Income Tax Severed Letters - 2000-07-21

Ruling

2000 Ruling 2000-0005843 - split-up butterfly

Unedited CRA Tags
55(3)(b) 55(3.2)(c)

Principal Issues: whether Parent can transfer shares of a specified class proportionally to children's corporations prior to a split-up butterfly reorganization

Position: No

Reasons: not a permitted exchange and 55(3.2)(c) deems parent not to be related to transferee

2000 Ruling 2000-0007513 - Index Tracking Mutual Fund

Unedited CRA Tags
108(2)(a) 132(6) 132(6.1)

Principal Issues:
1) Will the securities lending arrangements to be undertaken by the trust prevent the trust from qualifying as a mutual fund trust?
2) Will the consolidation of units as described in the proposed transactions result in a disposition to the unitholders?
3) Will the fact that the trust agreement provides that a unitholders right to redeem units may be suspended in certain circumstances prevent the units from satisfying the redeemable on demand requirement in paragraph 108(2)(a)?

2000 Ruling 2000-0015253 - DEFERRED SHARE UNIT PLAN

Unedited CRA Tags
REG 6801(d)

Principal Issues: Whether proposed deferred stock unit plan meets the requirements of paragraph 6801(d) of the Regulations?

Position: Yes

Reasons: All the requirements of the Regulation have been met

2000 Ruling 2000-0018453 - group loss utilization scheme

Unedited CRA Tags
20(1)(c)

Principal Issues: Related group loss utilization scheme

Position: No issues

Reasons: Similar to prior rulings

2000 Ruling 2000-0024123 - estate freeze

Unedited CRA Tags
55(3)(a) 85(1) 86(1)

Principal Issues: Estate Freeze

Position: Accepted, no attribution,

Reasons: Individuals involved all adults - father and children

2000 Ruling 2000-0030283 - Change in facts

Unedited CRA Tags
55(3)(b)

Principal Issues: change in facts

Position: n/a

Reasons: n/a

2000 Ruling 1999-0014333 - Wind Up of Partnership

Unedited CRA Tags
98(5) 110.6(2) 245(2)

Principal Issues:
1. Whether 98(5) applies on partnership windup into corporation.
2. Whether sale of partnership interests eligible for 110.6(2) deduction.
3. Whether 245(2) applies.

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

Reasons:
1. Corporation will be a member of partnership immediately before dissolution.
2. Provided they qualify as interests in a family farm partnership.

1999 Ruling 9832453 - DISPOSITION OF DEBT: INTEREST DEDUCTIBILITY

Unedited CRA Tags
20(1)(c) 54

Principal Issues: Disposition of Debt; Deductibility of Interest

Position: Amendments to Trust Indenture did not result in a disposition by the debtholders. Interest on assumed debt deductible pursuant to subparagraph 20(1)(c)(ii)

Reasons: See Issue Sheet

1999 Ruling 9915403 - INCORPORATION OF A PARTNERSHIP

Unedited CRA Tags
125(7) 9(1)

Principal Issues: Members of a XXXXXXXXXX partnership setting up corporations to provide their services

Position: Question of fact as to whether employed or self-employed. Incorporating a business not subject to GAAR.

Reasons: Cannot rule on a question of fact. IC 88-2, par 11.

1999 Ruling 9927493 - PARTNERSHIP

Unedited CRA Tags
96

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
XXXXXXXXXX 992749
XXXXXXXXXX

Attention: XXXXXXXXXX

XXXXXXXXXX, 1999

Dear Sirs:

Re: Advance Tax Ruling 991540

Technical Interpretation - External

18 July 2000 External T.I. 2000-0015915 F - PTPE - INTERET PAYE POUR HONORER CAUTION

Unedited CRA Tags
39(1)c) 39(12) 40(2)g)(ii)

Principales Questions:
Un actionnaire a cautionné un emprunt d'une société auprès de la banque. Est-ce qu'il peut déduire à titre de PTPE les intérêts versés dans les situations suivantes :

1. Il continue d'effectuer les paiements de l'emprunt à la banque au nom de la société qui est en difficulté financière et qui a cessé d'exploiter son entreprise;

2. Il emprunte un montant pour payer la caution et rembourse cet emprunt pendant quelques années.

Position Adoptée:
1. Question de fait.

