Income Tax Severed Letters - 2000-07-07

Miscellaneous

8 May 2000 Miscellaneous 2000-0016776 - FULL TIME STUDENT FOR LLP

Unedited CRA Tags
146.02

Principal Issues:
1. Is the full-time question separate from the qualifying educational program question
2. If they are separate tests, is it reasonable to abide by the educational institution's opinion of whether the student is full-time or not.

Position:
1. They are separate tests;
2. Yes

Reasons:
1. The wording in the provisions for LLP;
2. It is the position of the CCRA and is consistent with the requirements for the education tax credit

Ruling

2000 Ruling 2000-0008923 - WHETHER SALE OF ACCOUNTS REC. ON INCOME ACCT.

Unedited CRA Tags
9(1) 18(1)(a)

Principal Issues: (i) Whether the sale of accounts receivable is on income or capital account where it is not part of the sale of the entire business. (ii) Whether the gain on the collection of accounts receivable is on income or capital account.

Position: (i) Income. (ii) Income.

Reasons: (i) In addition to the Agency's administrative position in paragraph 8 of IT-188R, at the 1999 APFF we stated that, generally, it is our view that the sale of accounts receivable, other than as part of the selling of a business, is income.
(ii) Based on IT-459, the transaction is an adventure or concern in the nature of trade.

2000 Ruling 2000-0008983 - INTEREST EXPENSE LOSS CONSOLIDATION

Unedited CRA Tags
20(1)(c)

Principal Issues: Interest Deductibility

Position: OK

Reasons: Standard Ruling on Loss consolidation

1999 Ruling 9924563 - SINGLE-CLASS TO MULTI CLASS MUTUAL FUND TRUST

Unedited CRA Tags
54 245(2)

Principal Issues: Conversion of single class to multi-class units by renaming or reclassification & the addition of two new classes of units-
Issue 1-Does the reclassification from one type to another dictate a disposition of old units for new?
Issue 2-Does the addition of new series of funds create a disposition?

Position:
Issue 1-As the trust indenture are first being amended to permit the addition of classes & to permit reclassification upon the investor meeting certain criteria & the inherent bundle of rights of the unitholder is not being changed--No Disposition by existing unitholders & no disposition on conversion.
Issue 2- No disposition on addition of units

Reasons:
Issue 1- no change in inherent bundle of rights
Issue 2-change not so significant to cause a disposition

Technical Interpretation - External

7 July 2000 External T.I. 2000-0015455 F - Allocation de retraite

Unedited CRA Tags
56(1)a)

Position Adoptée:
Question de fait.

7 July 2000 External T.I. 2000-0014325 - Transitional Rules - Stop Loss

Unedited CRA Tags
112(3)

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.

Question 4
Stop-Loss Rules - Corporate Mergers

5 July 2000 External T.I. 2000-0013275 - Capital dividend account

Unedited CRA Tags
89(1)(c) 14(1)

Principal Issues: Non-arm's length transfer of an eligible capital property by an individual to a corporation followed by a sale to an arm's length person. Is the corporation's CDA reduced by paragraph 20(1)(b) deductions claimed by individual.

Position: No but consideration of the application of subsection 69(11) is required.

Reasons: The law.

4 July 2000 External T.I. 2000-0014725 F - REER - Placement étrangers

Unedited CRA Tags
206(1) 4900(1)b) 89(1)

Principales Questions: Des actions d'une société constituée au Canada sont-elles des biens étrangers au fins des REER.

Position Adoptée: aucune

30 June 2000 External T.I. 2000-0016605 - Small business investment amount

Unedited CRA Tags
248(1) 107.4(1)(2)(3) 206(2)

Principal Issues: 1) When there is a transfer of a small business property from one RRSP trust to another of the same annuitant, or from an RRSP to a RRIF trust of the same annuitant, does the transferee trust obtain a "small business property"? 2) Is the transferor's "cost amount" preserved as the "cost amount" to the transferee for purposes of calculating the "small business investment amount"? 3) Would the answers to 1) and 2) be the same if the transferee trust received only a portion of the transferor's property or already held its own property before the transfer?

