires et que le prix qui est chargé par repas est moindre que le prix de revient pour cet employeur,
a) y a-t-il un avantage imposable pour l’employé et ce, même s’il n’y a pas de systême en place qui permette de déterminer cet avantage avec précision?
b) la dépense de repas pour l’employeur est-elle déductible comme dépense d’entreprise?
c) la dépense de repas pour l’employeur est-elle limitée par l’application de l’article 67.1 de la Loi?

Position Adoptée:
a) Oui, sauf que nous questionnons la validité du prix de revient dans ce cas.
b) Oui, la dépense de repas est déductible comme dépense d’entreprise.
c) Non.

22 June 1998 Internal T.I. 9807907 F - RELOCALISATION, PERTE SUR RÉSIDENCE

Unedited CRA Tags
6(1)a) 69(1)b)

Principales Questions:

Est-ce qu’un montant reçu par un nouvel employé de son employeur pour compenser la perte sur la vente de son ancienne résidence (différence entre la JVM et le prix de vente) constitue un avantage imposable pour l’employé en vertu de l’alinéa 6(1)a) de la Loi si l’employé a vendu sa résidence avec lien de dépendance pour un montant inférieur à la JVM?

Position Adoptée:

17 June 1998 Internal T.I. 9811566 - ART XXIX B OF U.S. TREATY - XXXXXXXXXX

Unedited CRA Tags
art XXIX B

Principal Issues: Whether IRS assessment on U.S. estate tax return of XXXXXXXXXX would impact on the credit granted by Revenue Canada for such tax

Position: No

Reasons: It is because the credit was based on the U.S. estate tax which would have been paid if the deceased taxpayer were not a U.S. citizen. Such U.S. estate tax is much lower than the U.S. estate assessed by IRS. So the assessment does not affect the credit Canada granted

11 June 1998 Internal T.I. 9801467 F - ACCES A INTERNET A LA RÉSIDENCE

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

Principales Questions:
Est-ce que le paiement ou le remboursement, par un employeur, des frais d’accès à Internet à partir de la résidence d’un employé est un avantage imposable pour l’employé ?

Position Adoptée:
Si le montant est sous forme d’allocation, le montant doit être inclus au revenu selon l’alinéa 6(1)b) de la Loi.

10 June 1998 Internal T.I. 9808707 - TRAVEL PROMO AND SALARY EX FOR INVEST CORP

Unedited CRA Tags
9

Principal Issues: whether salary, promotion and travel ex are deductible to a corp which has as its sole activity the investment of capital in shares and other financial instruments

Position: a reasonable amount for salaries is deductible
promotion not deductible by reason of 18(1)(b)
travel to investigate investment opportunities not deductible by reason of 18(1)(b)
trave to train officers of corp - deductible, subject to s 67

Reasons: interaction of 18(1)(a),(b) and section 67

5 June 1998 Internal T.I. 9808866 - JAPANESE PENSION INCOME

Unedited CRA Tags
56(1)(a) 6(1)(f) 56(1)(u) 110(1)(f)

Principal Issues:
Are the amounts under appeal taxable?

Position:
Insufficient information has been provided on which we could make a determination. Various taxation scenarios were outlined.

Reasons:
The details provided were very brief and did not provide the necessary information.

5 June 1998 Internal T.I. 9805726 - FUNDING ARRANGEMENTS-TENANTS & CHARITY

Unedited CRA Tags
3 9

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.

PRINCIPAL ISSUE:

Whether the receipt of a free rental accommodation in a seniors residential complex operated by a registered charity in exchange for an interest free loan to the registered charity is taxable in the hands of the tenant.

Position TAKEN:

3 June 1998 Internal T.I. 9803027 F - REVENUS D’INTÉRETS - INDIENS

Unedited CRA Tags
81(1)a)

Principales Questions:

Est-ce que les revenus d’intérèts provenant de la XXXXXXXXXX , gagnés par un Indien inscrit qui ne réside pas dans une réserve et dont les autres revenus ne sont pas exonérés, seraient exonérés d’impôt en vertu de l’alinéa 81(1)a) de la Loi?

Position Adoptée:

3 June 1998 Internal T.I. 9800997 F - FRAIS RAISONNABLE- DROIT D’USAGE AUTO

Unedited CRA Tags
6(1)k) 6(2) 6(1)e)

Principales Questions:

Est-ce qu’un avantage imposable doit être inclus dans le calcul du revenu d’un employé en vertu de l’alinéa 6(1)e) et 6(2) de la Loi lorsqu’une automobile de l’employeur est mise à la disposition de l’employé seulement pour une courte période durant la journée pour lui permettre de se rendre et de retourner du travail. L’employé n’utilise jamais l’automobile à d’autres occasions, autant pour des fins personnelles que pour des fins d’affaire?

Position Adoptée:

1 June 1998 Internal T.I. 9808836 - EARNED METHOD - REPORTING INCOME

Unedited CRA Tags
9(1) 12(1)(b)

Principal Issues:

1. Method of reporting income by a Utility Corporation. - Whether Earned or Billed Basis?

2. If earned basis whether amounts earned in prior year but included in current year’s income required to be rolled back to prior year'?

Position:

1. Earned basis.

2. No.

Reasons:

28 May 1998 Internal T.I. 9711417 - ALTERNATIVE METHOD ELECTIONS

Unedited CRA Tags
249.1(4) 249.1(6) reg 600(b.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.