18 July 2000 External T.I. 2000-0016015 F - REEA - LOCATION ET AUTRES SERVICES

Unedited CRA Tags
125(7)

Principales Questions:
Est-ce que le revenu d'une société qui offre des services de location d'espaces de bureau et d'une salle de conférence, de secrétariat, de réception, de système téléphonique, de photocopies, d'entretien ménager et autres services similaires est un revenu tiré d'une entreprise exploitée activement ?

Position Adoptée:
Commentaires généraux.

18 July 2000 External T.I. 2000-0016385 - INCOME OF A PASTOR

Unedited CRA Tags
8(1)c) 149(1)l) 6(1)b)(VII)

Principal Issues: We have been asked about whether the salary and other amounts paid to a pastor affects the status of a "registered charity" (a church) as defined in subsection 248(1) of the Income Tax Act (the "Act").

Position: General comments were provided

Reasons: The specific facts and documentation were not available.

17 July 2000 External T.I. 2000-0031155 F - Approved Association

Unedited CRA Tags
37(1)a)(ii)

Principales Questions: Demande d'agrément à titre d'association agréée.

Position Adoptée: Liste d'informations nécessaires pour l'analyse.

17 July 2000 External T.I. 2000-0036435 - BORROWING TO ACQUIRE MUTUAL FUNDS

Unedited CRA Tags
20(1)(c)

Principal Issues: Deductibility of interest on borrowing to acquire mutual funds

Position: Generally deductible

Reasons: Ludco decision decided on its particular facts

14 July 2000 External T.I. 2000-0018725 F - TRANSFER ENTRE CONJOINT

Unedited CRA Tags
20(1)c)ii) 245(2)

Position Adoptée:

14 July 2000 External T.I. 1999-0010485 - Convertible Bonds owned at time of emigration

Unedited CRA Tags
128.1

Principal Issues: What are the Canadian income tax implications under paragraph 128.1(4)(b) of the Act where an emigrating individual owns rights to acquire shares of a Canadian corporation (employer) under the terms of a debt agreement.

Position: No deemed disposition under subparagraph 128.1(4)(b)(iii) on emigration.

Reasons: The law.

14 July 2000 External T.I. 2000-0020425 - Immigration to Canada

Unedited CRA Tags
128.1

Principal Issues: Individual immigrating to Canada.

Position: General discussion.

Reasons: Need much more information.

13 July 2000 External T.I. 2000-0010115 - GROUP TERM LIFE INSURANCE POLICY

Unedited CRA Tags
6(4) 248(1) 56(1)a)(iii)

Principal Issues: Whether an administrative arrangement between an employer and an insurance company, where an amount is paid by the insurance company to the estate (or beneficiary) and then receives a reimbursement of that amount from the employer, is a "group term life insurance policy", as defined in subsection 248(1) of the Act, for the purposes of subsection 6(4) of the Act.

Position: No

Reasons: A contract, which does not involve a transfer of risk, is not considered to be a "policy of insurance." A payment made pursuant to such an arrangement is considered to be a "death benefit", as defined in subsection 248(1) of the Act.

12 July 2000 External T.I. 2000-0036775 - Foreign Affiliates - "Taxation Year"

Unedited CRA Tags
95(1)

Principal Issues: Would a change in the statutory and taxation year end used by a foreign affiliate for purposes of tax reporting in the country in which the affiliate is resident, result in a change to the affiliate's "taxation year" for purposes of the Act and Regulations.

Position: Generally yes.

Reasons: The definition in subsection 95(1) is vague. However, the context of foreign affiliate legislation and Regulations supports this interpretation.

