Income Tax Severed Letters - 1999-10-01

Principal Issues: Taxation of investment income earned by status Indians.

Position: Income not exempt unless it can be shown that it was generated on reserve.

Reasons: The investment income is the property in question and if it was not generated on reserve it is considered to be earned in the economic mainstream and is not tax exempt.

Principal Issues: Whether the time that a property was not owned by a taxpayer but was used in a farming business in which the taxpayer was actively engaged on a regular and continuous basis can be considered in determining whether the property was before the transfer used principally in the business of farming in which the taxpayer, the taxpayer's spouse or any of the taxpayer's children was actively engaged on a regular and continuous basis.

Position: Yes.

Reasons: Subsection 73(3) does not include a requirement that property be owned by a taxpayer in those years where it is considered to be used principally in the business of farming in which the taxpayer, the taxpayer's spouse or any of the taxpayer's children was actively engaged on a regular and continuous basis.

Principal Issues: Transfer of RRSP from one trustee to another - foreign property transferred first.

Position: Subject to 206(2) penalty if foreign property exceeds limits

Reasons: 206(2) applies in respect of a taxpayer - each trust is a "taxpayer"

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 actuehe du ministère.

Xxxxxxxxxx					990154
C. Tremblay
A l'attention de : XXXXXXXXXX
Le 10 septembre 1999

OBJET : Alinéa 4O(2)g) de la Loi de l'impôt sur le revenu (la « Loi »)

Monsieur,

Principal Issues: To determine the beneficial ownership of a property whose title was put in the name of the taxpayer's mother "in trust".

Position: A general discussion on the requirements for a trust and bare trusts.

Reasons: The beneficial ownership of a property is a question of fact.

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 980845
G. Middleton
(613) 957-2122
Attention: xxxxxxxxxx

September 8, 1999

Dear Sir:

Principal Issues: Whether tax paid to Qatar is an income or profits tax

Position: Yes

Reasons: Based on the law of Qatar provided by the client, we found nothing to indicate that the tax is not an income or profits tax

Principal Issues: Whether U.S. AMT is creditable

Position: It depends on the source of income

Reasons: We have stated that U.A. AMT on Canadian source income is not creditable while generally AMT on U.S. source income resourced to Canada is creditable

Principal Issues: Whether a qualified subchapter S subsidiary ("QSSS") is a resident of the U.S. for the purpose of paragraph 1 of Article IV of the Canada-United States Income Tax Convention

Position: Yes

Reasons: Based on the provisions of the Internal Revenue Code regarding QSSS, there is no reason to say that it is not when our position on the residence status of an S corporation remains unchanged

Principales Questions:

Principal Issues: Taxation of January 2000 cheques issued in December 1999 in case of Y2K systems failure

Position: Taxable in 1999

Reasons: Wording of 56(1)(a)(i); 153(1)(p) and Reg 200(1)

xxxxxxxxxx 991236
S. E. Thomson
Attention: xxxxxxxxxx

Principal Issues: Are there any incentives for investing in small energy projects?

Position: No.

Reasons: Provisions such as CRCE and Class 43.1 are to encourage investment but no specific assistance programs exist.

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.

981369
	xxxxxxxxxx	G. Middleton
(613) 957-2122
May 7, 1999

Dear Sir: