Income Tax Severed Letters - 1998-10-30

Ruling

30 November 1997 Ruling 9806973 F - ACTIF D'ENTREPRISE

Unedited CRA Tags
248(1) 110.6(1) 110.6(2.1)

Principales Questions:

Est-ce qu’un immeuble servant partiellement à la location et à l’entreprise est un actif utilisé principalement dans une entreprise que la société exploite activement principalement au Canada?

Position Adoptée:

30 November 1997 Ruling 9806313 - MUNICIPAL CORPORATION - FOUNDATION

Unedited CRA Tags
149(1)(d)

Principal Issues: Whether the Foundation qualifes for exemption under paragraph 149(1)(d)

Position: yes

Reasons: The shares will only be owned by XXXXXXXXXX Municipalities.

30 November 1997 Ruling 9812873 F - DÉDUCTION POUR GAINS EN CAPITAL

Unedited CRA Tags
110.6(8)

Principales Questions:

Est-ce que le paragraphe 110.6(8) de la Loi s’appliquera lors de la disposition par le contribuable de ses actions ordinaires pour refuser la déduction pour gains en capital à l’égard d’actions admissibles de petite entreprise si la société n’a jamais versé de dividendes sur des actions non prescrites qu’elle a émises ?

Position Adoptée:

30 November 1997 Ruling 9807703 - FINANCE FUNDING COSTS OF A CAPITAL PROJECT

Unedited CRA Tags
212(1)(B)VII) 214(15)(A)

Principal Issues:

30 November 1997 Ruling 9818203 F - RÉGIMES D'OPTION D'ACHAT D'ACTIONS

Unedited CRA Tags
7(1)b) 7(3)b) 110(1)d)

Principales Questions:

1. Est-ce que la modification à une convention d'achat d'actions pour faire en sorte que les employés pourront choisir de recevoir un paiement en espèce ou des actions est une disposition des options et aura pour effet d'inclure un montant dans le revenu des employés selon l'article 5, 6 ou 7?
2. Est-ce que l’alinéa 7(1)b) s'applique dans le cas où un employé a le droit de choisir une somme en espèce plutôt que des actions en vertu d'une convention d'achat d'actions.
3. Est-ce l'alinéa 7(3)b) empêche un employeur de déduire les sommes versées?
4. Est-ce que l’employé a droit à une déduction prévue à l’alinéa 110(1)d)?

Position Adoptée:

30 November 1997 Ruling 9807853 - 6801 (D) PLAN - DEFERRED SHARE UNITS

Unedited CRA Tags
6801(d)

Principal Issues:
Confirmation that the plan is a prescribed plan under paragraph (d) of Regulation 6801.

Position: Yes.

Reasons: The plan meets all the conditions in paragraph (d) of Regulation 6801.

30 November 1997 Ruling 9816413 - RETIRING ALLOWANCE PAID TO SPOUSE

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

Principal Issues:

A) Will an amount paid by a farmer to the farmer’s spouse be considered a retiring allowance?
B) Will the recipient be entitled to a deduction under paragraph 60(j.1) of the Act for the payment of the amount into an RRSP?
C) Will the amount be deductible by the farmer?

Position:

A) Yes.
B) Yes.
C) Yes.

Reasons:

30 November 1997 Ruling 9816813 - PSP RIGHTS EXCHANGED STOCK OPTIONS

Unedited CRA Tags
5(1)

Principal Issues: Where an employee receives cash equal to the fair market value of a phantom stock plan and simultaneously accepts a new stock option right, will there be tax at that time?

Position: Only in respect of the amount received.

Reasons: Option benefit only taxed when received and PSP plan benefit taxed on receipt of cash.

30 November 1997 Ruling 9819383 - PHANTOM STOCK PLAN, DIRECTORS

Unedited CRA Tags
6801(d)

Principal Issues: Will a phantom stock plan for non-employee directors be excluded from SDA rules under 6801(d)?

Position: Yes.

Reasons: Standard plan that is being implemented by most public companies..

30 November 1997 Ruling 9805343 - SECURITIES LENDING BY MFC

Unedited CRA Tags
131(8)(b)(i) 39(4)

Principal Issues:
(1) Whether the securities lending arrangement and short sale will be considered to be “the investing of funds in property” by XXXXXXXXXX for the purposes of subparagraph 131(8)(b)(i) of the definition of a Mutual Fund Corporation.
(2) Will XXXXXXXXXX be able to elect capital gains treatment under subsection 39(4) with respect to the short sale of borrowed shares (XXXXXXXXXX).