Position: 1)Yes; 2) Yes; 3) Yes transferee would obtain a "small business property" and, yes, generally property's cost would be preserved.

Reasons: 1) The definition of "small business property" is proposed to be amended to allow certain inter-plan trust transfers by a single annuitant or between such trusts of spouses and not lose the 3-for-1 bump in foreign property room. 2) The "cost amount" to the transferee will generally be the cost to the transferor trust for one of two reasons: (a) because it is the position of the Agency as expressed in IT-412R2 that wholesale transfers of property between RRSP trusts of the same annuitant do not result in a change in trust ownership - a disposition - and therefore occur at cost; or (b) because of proposed amendment to exclude wholesale transfers of property between or among RRSP or RRIF trusts of the same annuitant from the definition of "disposition" [proposed paragraph(g) of subsection 248(1) definition; 3) a transfer of a single small business property does not cause it to lose its status as a small business property under the proposed definition of "small business property" and although it will be a "disposition", the proposed amendments to 107.3(1),(2),(3) generally result in these transfers between trusts of the same annuitant occurring at cost.

29 June 2000 External T.I. 2000-0014365 - CALU 2000 - Question 7

Unedited CRA Tags
12.2(1)

Principal Issues: The CCRA has previously stated that a life insurance policy issued by a non-resident insurer is not precluded from qualifying as an "exempt" policy. However, the information necessary to determine if a life insurance policy is "exempt" may be unavailable to a policyholder. What should a resident taxpayer report with respect to a life insurance policy issued by a life insurer not carrying on a life insurance business in Canada? If the taxpayer reports nothing for Canadian tax purposes, would he or she be subject to any penalties for failure to report income on the policy? If the taxpayer used the services of a tax advisor to prepare his or her T1 return, would the CCRA consider imposing the penalties provided for in the proposed amendments to section 163.2 on the advisor who prepared the return, assuming nothing is reported for Canadian tax purposes with respect to the policy.

Position: If a life insurance policy issued by a non-resident insurer does not constitute an exempt policy to the Canadian taxpayer (or if the taxpayer is otherwise unable to establish whether the policy so qualifies), the income accrual in subsection 12.2(1) must be made. The onus is on the taxpayer to establish that his or her policy is an exempt policy. A failure to include this income would render the taxpayer liable for penalties for the failure to report the income. If a tax advisor were to counsel a taxpayer to not report this income, the advisor would also be liable for penalties, pursuant to proposed section 163.2.

Reasons: The amount that must be included in a taxpayer's income under subsection 12.2(1) must be determined having regard to all the facts. It is the taxpayer's responsibility to determine what is the savings or accumulation component of his or her policy.

27 June 2000 External T.I. 2000-0013565 F - DÉDUCTIBILITÉ DES PÉNALITÉS ET DES AMENDES

Unedited CRA Tags
18(1)a)

Principales Questions:
Les sanctions pécuniaires proposées par l'ADRC en vertu du RSAP sont-elles déductibles sous 18(1)a) LIR compte tenu de la décision de la Cour Suprême du Canada dans l'arrêt 65302 B.C. Ltd (99 DTC 5799).

Position Adoptée:
Nous ne sommes pas en mesure de répondre actuellement à cette question puisque nous procédons à un examen de notre position à la lumière de cette décision.

27 June 2000 External T.I. 2000-0026405 - MEDICAL EXPENSES

Unedited CRA Tags
118.2(2)(m)

Principal Issues: Is the cost of modifications to a non-made to order orthopaedic shoe a device or equipment for purposes of paragraph 5700(e) of the Income Tax Regulations?

Position: No.

Reasons: The only cost allowed under paragraph 5700(e) of the Regulations is the cost of a made to order orthopaedic shoe or boot in accordance with a prescription to overcome a physical disability of an individual. Modifications to a non-made to order shoe would not meet such a requirement.

26 June 2000 External T.I. 2000-0018525 - STRUCTURED SETTLEMENTS-COMMOTATION

Unedited CRA Tags
12.2

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.

Principal Issues

26 June 2000 External T.I. 2000-0029565 - MEDICAL EXPENSES

Unedited CRA Tags
118.2(2)

Principal Issues: Are expenses incurred for umbilical cord blood extraction, processing and storage eligible medical expenses?