6 July 2000 External T.I. 2000-0019865 - U.K. pension, transfer to RRSP

Unedited CRA Tags
60(j)(i)

Principal Issues: Can an amount held in the U.K. pension plan be transferred to an RRSP?

Position: Question of fact.

Reasons: Subparagraph 60(j)(i) will only apply where certain conditions are satisfied.

6 July 2000 External T.I. 2000-0020005 - Joint liability, RRIF, deceased

Unedited CRA Tags
160.2(2)

Principal Issues: Does the Act confer a right on a person (who owes taxes under the joint and several liability provision of subsection 160.2(2)) to collect such taxes from the deceased annuitant's estate?

Position: No.

Reasons: There is no provision in the Act that provides for this.

6 July 2000 External T.I. 2000-0029765 F - CREDIT TPS

Unedited CRA Tags
122.5(5)(c)

Principales Questions:

Crédit pour la TPS peut-il être versé après le décès?

Position Adoptée:

6 July 2000 External T.I. 2000-0018745 - Stock Options, Chile Convention

Unedited CRA Tags
7(1)

Principal Issues: Where a former Canadian resident exercises a Canadian stock options relating to Canadian employment while he or she resides in Chile, will the stock option benefit be taxed in Canada?

Position: Yes.

Reasons: The amount would be taxed in Canada under paragraph 2 of Article 15 of the Canada-Chile Income Tax Convention.

5 July 2000 External T.I. 2000-0019085 F - Mesure transitoire

Unedited CRA Tags
55(5)e)(iv)

Principal Issues: Est-ce que la mesure transitoire prévue au paragraphe 23(6) de l'avis de voies et moyens visant à modifier la Loi de l'impôt sur le revenu présenté le 5 juin 2000, relativement à l'application du sous-alinéa 55(5)(e)(iv) de la Loi, serait applicable en l'espèce ? / Whether the grandfather rule provided under subsection 23(6) of the Notice of Ways and Means Motion to amend the Income Tax Act tabled June 5, 2000, and related to subparagraph 55(5)(e)(iv) of the Act would be applicable to the particular situation?

Position: Oui. La mesure transitoire s'appliquerait si la les propositions législatives sont adoptées telles quelles. / Yes. Grandfather rule would apply in the particular situation, if the provisions of the Act are amended as proposed.

Reasons: Question de fait. / Question of fact.

5 July 2000 External T.I. 2000-0035625 - WORKERS COMPENSATION

Unedited CRA Tags
56(1)(v) 5(1)

Principal Issues: Whether an employer can make a payment that would be included in an employee's income under 56(1)(v).

Position: yes

Reasons: See comments in paragraph 4 of IT-202R2

4 July 2000 External T.I. 2000-0034015 - Capital Cost Allowance and M&P

Unedited CRA Tags
125.1 reg. 1100

Principal Issues: Whether a proposed deep water cooling project is manufacturing and processing of goods for sale and whether the "pipe" to be used in the project qualifies for the enhanced capital cost allowance announced in the February 28, 2000 budget?

Position: Question of fact.

Reasons: This can only be determined in the context of an advance income tax ruling and actual draft legislation.

4 July 2000 External T.I. 2000-0027345 - Non-arm's length sale of shares of non-res.

Unedited CRA Tags
212.1(1)(a) 215(1)

Principal Issues: Requirements under 215 where amount of paid-up capital cannot be accurately computed by a minority shareholder.

Position: Must comply with Act.

Reasons: The law.

4 July 2000 External T.I. 2000-0034345 - SHARES AS QUALIFIED INVESTMENTS

Unedited CRA Tags
REG 4900(6) REG 4900(12)

Principal Issues: Are shares of a particular corporation qualified investments for an RRSP?