Technical Interpretation - External

22 October 1998 External T.I. 9730905 F - AVANTAGE LORS DE CRISTALLISATION

Unedited CRA Tags
15(1)

Principal Issues: Est-ce qu'un actionnaire a un avantage en vertu de 15(1) lorsqu'il y a une réorganisation pour la cristallisation de sa déduction pour gains en capital et que les dépenses pour la réorganisation sont payées par la société?

Position: Oui

Reasons: Dépenses engagées pour le bénéfice de l'actionnaire. Toutefois, le montant de l'avantage va dépendre des faits.

22 October 1998 External T.I. 9810555 - FOREIGN AFFILIATES - RESIDENCE TESTS

Unedited CRA Tags
reg. 5907(11.2)

Principal Issues: Residency of foreign affiliates in designated treaty countries.

Position: Question of fact. Must satisfy both mind, management and control test as well as 5907(11.2).

Reasons: Law

20 October 1998 External T.I. 9818705 - CAPITAL GAINS DEDUCTION

Unedited CRA Tags
110.6(8)

Principal Issues: The taxpayer has been the sole shareholder of Holdco since Holdco was incorporated. Soon after its incorporation, Holdco acquired at fair market value from an arm’s length party, all of the issued shares of an ongoing corporation, Opco. The shares of Opco that were acquired by Holdco were comprised of both common shares and fixed value preferred shares bearing non-cumulative dividends of Opco. The Holdco common shares and the Opco common shares are prescribed shares but the Opco preferred shares are not prescribed shares. Holdco has owned no assets other than Opco shares. Opco has not paid any dividends on its preferred shares.
Does subsection 110.6(8) apply to deny the capital gains exemption in respect of a taxpayer’s capital gain on a disposition of shares of Holdco.

Position: Question of fact but likely subsection 110.6(8) will not apply.

Reasons: See files # 5M08340, 58311, 9225415, 941399, 9816165, 9700935, 931860, 9306161, 9309051, and 9309041.

20 October 1998 External T.I. 9825555 - ASSISTANCE PAYMENTS TO FISHERS

Unedited CRA Tags
56(1)(a)(vi)

Principal Issues: Taxation of early retirement payments under the FRA program.

Position: If recipient was self-employed then the payments are taxable as business income, if the recipient was employed the payments are taxable as other income by virtue of subparagraph 56(1)(a)(vi).

Reasons: Consistent with taxation of monthly TAGS payments on which the early retirement payments are based. Findings in Westar Mining Ltd. apply to early retirement payments.

19 October 1998 External T.I. 9803285 F - GAIN DE JEU - GÉNÉRAL

Unedited CRA Tags
9(1)

Principales Questions:

Différentes questions concernant le projet d’une personne d’incorporer une société dont les revenus seraient tirés de gains de jeu, de séminaires sur les jeux de hasard et de la vente d’ouvrages sur le jeu.

Position Adoptée:

16 October 1998 External T.I. 9732375 F - DÉDUCTIBILITÉ DES REPAS - 18(1)A) ET H)

Unedited CRA Tags
18(1)a) 18(1)h)

Principales Questions:
Est-ce que les frais de repas engagés par un travailleur autonome qui sont consommés quand il est seul le midi, qui ne sont pas encourus lors de rencontres avec des clients et qui ne sont pas consommés à l’extérieur de la municipalité où est situé son entreprise, sont déductibles dans le calcul de son revenu d’entreprise ? Notre position serait-elle différente si les repas étaient consommés par le travailleur autonome pendant qu’il se trouve à l’extérieur de sa municipalité ou de sa région métropolitaine pendant une période de plus de douze heures?

Position Adoptée:
Commentaires généraux. Les frais de repas doivent être engagés dans le cadre de l’exploitation de l’entreprise du contribuable pendant qu’il est à l’extérieur de chez lui et en vue de tirer un revenu de son entreprise.

16 October 1998 External T.I. 9824765 - RESTRICTED FARM LOSSES AGAINST CAPITAL GAINS.

Unedited CRA Tags
111(1)(c) 53(1)(i)

Principal Issues: Whether restricted farm losses can be applied against taxable capital gains from the disposition of farm property other than land.

Position: No.

Reasons: Paragraph 111(1)(c) restricts the application of restricted farm losses to "income from all farming businesses." Paragraph 53(1)(i) does allow property taxes and interest, which were included in the restricted farm losses, to be added to the ACB of farmland. However, this provision does not apply to other farm property.