Position: No

Reasons: Paragraph 118.2(2)(a) of the Act does not apply since payments must be in respect of medical services which must involve a medical condition and such a condition does not apply. Paragraph 118.2(2)(o) of the Act does not apply since we are not dealing with a diagnostic procedure.

26 June 2000 External T.I. 2000-0021205 - TAX TREATMENT - DISABILITY PAYMENTS

Unedited CRA Tags
56(1)(v) 6(1)(f)

Principal Issues: We have been asked whether disability payments made to an individual can be included in income under paragraph 56(1)(v) of the Income Tax Act (the "Act") with the result that a corresponding deduction could be claimed paragraph 110(1)(f) of the Act.

Position: An opinion could not be provided.

Reasons: The specific facts and documentation were not available.

26 June 2000 External T.I. 1999-0008365 F - Disability insurance from NR payors

Unedited CRA Tags
6(1)(f)

Principal Issues: (1) Whether income loss disability payments under a personal insurance policy from a source in Switzerland must be included in income in Canada.
(2) Whether disability payments under a Swiss government pension scheme similar to Canada's Old Age Security must be included in income in Canada.
(3) Whether Canada can tax payments in (2) above under the Canada - Switzerland tax convention.

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

Reasons: (1) Treatment of similar Canadian source payments.
(2) Question of fact. Likely is pension income under sub-paragraph
56(1)(a)(i).
(3) Canada retains the right to tax annuity and pensions under Article 18 of the Canada - Switzerland tax convention.

26 June 2000 External T.I. 1999-0012535 - Par. 2 Article XXII of Canada-US Treaty

Unedited CRA Tags
104(13) 214(3)(f)

Principal Issues: Meaning of the word "distributed"-as used in p.2 of Article XXII of the Canada-U.S. Convention

Position: word distributed also applies to amounts credited in this case

Reasons: as 214(3)(f) deems amounts to be paid or credited & does not differentiate between the two amounts, therefore an amount deemed to be paid or credited would be subject to p.2 of Article XXII

22 June 2000 External T.I. 2000-0006565 - Foreign Affiliates - Investment Business

Unedited CRA Tags
95(1)

Principal Issues: Whether business conducted with depositors, by a foreign affiliate which is carrying on a banking business, is relevant in the determination of whether the business is conducted principally with persons with whom the affiliate does not deal at arm's length for the purposes of the investment business definition in subsection 95(1).

Position: Such business is relevant in the determination.

Reasons: Unlike in most other businesses, in the banking business, persons who lend money to the bank (i.e. the depositors) are clients of the bank to whom services are provided.

21 June 2000 External T.I. 2000-0024095 - MEDICAL EXPENSES

Unedited CRA Tags
118.2(2)

Principal Issues: Is the cost of a massager referred to as a Mini Thumper Massager an allowable medical expense pursuant to subsection 118.2(2) of the Act?

Position: No.

Reasons: A massager is not included in any of the paragraphs of subsection 118.2(2) of the Act. It is also not included as a devise or equipment that is prescribed in section 5700 of the Income Tax Regulations.

20 June 2000 External T.I. 2000-0021735 - HEALTH AND WELFARE TRUST

Unedited CRA Tags
6(1)(a) 104

Principal Issues: Is a particular Health and Welfare Trust a "Health and Welfare Trust for Employees" as contemplated in Interpretation Bulletin IT-85R2?

Position: No

Reasons: As indicated in paragraph 5 of the bulletin a trust referred to in the bulletin is a trust arrangement under which the trustees receive the contributions from the employer or employers, and in some cases from employees, to provide such health and welfare benefits as have been agreed to between the employer and the employees. The trust referred to in the letter is one created by a union for its members.

20 June 2000 External T.I. 2000-0010925 - VEHICLE RATE HIGHER THAN CURRENT REASONABLE

Unedited CRA Tags
8(1)(R.1) 18(1)(r)

Principal Issues: Whether a rate of $0.50 per kilometer motor vehicle allowance would be more reasonable.

Position: Question of fact but under paragraph 18(1)(r) of the ITA, in order for an employer to deduct more than the prescribed amount, the allowance must be a reasonable amount and be included in the employee's income.