Position: Discussed 4900(6)(a) and 4900(12)(a)

Reasons: We cannot comment on the qualification of a specific corporation as it a question of fact

4 July 2000 External T.I. 2000-0019645 - Terminate estate - clearance certificate

Unedited CRA Tags
159(2)

Principal Issues: IC82-6R2 lays out a procedure for the representative of an estate to follow in order to obtain a clearance certificate to enable the estate's property to be distributed. The estate is considered to be terminated on the rep's chosen date notwithstanding that the actual termination date will occur later. The rep is regarded as holding the estate's property on behalf of the beneficiaries after the chosen date. The question arises as to when the beneficiaries should report any income earned after that date. E.g. not until received?

Position: The beneficiaries should report income to the same extent they would if they held the property directly.

Reasons: If the estate is considered to be wound up on the chosen date, the rep thereafter merely holds the property as agent for the beneficiaries pending receipt of a ss.159(2) clearance certificate.

30 June 2000 External T.I. 2000-0026625 F - Exercice financier - 249.1

Unedited CRA Tags
249.1

Principal Issues: Le fait qu'une société de personnes compte parmi ses associés une autre société de personnes dont les dispositions de l'alinéa 249.1(1)b) de la Loi se sont appliquées avant qu'elle devienne membre de la première société de personnes entraînera-t-il l'application des dispositions de l'alinéa 249.1(1)b) de la Loi pour la première société de personnes?

Position: Le fait qu'une société de personnes compte parmi ses associés une autre société de personnes dont les dispositions de l'alinéa 249.1(1)b) de la Loi se sont appliquées au cours d'un exercice terminé avant qu'elle devienne membre de la première société de personnes n'entraînera pas, en soi, l'application des dispositions de l'alinéa 249.1(1)b) de la Loi à cette première société de personnes.

Reasons: Le libellé du sous-alinéa 249.1(1)b)(ii) de la Loi. Les modifications proposées dans l'avis de motion de voies et moyens du 5 juin 2000 relativement à l'alinéa 249.1(1)b) de la Loi portent uniquement sur le préambule de cet alinéa sans modifier le sous-alinéa 249.1(1)b)(ii) de la Loi.

30 June 2000 External T.I. 1999-0013945 - Rental property

Unedited CRA Tags
reg 1101(1ac)
building transferred to separate class when becomes rental property

Principal Issues:
1) Where a taxpayer owns buildings that are used in an active business, subsequently leases one of those buildings and it has a cost greater than $50M will it get transferred to a separate class and if eventually sold will the proceeds be credited to that class?

2.) Will ss 13(7) and 45(1) apply to this situation ?

Position:
1. Yes.
2. No

Reasons:
1. Subsection 13(5) and Regulation 1101(1ac)

30 June 2000 External T.I. 2000-0029605 - SPECIAL WORK SITE

Unedited CRA Tags
6(6)

Principal Issues: Is an allowance eligible for the special work site exemption as either a remote work location, or as a special work site to which the exception to clause 6(6)(a)(i)(B) applies for a distance less than 80 kilometres.

Position: 1. The location is not a remote work location.
2. Not a special work site.
3. Residence is less than 80 Km. from work site. From the facts provided, it is reasonable for the individual to return home on a daily basis.

Reasons: 1.There are established communities within 80 km. of the work site.
2. The individual's period of employment at the site is more than two years.
3. The position is based on the information available.

30 June 2000 External T.I. 2000-0026075 - Woodlot Management

Unedited CRA Tags
schedule VI class 33

Principal Issues: What is the appropriate tax treatment of "silviculture" treatment to a stand of timber?

Position: Question of fact.

Reasons: A review of silviculture expenditures will be made at the time they are incurred to determine the appropriate tax treatment.

30 June 2000 External T.I. 2000-0002745 - FILM TAX CREDITS

Unedited CRA Tags
125.4 125.5 REG 1106(3)

Principal Issues: whether Canadian film or video production tax credit may be reduced or eliminated?