15 October 1998 External T.I. 9711905 - CLASS 34 PROPERTY

Unedited CRA Tags
class 34 0f Schedule II

Principal Issues: Whether dollar amount specified on certificate issued by NRCan in respect of Class 34 property determinative of property qualifying for inclusion in Class 34.

Position: No.

Reasons: The final determination of whether property is included in the proper Class for CCA purposes is the responsibility of Revenue.

15 October 1998 External T.I. 9822155 - QUALIFIED FARM PROPERTY, REPLACEMENT PROPERTY

Unedited CRA Tags
110.6(2) 44(1)

Principal Issues:

1. Whether three farm properties qualify as "qualified farm property".
2. Whether the acquisition of a new farm property would qualify as "replacement property" of a former property.

Position:

1. Two of the properties may qualify as "qualified farm property. The third property will not.
2. The new land may be considered "replacement property", however no gain may be deferred as the replacement cost of the new property does not exceed the cost of the former property. The new house will not be considered "replacement property".

Reasons:

15 October 1998 External T.I. 9825065 - SPOUSAL SUPPORT AND LUMP SUM SETTLEMENT

Unedited CRA Tags
56.1(4) 60(b) 60.1(4)

Principal Issues:

15 October 1998 External T.I. 9818485 - PRINCIPAL RESIDENCE EXEMPTION

Unedited CRA Tags
54

Principal Issues: Principal residence - land in excess of 1/2 hectare

Position: law generally explained since all facts not available

Reasons: See files # 950960, 931679, 9703685, 9431495, 9502557, 9504376, 9725785.

13 October 1998 External T.I. 9808665 - SALE OF CONDOMINIUM UNITS.

Unedited CRA Tags
9 12

Principal Issues:
What is the Department's current position with respect to the timing of the recognition of income from the sale of condominium units?

Position:

Position expressed in Income Tax Technical News No. 8 dated September 30, 1996

Reasons:

13 October 1998 External T.I. 9821115 - EMPLOYER-PAID EDUCATIONAL COSTS

Unedited CRA Tags
6(1)(a)

Principal Issues: Would all educational costs paid under the company's educational policy be considered non-taxable based on the Department’s position as described in Technical News #13?

Position: No.

Reasons: The educational policy is very broad and could include courses which fall into the general interest category. The employer will have to determine the taxation of educational costs on a case by case basis.

8 October 1998 External T.I. 9825455 - MORTGAGE HELD IN A LOCKED-IN RRSP

Unedited CRA Tags
4900(1)(j)

Principal Issues: Whether an annuitant has to obtain an authorisation from Revenue Canada if the annuitant's RRSP wants to invest in a mortgage secured by a real property.

Position: No.

Reasons: Wording of 4900(4) and 4900(1)(j) of the Regulations.

8 October 1998 External T.I. 9733435 - CHILD SUPPORT

Unedited CRA Tags
56(1)(b) 60(b)

Principal Issues: A court order is prepared in circumstances where the Federal Child Support Guidelines must be used in respect of an individual and his or her spouse who have joint custody of their child. The use of the Guidelines results in the individual paying a support amount (defined in subsection 56.1(4) of the Act) to the spouse and the spouse paying a support amount to the individual. However, only the individual is required to pay an amount under the court order. Is the spouse prevented from claiming the equivalent-to-spouse credit on the basis that the spouse is required to pay a support amount to the individual?

Position: No

Reasons: Whether or not the spouse is required to pay a support amount will be determined by reference only to the court order.

8 October 1998 External T.I. 9819125 - PRINCIPAL RESIDENCE

Unedited CRA Tags
54

Principal Issues: Principal Residence - land in excess of 1/2 hectare

Position: Law generally explained

Reasons: Specific facts and documentation not available

8 October 1998 External T.I. 9814585 - CHILD SUPPORT

Unedited CRA Tags
56(1)(b) 60(b)

Principal Issues: A court order is prepared in circumstances where the Federal Child Support Guidelines must be used in respect of an individual and his or her spouse who have joint custody of their child. The use of the Guidelines results in the individual paying a support amount (defined in subsection 56.1(4) of the Act) to the spouse and the spouse paying a support amount to the individual. However, only the individual is required to pay an amount under the court order. Is the spouse prevented from claiming the equivalent-to-spouse credit on the basis that the spouse is required to pay a support amount to the individual?

Position: No

Reasons: Whether or not the spouse is required to pay a support amount will be determined by reference only to the court order.

8 October 1998 External T.I. 9815245 F - FRAIS DE MATÉRIEL DIDACTIQUE

Unedited CRA Tags
118.5

Position Adoptée:

7 October 1998 External T.I. 9821185 - NON-PROFIT ORGANIZATION - CORPORATION

Unedited CRA Tags
149(1)(l)

Principal Issues: non-profit status of a corporation that has foreign subsidiaries.

Position: general comments

Reasons: factual situation

6 October 1998 External T.I. 9822135 - DEDUCTIONS FOR IN-HOME EXPENSES

Unedited CRA Tags
8(1)(i) (ii) (iii) 8(13) 8(10)

Principal Issues: Are deductions for in-home expenses allowed if the employee has a choice to work at home or at the employer’s office.

Position: No deduction allowed unless employer requires employee to work at home

Reasons: 8(1)(iii) and IT352R2

6 October 1998 External T.I. 9803205 - QUALIFIED SMALL BUSINESS CORPORATION SHARE

Unedited CRA Tags
110.6(15)(b)

Principal Issues: Whether, where paragraph 110.6(15)(b) applies, the value of the shares of the corporation that is the object of paragraph 110.6(15)(b) must be reduced by an amount equivalent to the reduction in the value of the assets of the corporation.

Position: No reduction should take place.

Reasons: Wording of paragraph 110.6(15)(b) is such that it does not require an equivalent reduction in the value of the assets.

6 October 1998 External T.I. 9814595 F - CRÉDIT D'IMPÔT POUR ÉTUDES

Unedited CRA Tags
118.6(2)

Position Adoptée:

6 October 1998 External T.I. 9821325 - RETIREMENT CENTRE ANNUAL FEES

Unedited CRA Tags
118.2(2)

Principal Issues: What is appropriate % of retirement home fees deductible as a medical expense ?

Position: NIL unless patient is certified (118.3(1)) and retirement home provides nursing care of the type provided by a nursing home. Sent a copy of correspondance to Toronto North TSO

Reasons: 118,2(2)(b)

5 October 1998 External T.I. 9707015 - U.K. CONVENTION DEEMED DIVIDEND RULE

Unedited CRA Tags
article 27(4) U.K. Convention

Principal Issues: Whether interest earned by a corporation resident in Canada on a loan to a subsidiary resident in the United Kingdom where the interest is treated as a dividend under U.K. income tax law must, pursuant to Article 27(4) of the Convention, be treated as a dividend for the purposes of the Act.

Position: Article 27(4) of the Convention does not apply to the interest.

Reasons: Article 27(4) applies only the U.K. advance corporation tax credit. Any other interpretation leads to inappropriate results.

2 October 1998 External T.I. 9730635 F - CONTINGENT DES VERSEMENTS ET STIPULATION

Unedited CRA Tags
149.1(1)

Principales Questions:

1. Dans une situation donnée, est-ce qu’un lien de dépendance existe entre la fondation et une société pour permettre aux dispositions proposées à l’article (21) de l’Avis de motion des voies et moyens du 18 février 1997 de s’appliquer?
2. Qu’est-ce qui peut constituer une stipulation dans le cas de la règle du 10 ans prévue dans le calcul du contingent des versements d'une fondation de bienfaisance?
3. Si une stipulation existe à l’effet que les actions doivent être conservées pendant une période d’au moins 10 ans et si le rachat des actions se fait sur une période de 10 ans suivant la période de 10 ans initiale, les montants reçus lors des rachats successifs feront-ils partie du calcul du contingent des versements?

Position Adoptée:

2 October 1998 External T.I. 9731365 F - DROIT D'USAGE D'UNE AUTOMOBILE

Unedited CRA Tags
6(2) 6(2.1) 6(2.1)b)(i)

Principales Questions:
Est-il possible de restreindre la portée de l’expression «automobiles neuves que l’employeur a acquises au cours de l’année» au sous-alinéa 6(2.1)b)(i) de la Loi et de ne considérer dans ce calcul que les achats d’automobiles neuves semblables à celles qui sont mises à la disposition du vendeur d’automobiles?

Position Adoptée:
Non.

1 October 1998 External T.I. 9815655 - GIFT OF CAPITAL PROPERTY

Unedited CRA Tags
118.1(6)

Principal Issues: -gift of capital property
-exchange of shares

Position: general comments

Reasons: not enough info

1 October 1998 External T.I. 9825135 - DAMAGES, NEGLIGENT ADVICE

Unedited CRA Tags
248(1)

Principal Issues:

Would an amount paid, by the Superannuation Directorate for damages as a result of misinformation causing financial loss, to buy an annuity for the benefit of the claimant be taxable?

Position: No

Reasons:

30 September 1998 External T.I. 9822895 - MUNICIPAL CORPORATION

Unedited CRA Tags
149(1)(d.5)

Principal Issues: interpretation of 90% of capital test

Position: where corporation has share capital ownership determined by reference to capital.

Reasons: previous position

30 September 1998 External T.I. 9823735 - AUTOMATIC REDUCTION OF CHILD SUPPORT

Unedited CRA Tags
56.1(4)

Principal Issues:

29 September 1998 External T.I. 9814245 - QSBC - SUBSTITUTED SHARES

Unedited CRA Tags
110.6(14)(f) 110.6(7) 110.6(1)

Principal Issues:

29 September 1998 External T.I. 9818505 F - OPTIONS D'ACHATS D'ACTIONS

Unedited CRA Tags
248(28) 83(2) 7(1.1)

Principales Questions:

Est-ce que le paragraphe 248(28) s’applique lors d’un rachat d’action par une société ayant fait un choix en vertu du paragraphe 83(2) de la Loi? Les actions en question ont fait l’objet d’un avantage en vertu du paragraphe 7(1.1) lors du rachat.

Position Adoptée: Non.

25 September 1998 External T.I. 9820705 - HEALTH SERVICES PLAN

Unedited CRA Tags
248(1) 118.2(2)

Principal Issues: Is proposed plan a Private Health Services Plan?

Position: Question of fact

Reasons: Comments only provided, not a ruling

25 September 1998 External T.I. 9815005 - NPO INFORMATION RETURNS

Unedited CRA Tags
149(12)

Principal Issues: -information returns for npo
-withholding for honorariums

Position: general comments

Reasons: 149(12)

25 September 1998 External T.I. 9817595 - MORTGAGE, INTEREST IN REAL PROPERTY

Unedited CRA Tags
149(1)(o.2)

Principal Issues: Would a mortgage secured by real property constitute an interest in real property for purposes of clauses 149(1)(o.2)(ii)(A) and (B) of the Act?

Position: No.

Reasons: Under subsection 248(4), an interest in real property specifically excludes a mortgage secured by real property..

24 September 1998 External T.I. 9808695 - REPORTING OF COMMISSION INCOME

Unedited CRA Tags
5 6 7

Principal Issues: are gross commissions reported in box 14 of T4?

Position: yes

Reasons: gross commissions must be reported, deduction of expenses by commission sales persons must be disclosed on T1 as employment expenses

10 September 1998 External T.I. 9811015 - FORM T2202A - XXXXXXXXXX

Unedited CRA Tags
118.5 118.6

Principal Issues:

29 July 1998 External T.I. 9611045 F - FRAIS DE VÉHICULE À MOTEUR

Unedited CRA Tags
8(1)h.1) 6(6)

Position Adoptée:

Technical Interpretation - Internal

22 October 1998 Internal T.I. 9818577 F - SITE INTERNET- GENERALITE

Unedited CRA Tags
9

Principales Questions: traitement fiscal des frais payés pour établir un site internet

Position Adoptée: traitement fiscal dépend du type de site developpé il faudrait analyser un cas précis

19 October 1998 Internal T.I. 8M18146 - FOREIGN TAX CREDIT ON U.S. AMT

Unedited CRA Tags
Article XXIV of U.S. Treaty 126(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.

July 21, 1998
File #8M1814

Alternative Minimum Tax and Credit for Prior Year Minimum Tax
of the United States and their Effect on Canadian
Foreign Tax Credit For U.S. Citizens Resident in Canada

Summary

19 October 1998 Internal T.I. 9826226 - TAXATION OF U.S. CITIZENS RESIDENT IN CANADA

Unedited CRA Tags
Article XXIV of U.S. Treaty

Principal Issues: Foreign tax credit computation for U.S. citizens resident in Canada

Position: Paragraphs 4, 5 and 6 of Article XXIV of Canada-U.S. Income Tax Convention should be followed.

Reasons:One of the main purposes of Article XXIV, in addition to elimination of double taxation, is to allocate tax revenue to the contracting states in accordance with the provisions of that Article.

14 October 1998 Internal T.I. 9825087 - CHILD SUPPORT

Unedited CRA Tags
56.1(4) 56(1)(b) 60(b)

Principal Issues:
A written agreement dated XXXXXXXXXX , requires the father of the children to pay $XXXXXXXXXX per month in child support. The written agreement indicates that the amount is open for review on XXXXXXXXXX annually. A court order dated
XXXXXXXXXX , requires that the father pay child support of $XXXXXXXXXX per month, net of tax, commencing XXXXXXXXXX . The court order also indicates that the child support shall be increased annually on XXXXXXXXXX of each year commencing in XXXXXXXXXX in accordance with s. 34(5) and 34(6) of the Family Law Act. Is the court order considered to be a court order made after April 1997?