Reasons: As it is a question of fact, only general comments provided.

20 June 2000 External T.I. 2000-0028115 - Contingency fee-receiving struct. settlement

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

Principal Issues: Whether legal fees which will be paid over a period of time as the lawyer's client receives amounts from a structured settlement may be included in income as received.

Position: It depends on the contract between the lawyer and the client. If the client will be billable at the time the lawsuit is settled, the whole amount must be included in income under paragraph 12(1)(b). This is so in spite of the fact that the client will only receive the settlement over a number of years and will not be able to pay the fee all at once.

Reasons: Under the rules in paragraph 12(1)(b), an amount receivable in respect of property sold or services rendered is recognized on the earlier of the day the account for the service is rendered, or the day on which the account for the services would have been rendered if there were no undue delay in rendering the account (notwithstanding that the amount or any part thereof is not due until a subsequent year). As a result of these rules, revenues in respect of service contracts are recognized when the fee for the service is billed or able to be billed.

20 June 2000 External T.I. 2000-0012635 - Split Income and Rentals

Unedited CRA Tags
120.4

Principal Issues: Whether the mere rental of property constitutes the provision of "goods or services" within the meaning of proposed 120.4, the "split income" tax.

Position: No.

Reasons: The concept of rentals as distinct from the provision of goods and services is evident in 20(1)(m).

19 June 2000 External T.I. 2000-0006175 - Foreign pension, PA, RCA

Unedited CRA Tags
8308.1(2)(B)

Principal Issues: 1) Will there be a resident's contribution, within the meaning assigned by subsection 207.6(5.1) of the Act, where pension benefits under the foreign pension plan are funded with the pension plan's actuarial surplus? 2) Will there be a pension credit under 8308.1(2)(b) of the Regulations in respect of a foreign pension plan that is funding benefits for its members, including any Canadian resident members, with its actuarial surplus?

Position: 1) No. 2) No.

Reasons: 1) Without contributions, there cannot be a resident's contribution. 2) Subclauses 8308.1(2)(b)(iv)(I) and (II) of the Regulations specifically exclude a pension plan that has no contributions because of an actuarial surplus where any contribution, if made, would be a resident's contribution.

19 June 2000 External T.I. 2000-0011485 F - Déduction de primes d'assurance-salaire

Unedited CRA Tags
6(1)(f)

Principales Questions:
Est-ce que les primes payées à un régime distinct d'assurance invalidité pour longue durée par un employé afin de prolonger sa couverture au-delà des 104 semaines prévues par un premier régime de base auquel seul l'employeur contribue, sont déductibles à l'encontre des prestations d'assurance-salaire imposables qu'un employé reçoit en vertu du régime initial soit dans une situation où l'employé serait absent pour une période inférieure à 104 semaines ?

Position Adoptée:
Non. Seules les cotisations qu'un employé a versées à un régime donné qui est visé par l'alinéa 6(1)f) sont déductibles et ce, à l'encontre des prestations provenant de ce même régime.

16 June 2000 External T.I. 2000-0029195 - INDIAN INVESTMENT INCOME

Unedited CRA Tags
81(1)(a)

Principal Issues: Is the interest income earned from tax exempt employment income invested in G.I.C.s, in a bank off reserve, by a status Indian, tax exempt.

Position: No.

Reasons: Regardless of whether the bank was on or off reserve, since the interest income is generated off reserve, it would be considered to be earned in the normal economic mainstream and, accordingly, not considered personal property situated on a reserve.

16 June 2000 External T.I. 1999-0009945 F - Pertes droits acquis et actionnaire uniq

Unedited CRA Tags
112(3) 112(3.2)

Principales Questions:

1. Les actions d'une société détenues par son unique actionnaire, dans la situation donnée, pourraient-elles jouir de la règle transitoire, prévue à l'alinéa 131(11)b) de la Loi de 1997 modifiant l'impôt sur le revenu, relative au paragraphe 112(3) de la Loi?

Whether the grandfather rule provided under 131(11)(b) of the Income Tax Amendments Act, 1997, related to s.s. 112(3) of the Act would be applicable in the particular situation where shares of a corporation were owned by a sole shareholder?

2. La protection offerte par la règle transitoire, quant à la disposition des actions d'une société, pourrait-elle être perdue du simple fait qu'une filiale acquise après le 26 avril 1995 par la société donnée souscrive à une police d'assurance-vie?

Whether the benefit of the particular grandfather rule with respect to a disposition of a share of the capital stock of a corporation is lost in a situation where a subsidiary acquired by the corporation after April 26, 1995, subscribe to a life-insurance policy?

Position Adoptée:

12 June 2000 External T.I. 2000-0001815 - SHARE - FAMILY FARM CORPORATION

Unedited CRA Tags
70(10)

Principal Issues: A corporation is a partner in a two-tiered limited partnership. The activities of each partnership is the carrying on of a farming business. The sole shareholder of the Corporation is actively engaged on a regular and continuous basis in the farming business of both partnerships Do the shares constitute shares of the capital stock of a family farm corporation in subsection 70(10) of the Act.

Position: Not clear

Reasons: The information provided was too limited.

9 June 2000 External T.I. 1999-0010015 F - Interaction entre 55(2) et 186(1)

Unedited CRA Tags
55(2) 186(1)

Principal Issues: Comment fonctionne l'interaction entre les paragraphes 55(2) et 186(1) dans la situation présentée?

Position: Le paragraphe 55(2) s'applique à la totalité des dividendes. Aucun impôt de la Partie IV.

Reasons: Libellés des paragraphes 55(2) et 186(1). Si les sociétés étaient assujetties à l'impôt de la partie IV, le montant ferait l'objet d'un RTD.

8 June 2000 External T.I. 2000-0011495 - VARIATION TO CHILD SUPPORT - US RECIPIENT

Unedited CRA Tags
56.1(2) 56.1(4) 60.1(2) 60(B)

Principal Issues:

11 May 2000 External T.I. 2000-0020555 - MUNIC. CORP.-INDIAN BANDS

Unedited CRA Tags
81(1)(a) 149(1)(c) 149(1)(d.5)

Principal Issues:
General discussion of paragraph 149(1)(d.5). How does paragraph 149(1)(d.5) apply in various examples.

1) Would corporations filing tax returns in Quebec be exempt from tax pursuant to 149(1)(c)?
2) Would a First Nations geographical boundary be limited to its own reserve?
3) Can a Tribal Council be considered a municipality in Canada?

Position:
1) No,
2) Yes
3) No position given.

Reasons: 1) The Tawich position disagreed with the Otineka case and concluded that an Indian Band could not be considered a municipality for purposes of paragraph 149(1)(c) of the Act.
2) In the case of a First Nation that is a municipality, the geographical boundaries would encompass the First Nation's reserve lands and would not include other reserves
3) This issue has not been addressed by the Agency. We have not been provided sufficient information on which to make a determination.

9 May 2000 External T.I. 2000-0014355 - CALU 2000 GIFT BY WILL OR ESTATE

Unedited CRA Tags
118.1

Principal Issues: Gifts by Will vs Estate

Position: See Document

Reasons: See Document
CALU Annual Conference - 2000
Question 6
Charitable Bequests

9 May 2000 External T.I. 2000-0014250 - CALU 2000 - JOINT LAST-TO-DIE POLICIES

Unedited CRA Tags
148(9)

Principal Issues: Two lives are named under a last-to-die life insurance policy. Whether or not the payment to be made to a beneficiary upon the death of the first person to die would be an amount described in paragraph (j) of the definition of "disposition" in subsection 148(9).

Position: No

Reasons: Since there is no mortality risk with respect to the person that is first to die the payment would not be in respect of a person whose life is insured under the policy.

5 April 2000 External T.I. 2000-0014265 - CALU CONFERENCE - 5.110.6(14)

Unedited CRA Tags
110.6(14)

Principal Issues: Does the deeming provision of subsection 110.6(15) apply to the shares of all shareholders?

Position TAKEN: Yes.

Reasons: The deeming provision applies in determining the fair market value of the assets of the corporation, and it does not change if you are determining the status of the shares of one shareholder versus the status of shares of another shareholder. It is a calculation done at the corporate level. See 9906865, 9310120, 1999-000648, 9310100.