Position: yes, depending on facts of case

Reasons: definition of "Canadian film or video production" in 1106(3)Regs
"investor rules" in 125.4 "assistance" in 125.4

30 June 2000 External T.I. 2000-0032155 - MUNICIPAL OFFICER EXPENSE ALLOWANCE

Unedited CRA Tags
81(3) 56(1)(a)(ii)

Principal Issues:
1. Can retiring allowances be used in the determination of a municipal officer's tax-free expense allowance?
2. Will any portion of a retiring allowance that is based on the tax-free allowance received as part of an officer's remuneration also be tax-free?

Position:
1. No.
2. No.

Reasons:
1. The Agency's policy position on the calculation of tax-free expense allowances is based on our understanding that the amount would be calculated with respect to remuneration and non-accountable expense allowances received in a year which specifically relate to the services performed and/or the expenses incurred in the year in the performance of those services. It was not envisioned that the 81(3) tax exemption would be based on amounts paid as a retiring allowance. A retiring allowance does not fit into the intended meaning of the term "salary or [other] remuneration" as the term is used in that provision or as contemplated for the purposes of applying the Agency's policy position.
2. The basis on which a retiring allowance is determined does not limit its taxability.

30 June 2000 External T.I. 1999-0014825 - Sale of sand

Unedited CRA Tags
12(1)(g)

Principal Issues: Is the sale of sand from a t|p's property on income or capital account?

Position: Question of fact.

Reasons: If sale constitutes business income or sales are contingent on the quantity of material taken and the application to that of some rate or standard such as price per ton.

29 June 2000 External T.I. 2000-0026635 F - APPLICATION 40(3.12) SUITE A 98(6)

Unedited CRA Tags
40(3.12) 98(6)

Principales Questions:

Dans une situation où un associé a déclaré un gain réputé provenir de la disposition de sa participation dans une société en commandite (SEC) conformément au paragraphe 40(3.1) de la Loi au cours d'une année d'imposition et où, par la suite, le paragraphe 98(6) de la Loi s'est appliqué lors du remplacement de SEC par une autre société de personnes en nom collectif (SENC), est-ce que l'associé pourrait choisir un montant à titre de perte réputée subie lors de la disposition de sa participation, tel que le prévoit le paragraphe 40(3.12) de la Loi, à l'égard de sa participation dans SENC ?

Position Adoptée:

29 June 2000 External T.I. 2000-0026775 - ALBERTA LIMITED LIABILITY PARTNERSHIP

Unedited CRA Tags
40(3.14) 96(2.4) 98 34.2(4)

Principal Issues:

1. Will the registration of a general Alberta partnership of professionals as an Alberta Limited Liability Partnership (LLP) create a new partnership, cause the disposition of assets of the partnership at fair market value, or cause a disposition of partnership interests by partners within the meaning of the Act ?

2. Will a partner of an Alberta LLP be considered a "limited partner" within the meaning of either proposed paragraph 96(2.4)(a) or 40(3.14)(a) of the Act, assuming the draft legislation is passed in its present form ?

3. Will the deductibility of the reserve in respect of December 31, 1995 income provided by subsection 34.2(4) of the Act be affected by an Alberta partnership becoming an Alberta LLP ?

Position:

1. For the purposes of this letter, we assume that there is no agreement between the partners providing for the dissolution of the partnership in the event of the registration of that partnership as an Alberta LLP. In such a case, section 79.4 of the Alberta Partnership Act states that the registration of a partnership as an Alberta LLP does not cause the dissolution of the partnership, and the Alberta LLP continues as the same partnership that existed before the registration. Therefore, the partnership would not cease to exist and the registration of a general Alberta partnership of professionals as an Alberta LLP would not create a new partnership and would not cause the disposition of assets of the partnership at fair market value.

In the letter, it is indicated that there would be no change to the basic attributes of the partnership, such as capital accounts, percentage interest of partners in profits or net assets, identity of partners, business of partnership or percentage of liability for losses of each partner except for the LLP consequences. As such, the registration of a partnership as an Alberta LLP would not result in a disposition of the partnership interests of the partners.