Position:
Yes, the court order dated XXXXXXXXXX , is considered to be a court order made after April 1997 and paragraph (a) of the definition of “commencement day” in subsection 56.1(4) applies.

Reasons:
Paragraph (a) of the definition of “commencement day” in subsection 56.1(4) states that where an agreement or order is made after April 1997, the commencement day of the agreement or order is the day it is made. As the court order supersedes the pre-May 1997 written agreement, it is an order made after April 1997. In this particular case, subsections 56.1(3) and 60.1(3) do not apply. There is no indication from the wording of the court order that the written agreement is incorporated into the court order or that the payments made prior to the court order are deemed to be made pursuant to the court order.

13 October 1998 Internal T.I. 9821967 - STOCK OPTION, WITHHOLDING TAXES

Unedited CRA Tags
7(1) 153(1)

Principal Issues:

How is a stock option benefit computed and is the benefit subject to withholding taxes?

Position: Computed under 7(1)(a) and withholdings a Source Deductions question.

Reasons:

1 October 1998 Internal T.I. 9813867 F - PÉNALITÉ 163(2)

Unedited CRA Tags
163(2) 152(7) 162(1)

Principales Questions:
Est-ce qu’il est possible d’appliquer la pénalité prévue au paragraphe 163(2) de la Loi à une cotisation initiale établie en vertu du paragraphe 152(7) de la Loi lorsque le contribuable n’a pas produit de déclaration de revenu?

Position Adoptée:
Non.

24 September 1998 Internal T.I. 9823157 - CHILD SUPPORT PAYMENTS

Unedited CRA Tags
56.1(4) 56(1)(b) 60(b)

Principal Issues: A consent order dated XXXXXXXXXX , requires the father of the child to pay $XXXXXXXXXX per month in child support but this amount may be varied annually as of XXXXXXXXXX of each year, based on the father’s annual employment income for the preceding year. The child support payable for each successive year is to be calculated on the father’s annual income based on a table annexed to the court order. A court order dated XXXXXXXXXX , orders the father to pay “support” of $XXXXXXXXXX per month . A payment order was issued to the father’s employer and payments are to be made directly to the Family Court.

1. Would the XXXXXXXXXX Consent Order that provides for automatic built-in increases in the amount of child support as of XXXXXXXXXX , come under the new tax treatment when the amount to be paid under the order changes in accordance with its stated provisions?

2. Is the new order dated XXXXXXXXXX , an order “made after April 1997” for purposes of paragraph (a) of the definition of “commencement day” in subsection 56.1(4)?

Position:

1. No, the automatic built-in increases in child support in the Consent Order are not considered to be a variation of child support.

2. The new order dated XXXXXXXXXX , has not varied the Consent Order dated XXXXXXXXXX since the increase in child support was built in to the pre-May 1997 Consent Order. The new court order dated XXXXXXXXXX , is an “order made after April 1997” for purposes of paragraph (a) of the definition of “commencement day” in subsection 56.1(4).

Reasons: See Question # 22 of #9723088 and T2020 with the Dept. of Finance and XXXXXXXXXX

24 September 1998 Internal T.I. 9817357 - CLERGYMAN'S RESIDENCE

Unedited CRA Tags
8(1)(c)

Principal Issues: An individual is ordained as a minister in an Anglican church. The individual's duties include administering a Chaplaincy Education Program for the XXXXXXXXXX , and to overview clinical and educational work of students in the XXXXXXXXXX region. In addition, the individual is the site Chaplain at a hospital. Furthermore, the individual is called upon by the Bishop on a regular basis to fill in parish vacancies. The individual's main source of income is from his position as Chaplain/Co-ordinator of Pastoral Education and Training. Does the individual qualify for the clergyman's residence deduction under paragraph 8(1)(c)?

Position: Yes.

Reasons:
As an ordained minister of the Anglican Church, the individual meets the status test of paragraph 8(1)(c). In addition, He meets the function test. According to his job description and other information submitted, one of his duties as Chaplain of a hospital is the delivery of pastoral services to patients at the hospital. This includes visitation of the sick, Baptisms, Funerals and Memorial Services and Marriage ceremonies. Due to the exceptional nature of chaplaincies, our view, as indicated in paragraph 5 of IT-141, is that serving as a Chaplain in the armed forces or with an institution is generally considered to be ministering to a congregation.