28 March 2000 External T.I. 2000-0014245 - Subsection 70(5.3) - Multiple Life Policies70(5.3)

Principal Issues:
Whether subsection 70(5.3) applies to multiple life policies.

Position:
No.

Reasons:
The wording of subsection 70(5.3) contemplates that there can only be a single life insured under the policy.

2000 External T.I. 2000-0014335 - TAXABLE BENEFITS

Unedited CRA Tags
6(1)(a)

Principal Issues: Whether paragraph 27 of IT-470R applies to exempt from taxation the commission received by a salesperson on the acquisition of segregated funds for personal investment.

Position: Commission is taxable.

Reasons: Paragraph 27 of IT-470R does not apply. Purchase of segregated fund is for investment reasons and not for 'personal purpose'. Similar treatment accorded to commission received by stockbrokers purchasing securities for personal investment.

Technical Interpretation - Internal

20 June 2000 Internal T.I. 2000-0023987 - QUALIFYING AMOUNT - DEDUCTION FOR LUMP SUM

Unedited CRA Tags
110.2

Principal Issues: Whether an amount paid pursuant to a settlement between an employer and its employees following an order by the Pay Equity Office can be considered a "qualifying amount" under section 110.2.

Position: No.

Reasons: The functions of the Pay Equity Office cannot be considered legal proceedings. Thus, the settlement reached following the issuance of an order by the Pay Equity Office of the Ontario Pay Equity Commission cannot qualify as "a contract by which the payor and the individual terminate a legal proceeding," and proposed new section 110.2 would not apply to the amount that is received from such a settlement.

20 June 2000 Internal T.I. 2000-0025627 - PEI - SKILLS DEVELOPMENT PROGRAM

Unedited CRA Tags
56(1)(r) 118.6(2)

Principal Issues: Whether benefits received by a taxpayer under the Prince Edward Island Skills Development program are taxable and whether the recipient is entitled to the education tax credit under subsection 118.6(2) of the Income Tax Act (the "Act") in respect thereof.

Position: The amounts are taxable and the recipient is not entitled to the education credit.

Reasons: Benefits received under the Skills Development Program are taxable pursuant to subparagraph 56(1)(r) of the Act, and the recipients of such amounts are not eligible for the education tax credit.

19 June 2000 Internal T.I. 2000-0028017 - cpp benefits T-E if rec'd by indian spouse

Unedited CRA Tags
81

Principal Issues: Whether CPP survivor benefits received by a status Indian surviving spouse are tax exempt.

Position: Yes, if recipient is a status Indian and the deceased spouse's employment income was tax exempt.

Reasons: As a result of Williams v. The Queen, 992 DTC 6320, the Agency is of the view that when payments from pension income including CPP benefits relate to income that was tax exempt, the payments will be tax exempt.

16 June 2000 Internal T.I. 2000-0028717 - OFFICE PURCHASED - EMPLOYEE

Unedited CRA Tags
8(1)

Principal Issues: Instead of paying rent, a client claims a "fair rental value " for a property he owns and uses for employment purposes.

Position: No deduction for "fair rental value" allowed.

Reasons: The ITA does not provide for such a deduction.

16 June 2000 Internal T.I. 1999-9914177 - REFUNDABLE INVESTMENT TAX CREDITS

Unedited CRA Tags
127.1 149(1)(d)

Principal Issues: 1. Is a corporation eligible to earn investment tax credits on SR&ED qualified expenditures in 1998.
2. Is the Corporation eligible to claim Refundable ITCs under section 127.1,
3. If it is eligible, can the corporation claim ITC refunds under paragraph (d) or (f) of the definition of refundable investment tax credit in subsection 127.1(2).

Position: 1. The corporation is eligible for ITCs in 1998 under 127(9) and under 127(10.1) of the Act.
2&3. The corporation is eligible for refundable ITCs in 1998 under section 127.1, under paragraph (d) of the definition of refundable investment tax credit in subsection 127.1(2).