2. Assuming that the proposed amendments to paragraphs 40(3.14)(a) and 96(2.4)(a) are passed as stated in the Notice of Ways and Means Motion to amend the Income Tax Act, the Income Tax Application Rules and certain Acts related to the Income Tax Act of June 5, 2000, the partners of an Alberta LLP would not be considered as limited partners under paragraphs 40(3.14)(a) and 96(2.4)(a) only by reason of the limitation of debts, obligations or liabilities provided in subsection 11.1(1) of the Alberta Partnership Act.

3. As noted above, we assume, for the purposes of this letter, that there is no provision in the partnership agreement providing for the dissolution of the partnership in the event of the registration as an Alberta LLP. As there is no dissolution of the partnership, the registration as an Alberta LLP would not affect the deductibility of the reserve in respect of December 31, 1995 income provided by subsection 34.2(4) of the Act.

Reasons:

29 June 2000 External T.I. 1999-0011495 - ACB Partnership Interest

Unedited CRA Tags
53(1) 80(1)(k)

Principal Issues: If a partner converts a loan owing from the partnership into capital will it bump ACB of partnership interest pursuant to 53(1)(e)(iv)?

Position: Would appear to be the case

Reasons: Where a corporation issues shares to a shareholder in satisfaction of debt owing to the shareholder paragraph 80(2)(g) deems the amount paid in satisfaction of the debt to be equal to the fair market value of the share at the time of issue.. No similar provision for partnership.

28 June 2000 External T.I. 1999-0009185 - Fiscal Period

Unedited CRA Tags
249.1(1) 249(4)

Principal Issues: whether new fiscal period on change of control

Position: yes

Reasons: 249.1(1) Act; 249(4) ; new fiscal period not more than 53 weeks

28 June 2000 External T.I. 2000-0020025 F - OSBL - Loi des compagnies, Partie 1A

Unedited CRA Tags
149(1)(l)

Principales Questions: Une société constituée en vertu de la Partie 1A de la Loi sur les compagnies (Québec) peut-elle être une organisation sans but lucratif au sens de la Loi de l'impôt sur le revenu ?

Position Adoptée: Oui, si elle rencontre les conditions à cette fin.

28 June 2000 External T.I. 2000-0031635 - RRSP Investment in Shares of CCPC

Unedited CRA Tags
4900(6) 4900(12)

Principal Issues: Are shares of a particular corporation qualified investments for an RRSP?

Position: Discussed 4900(6)(a) and 4900(12)(a)

Reasons: We cannot comment on the qualification of a specific corporation as it is a question of fact.

28 June 2000 External T.I. 2000-0028665 F - QUOTAS DÉTENUS DEPUIS MOINS DE DEUX ANS

Unedited CRA Tags
85(1) 110.6(2) 14(1.1)

Principales Questions : demande de précisions au sujet du document 1999-000868.

Position Adoptée : les quotas peuvent être transférés un à un aux fins du paragraphe 85(1), afin de considérer que le dernier des deux biens transférés soit celui qui cause le gain en capital présumé calculé en vertu du paragraphe 14(1.1); ce gain est alors sujet aux règles de la DGC applicables aux biens agricoles admissibles.

27 June 2000 External T.I. 2000-0033095 - Foreign Reporting Reqts - Joint Ownership

Unedited CRA Tags
233.4

Principal Issues:
Foreign reporting requirements where joint ownership by spouses.

Position:
Test is for each spouse's share if jointly owned.

Reasons: Law.

27 June 2000 External T.I. 2000-0020995 - Non-Profit Organization

Unedited CRA Tags
149(1)(L)

Principal Issues: Whether certain income earning activities are taxable and whether reimbursement of members' travel costs from income earned would impair status of club as an NPO

Position: Not taxable as long as not a business (i.e. not for profit) - reimbursement is OK as long as costs are reasonable and incurred in course of club activities

Reasons: General criteria in IT - 496

26 June 2000 External T.I. 2000-0018205 - Options, non-aim's length transfer

Unedited CRA Tags
7(1)

Principal Issues: 1) Can stock options be transferred to an employee's wholly-owned corporation? 2) Can shares of the wholly-owned corporation be acquired by the employer without any tax ramifications to the employee?