23 September 1998 Internal T.I. 9823897 - CHILD SUPPORT PAYMENTS

Unedited CRA Tags
56.1(4) 56(1)(b) 60(b)

Principal Issues: A written agreement dated XXXXXXXXXX , requires the father of the children to pay $XXXXXXXXXX per month in child support. A divorce judgment dated XXXXXXXXXX , requires that the father pay child support of $XXXXXXXXXX per month in addition to $XXXXXXXXXX per month for additional expenses (child care, extracurricular activities) of the children. Pursuant to the Divorce Judgment, the mother has to pay $XXXXXXXXXX per month to the father for additional expenses (child care, extracurricular activities and medical and dental coverage premiums) of the children. The net amount paid for child support by the father is still $XXXXXXXXXX per month (XXXXXXXXXX ). The parents have joint custody of the three children. Has the amount of child support been varied? Is the Divorce Judgment considered to be a court order made after April 1997?

Position: Yes, the Divorce Judgment is considered to be a court order made after April 1997 and paragraph (a) of the definition of "commencement day" in subsection 56.1(4) applies. Whether the child support amount has been varied is not relevant since subparagraphs (b)(i) to (iv) of the definition of "commencement day" in subsection 56.1(4) of the Act do not apply to this particular situation.

Reasons: Paragraph (a) of the definition of "commencement day" in subsection 56.1(4) states that where an agreement or order is made after April 1997, the commencement day of the agreement or order is the day it is made. As the Divorce Judgment supersedes the pre-May 1997 written agreement, it is an order made after April 1997. In this particular case, subsections 56.1(3) and 60.1(3) do not apply. There is no indication from the wording of the court order that the written agreement is incorporated into the court order or that the payments made prior to the court order are deemed to be made pursuant to the court order.

14 September 1998 Internal T.I. 9817817 F - FOND ENREGISTRÉ DE REVENUS DE RETRAITE

Unedited CRA Tags
146.3

Principales Questions:
Est-ce que le contribuable doit s'imposer sur des montants minima provenant d'un FERR lorsque les versements sont faits à un compte en fiducie, en attente du règlement d’un litige.

Position Adoptée: Pas de réponse concluante.

2 September 1998 Internal T.I. 9804327 - HOUSE PURCHASED FOR BUSINESS- TAXABLE BENEFIT

Unedited CRA Tags
6(1)(a) 15(1) 6(6)

Principal Issues:

Whether house provided to employees and shareholders constitutes a taxable benefit.

Position:

Question of fact as to whether individual who is both a shareholder and an employee receives a benefit and whether they receive it in their capacity as shareholder or employee. If received by virtue of employment, benefit could be excluded if location is a special work site.

Reasons:

1 September 1998 Internal T.I. 9822176 - GOV'T ASSIST. - XXXXXXXXXX

Unedited CRA Tags
12(1)(x) 149(1)(l)

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.

		September 1, 1998
	Ministerial Correspondence	HEADQUARTERS
	GST\HST Rulings and Interpretations	J. Gibbons
	  Directorate	(613)957-8953
	Attention:  Alanna Ulicki
		7-982217

Minister’s Mail #98-05055M

27 August 1998 Internal T.I. 9821516 - MOVING EXPENSES

Unedited CRA Tags
62

Principal Issues:

ISSUE: In 1997, the individual lived in a house owned by his employer. When he lost his job, he was evicted from the house and moved to a new residence that was less than 40 kilometres away from the old residence. The individual indicates that he has not found employment in his vocation but it is not clear if the individual is still unemployed. Are the moving expenses incurred as a result of the move from the old residence to the new residence deductible under subsection 62(1)?

Position:
It is a question of fact but it appears from the limited information available that the individual is not entitled to deduct moving expenses.

Reasons:
The conditions in section 62 are not met. The individual did not move to start a job or business or to begin full-time attendance at an educational institution. In addition, it appears that the taxpayer is still unemployed and therefore has no income from employment at a new work location. Lastly, it appears that the move did not result in the taxpayer living at least 40 kilometres closer to a new work location.

13 August 1998 Internal T.I. 9818587 - DEFERRED SALARY LEAVE PLANS

Unedited CRA Tags
reg 6801

Principal Issues:
Does the subject plan comply with the provisions of paragraph 6801(a) of the Regulations?

Position: No.

Reasons:
Contravenes various provisions of paragraph 6801(a) of the Regulations.

30 July 1998 Internal T.I. 9805487 F - CDA PRICE ADJUSTMENT CLAUSE

Unedited CRA Tags
83(2) 184(3)

Principal Issues: Can a taxpayer avoid Part III Tax using a price adjustment clause to modify the capital dividend amount elected under 83(2)?