Reasons: The corporation is a CCPC and meets the conditions entitling it to ITCs. During its 1998 taxation year, the Corporation was a qualifying corporation. The corporation was not exempt from tax under 149(1)(d) of the Act because 90% of the shares were not owned by a municipality. The Band Council only owned XXXXXXXXXX % of the shares. De facto control of the corporation was not with a person exempt from tax under section 149. The corporation was an excluded corporation because de jure control of the corporation was with the Council. The Council is a public body performing a function of government in Canada. The Corporation is related to the Council and therefore, is an excluded corporation as defined under subsection 127.1(2).

13 June 2000 Internal T.I. 2000-0025067 - DISABILITY TAX CREDIT

Unedited CRA Tags
118.3

Principal Issues: The Manitoba Income Tax Act provides for a cost of living tax credit for individuals. The tax reduction is denied to an individual in circumstances where any other person has claimed a disability tax credit on the person's federal return in respect of the individual. Where an individual has claimed the Manitoba tax reduction in a particular year that is now statute barred, are we prevented from reassessing another person's federal tax return using the fairness legislation for that particular year to allow the other person a credit in respect of the individual's disability?

Position: No.

Reasons: The federal legislation does not prevent a claim for the disability credit where a claim of any kind has been made under provincial legislation. However, since a possible reassessment in this matter would require the use of the "fairness legislation" (152(4.2) and 164(1.5)), the matter has been referred to the Assessment and Collection Branch.

12 May 2000 Internal T.I. 2000-0008237 F - Round table question 6 - Quebec CGA

Unedited CRA Tags
17(2) 17(3)

Principal Issues: Asked for an example of an offshore financing structure caught by new subsection 17(2) that would not have been Gaarable before the entry into force of new subsection 17(2).

Position: Basic example provided.

Reasons: Question of fact.

12 May 2000 Internal T.I. 2000-0008247 F - Loan to non-resident person

Unedited CRA Tags
17(2) 17(3) 17(9) 17(15)

Principal Issues: Does subsection 17(2) apply to a given offshore financing structure in different shareholding situations?

Position: Could apply or not, depending on facts assumed.

Reasons: Ss 17(2) applies in all situations except where paragraph 17(3)(a) applies i.e. where the particular person (creditor) and the non-resident person (debtor) are CFAs of the corporation resident in Canada.

4 May 2000 Internal T.I. 2000-0007667 F - PENSION ALIMENTAIRE - DISCRETION

Unedited CRA Tags
56.1(4)

Principales Questions :

Application de la définition du terme «pension alimentaire» à des faits particuliers.

Position Adoptée :

9 March 2000 Internal T.I. 2000-0008257 F - Mandat d'inaptitude

Unedited CRA Tags
256(1.4)

Principal Issues: Est-ce qu'un mandataire en vertu d'un mandat d'inaptitude est réputé posséder des actions en vertu de 256(1.4), si les pouvoir du mandataire incluent le pouvoir de contrôler les droits de vote afférents aux actions possédées par le mandant?

Position: Oui

Reasons: Libellé de 256(1.4)

2 March 2000 Internal T.I. 1999-0009997 - Artiste or entertainer

Unedited CRA Tags
art XV1

Principal Issues: Is the taxpayer who is a lighting designer for theatre and opera an entertainer for the purposes of paragraph 1 of Article XVI of the Canada-United States Income Tax Convention?

Position: No

Reasons: Article XVI is intended to cover only public performers, not technical staff, as noted in the Commentary to, and several articles concerning, Article 17 of the OECD Model Convention.

9 February 2000 Internal T.I. 1999-0008067 F - CHANTIER PART.-EUROPE TEMPORAIRE

Unedited CRA Tags
6(6)a)(i)

Principales Questions:
Différentes questions concernant l'application du sous-alinéa 6(6)a)(i) de la Loi à l'égard d'employés qui sont affectés à des emplois en Europe.

Position Adoptée:
Commentaires généraux.

Ministerial Letter

18 May 2000 Ministerial Letter 2000-0019478 - XXXXXXXXXX spin-off

Unedited CRA Tags
82

Principal Issues: Taxation of shares received on a spin-off.

Position: Taxed as a dividend.

Reasons: Shares distributed by a corporation to its shareholders on a pro-rata basis are considered as dividends for Canadian tax purposes.