Position: 1) Yes. 2) Probably not.

Reasons: 1) Paragraphs 7(1)(c) and (d) contemplate such transfers. 2) Series of transactions appear to be avoidance transactions and subsection 245(2) may apply.

26 June 2000 External T.I. 2000-0030415 - CCPC, worthless, RRSP, RRIF

Unedited CRA Tags
146(1)

Principal Issues: Can an RRSP or RRIF write-off an investment in a Canadian-controlled private corporation because the annuitant claims the shares are worthless?

Position: No.

Reasons: The trustee of the RRSP or RRIF must determine what the fair market value of the shares are and the plan has to retain the shares until the shares are cancelled, sold or withdrawn from the plan or the corporation is wound-up.

26 June 2000 External T.I. 2000-0019535 - MANAGEMENT FEES EARNED INCOME

Unedited CRA Tags
146(1)

Principal Issues: Will management fees earned from a person's non-resident holding company qualify as earned income under 146(1) of the Act?

Position: Question of fact.

Reasons: Earned income has to meet certain criteria described in the definition in subsection 146(1) of the Act. Without any details, we cannot make such a determination.

23 June 2000 External T.I. 1999-0011445 - inclusions & deductions in/from income

Unedited CRA Tags
248(28) 9(1)

Principal Issues: Contractor using percentage of completion method to report income changes to completed contract method in the following year. Can they use subsection 248(28) to avoid reporting the amount of income previously reported under the percentage of completion method that is being included again under the completed contract basis in the following year?

Position:

Reasons:

21 June 2000 External T.I. 2000-0027545 - Labour-sponsored Funds credit carry-over

Unedited CRA Tags
127.4(6) 127.4(j) 127.4(2)

Principal Issues:

9 May 2000 External T.I. 2000-0017215 - CALU 2000 - Valuation of gifts of Art

Unedited CRA Tags
118.1

Principal Issues: Donation of artwork

Position: See Document

Reasons: See Document

27 July 1999 External T.I. 2000-0020595 - Translation of 9916225 options + RRSP

Unedited CRA Tags
Reg 4900 7 146 110(1)

Principal Issues:
TRANSLATION OF 9916225
1. Can a stock option, the benefit of which is subject to section 7, be transferred to an RRSP?
2. Does subsection 248(28) apply when a benefit is included in income pursuant to subsection 146(8) and paragraph 56(1)(h) when a benefit had already been included in income pursuant to paragraph 7(1)(c)?

Position:
1. Yes. Inasmuch as the property which the option gives the right to acquire is a qualified investment during the period of ownership by the RRSP trust.
2. No.

Reasons:
1. Text of the Regulations and discussion with Finance
2. There is no double taxation of the same source of income.

Technical Interpretation - Internal

6 July 2000 Internal T.I. 2000-0026587 - COURT AWARDED LEGAL FEES; CHILD SUPPORT

Unedited CRA Tags
9 18(1)a) 18(1)c) 56.1(4)

Principal Issues:

31 May 2000 Internal T.I. 2000-0015977 - UNEARNED PENSION SURPLUS

Unedited CRA Tags
181.3(3)(c) PART 1.3

Principal Issues: Whether a financial institution's pension surplus is included in its capital for Large Corporations Tax purposes.

Position: It is included in capital as any other surplus pursuant to paragraph 181.3(3)(c)(ii).

Reasons: The concept of "surplus" is not defined in the Act; however, we have considered it on a few occasions and have adopted a broad view as to its meaning. Essentially an amount that reflects the excess of a corporation's assets over liabilities would generally be viewed as surplus. A prepaid pension asset would seem to fit squarely within that concept.