Position: We do not accept a price adjustment clause in such a situation.

Reasons: The taxpayer has the responsability to establish its CDA. The taxpayer can elect under 184(3) to treat the excess as a separate dividend but not as a loan.

30 July 1998 Internal T.I. 9817316 - WORKERS COMPENSATION BOARD - PENSION

Unedited CRA Tags
56(1)(a)(i) 248(1) 56(1)(v)

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.

		July 30, 1998
B. Holloway	Roberta Albert
	Director	957-2100
	Business Returns Processing Division
	Attention:	Joe Hartwick
		Information Returns Section
		7-981731

Ontario Workers’ Compensation Board (WCB) - Pension Fund

23 July 1998 Internal T.I. 9808167 - RELATED EMPLOYERS, GOVERNMENTS

Unedited CRA Tags
60(j.1)

Principal Issues: Whether two employers are related for the purposes of paragraph 60(j.1)?

Position: Yes.

Reasons: Service with previous employer recognized in respect of pension benefits.

11 June 1998 Internal T.I. 9803447 F - CSST - AJUSTEMENT RÉTROSPECTIF

Unedited CRA Tags
18(1)a)

Principales Questions:

Est-ce qu’une estimation de l’ajustement provisoire et de l’ajustement définitif de la cotisation prévues par la Loi sur les accidents du travail du Québec applicables à certains employeurs, est déductible dans le calcul du revenu du contribuable pour une année d’imposition donnée compte tenu que ces montants ne sont fixés qu’après la fin de l’année d’imposition du contribuable ?

Position Adoptée:

5 June 1998 Internal T.I. 9802897 F - FRAIS DE GARDE D’ENFANTS - SCOUT

Unedited CRA Tags
63(3)

Principales Questions:

Est-ce que les cotisations versées à un mouvement scout pour assister aux activités, soit des réunions hebdomadaires et 3 camps sont des frais de garde d’enfants admissibles aux fins du paragraphe 63(3) de la Loi.

Position Adoptée:

21 May 1998 Internal T.I. 9809487 - BITUMINOUS SANDS IN-SITU PROJECT

Unedited CRA Tags
1104(7) 1107(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.

May 21, 1998

	Québec Tax Services Office					Resource Industries
	Richard Cloutier 						  Section
	Mining Specialist						Peter Lee
(613) 957-8977

980948

Bituminous Sands In-Situ Project

Ministerial Letter

28 September 1998 Ministerial Letter 9822428 - CANADIAN FILM OR VIDEO PRODUCTION TAX CREDIT

Unedited CRA Tags
125.4

Principal Issues:

Will distributors be viewed as having acquired copyright ownership in a film?

PositionS:

Not in a normal commercial arrangement. Question of fact, based on documents and agreements. We are still developing guidelines for less than obvious situations.

Reasons:

21 August 1998 Ministerial Letter 9818298 - DONATIONS BY SPONSORS TO A LOTTERY

Unedited CRA Tags
118.1

Principal Issues:
Whether cash contributions made by XXXXXXXXXX towards a lottery prize qualify as a charitable gift for income tax purposes if the winner of the lottery has to apply the prize money towards XXXXXXXXXX

Position:
Since each owner has the potential to receive a considerable benefit for the contribution (XXXXXXXXXX ), it is our view that the contribution would not qualify as a gift. However, if XXXXXXXXXX were to make the contribution, it is possible that the contribution would be deductible as a business expense provided the expense was incurred for the purpose of earning income from XXXXXXXXXX and the expense was reasonable in the circumstances.

Reasons: Common law definition of “gift”.

17 July 1998 Ministerial Letter 9811928 - MOVING EXPENSES

Unedited CRA Tags
6(1)(b) 6(1)(a) 62

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 ‚mis, peut ne pas repr‚senter la position actuelle du ministŠre.

XXXXXXXXXX

Dear XXXXXXXXXX:

The Honourable Herb Dhaliwal, Minister of National Revenue, has asked me to reply to your letter of February 24, 1998, concerning moving expenses which was forwarded to him by the Right Honourable Jean Chr‚tien, Prime Minister of Canada.

1 June 1998 Ministerial Letter 9806968 F - ASSOCIATION PRODUCTEURS FILM

Unedited CRA Tags
125.4

Principales Questions: Modifications législatives suggérées par une association concernant le crédit d’impôt pour production cinématographique ou magnétoscopique canadienne.

Position Adoptée: Aucune