21 May 1998 Internal T.I. 9808507 - QUALIFIED INVESTMENTS - DIAMONDS & SPIDERS

Unedited CRA Tags
146(1) 204 4900(1) 3201(o)(ix)

Principal Issues: Whether the following new two types of securities (Diamonds and Spiders which are traded on the New York Stock Exchange) are qualified investments for a trust governed by an RRSP?

Position: Question of fact and law.

Reasons: Securities must meet the Income Tax Act requirements.

8 May 1998 Internal T.I. 9808077 - LOSSES - MONEY LENDING BUSINESS?

Unedited CRA Tags
20(1)(p)(ii)

Principal Issues:
Enquiry seeking our views on the circumstances under which a taxpayer would be allowed to deduct, as a current expense, the principal amount of a mortgage which became a bad debt given the specific situation described in the letter

8 May 1998 Internal T.I. 9806837 - REIMBURSEMENT OF AMOUNTS TAXED UNDER IT-256R

Unedited CRA Tags
6(2)

Principal Issues:

1) whether paragraph 4 of IT-256R applies with respect to repayments of misappropriated funds made by a taxpayer who does not admit liability,
2) whether amounts are "repaid" when they are paid into court under a prejudgment garnishment,
3) how do we calculate the deduction for amounts repaid when part of the amounts taxable under IT-256R were not included into income.

Position:

1) IT-256R applies even if the employee does not admit his liability to his employer, if evidence supports the repayments relate to the misappropriated funds,
2) amounts are paid when the sums paid into court are released to the creditor,
3) repayments are applied on a first-in first out basis. Only the portion that was included into income will be deductible.

Reasons:

1 May 1998 Internal T.I. 9807867 F - MEANING OF "LABOUR ORGANIZATION"

Unedited CRA Tags
149(1)(k)

Principal Issues: Whether an organization which promotes sound labour relations, negotiates collective agreements and pursues other similar activities on behalf of its employer-members qualifies as a labour organization.

Position: No.

Reasons: The expression "labour organization" refers to organizations that carry on labour related activities for the benefit of workers.

27 April 1998 Internal T.I. 9808147 F - DÉDUCTIBILITÉ DE FRAIS DE MARGE DE CRÉDIT

Unedited CRA Tags
20(1)e.1) 20.1(2)c)

Principales Questions:
Est-ce que des frais de renouvellement d’une marge de crédit sont déductibles en vertu de 20(1)e.1) dans le cas d’une entreprise qui a cessé ses activités?

Position Adoptée: Non.

24 April 1998 Internal T.I. 9801607 - FILING - NON-RESIDENT CORPORATION

Unedited CRA Tags
150(1) 250(5)

Principal Issues:

Whether a corporation incorporated and operating in the U.S. but with central Mgt and Control in Canada must file a tax return.

Position:

Yes

Reasons:

3 April 1998 Internal T.I. 9731947 - DEFINITION OF A CANADIAN VESSEL

Unedited CRA Tags
13(21)

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.

		April 3, 1998
	Outaouais Tax Services Office	HEADQUARTERS
B. Kerr
	Attention: Daniel St. Amour	957-2139
		973194

Definition of Canadian Vessel

23 March 1998 Internal T.I. 9723987 F - PRÉSOMPTION DE GAIN EN CAPITAL

Unedited CRA Tags
55(3)(a)

Principal Issues:
A quel moment doit-on examiner le lien pour les fins du test à 55(3)(a)?

Position:
La position du Ministère est maintenant d'interpréter l'ancien 55(3)(a)
comme le nouveau 55(3)(a), c'est-à-dire qu'il faut examiner le lien immédiatement avant.

Reasons:

3 March 1998 Internal T.I. 9801897 - INDIANS - LOGGING BUSINESS INCOME

Unedited CRA Tags
81(1)(a)

Principal Issues: The tax treatment of a status Indian' s income from a logging
business.

Position: The income from the logging business is not exempt from taxation.

Reasons: Consistent with the position taken in other files and Williams and Southwind (similar fact situation). The connecting factors of major importance (where the work was performed and income earned) took place off reserve.

Ministerial Letter

17 August 1998 Ministerial Letter 9817558 - REVERSE MORTGAGES AND ANNUITY PAYMENTS

Unedited CRA Tags
12.2 20(1)(c)

Principal Issues: whether annuity obtained with proceeds of reverse mortgage subject to tax

Position: annuity subject to tax but simple interest accruing on reverse mortgage deductible from income therefore should be no net increase in taxable income

Reasons: 12.2 and 20(1)(c)

6 May 1998 Ministerial Letter 9725838 F - DEDUCT. DES FRAIS DE REPAS DANS CLUB DE GOLF

Unedited CRA Tags
18(1)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.

Le 6 mai 1998

XXXXXXXXXX

Monsieur,

6 May 1998 Ministerial Letter 9804488 F - DEDUCTIBILITE POUR EN AUTOMOBILE

Unedited CRA Tags
2

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.

Le 5 mai 1998

XXXXXXXXXX

Monsieur le Député:

Je vous remercie de votre lettre du 11 février 1998 dans laquelle vous soulevez la question de la déductibilité, pour les techniciens en automobile, du coût des outils qu’ils utilisent dans le cadre de leur travail.