Income Tax Severed Letters - 2001-02-02

Miscellaneous

25 January 2001 Miscellaneous 2000-004956A - RETROACTIVE LUMP-SUM PAYMENT

Unedited CRA Tags
110.2

Principal Issues:
Is a retiring allowance payment made to a former employee a "qualifying amount" for the purposes of subsection 110.2(1) ITA?

Position:
Depends on the facts.

Reasons:
To benefit from the rules in new section 110.2 ITA, an individual must have received a "qualifying amount" during a taxation year. In addition, a "specified portion" must relate to an "eligible taxation year" during which the individual's eligibility to receive the portion existed. The payment of a retiring allowance does not necessarily satisfy these requirements. To qualify, it must represent a payment on account of or in lieu of damages paid pursuant to an order or judgment of a competent tribunal, an arbitration award or a contract by which the payor and the individual terminate a legal proceeding (i.e. in settlement of a lawsuit).

30 November 1999 Miscellaneous 9M19160 - QUE. REGION TECH. ADVISORS CONF.

Unedited CRA Tags
2

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

1999 ROUND TABLE - ANNUAL CONFERENCE OF QUEBEC REGION TECHNICAL ADVISERS

Question 1

Application of Subsection 13(4) - Expropriation

Opco's land and plant were expropriated. Opco rebuilt factory B at another location.

Ruling

2000 Ruling 2000-0006303 F - Transfert de biens

Unedited CRA Tags
55(2) 55(4) 245(2)

Principal Issues: Est-ce que le paragraphe 55(4) est applicable?

Position: Non

Reasons: Selon les informations fournies par le représentant, aucun des principaux motifs du contrôle par le père des nouvelles sociétés est de faire en sorte que les personnes soient liées. De plus, notre Direction a déjà accepté de donner des décisions dans des situations similaires.

2000 Ruling 2000-0033353 - Vertical Short-Form Amalgamation

Unedited CRA Tags
85(1) 87(1) 87(1.1) 87(4)

Principal Issues: Transfer of all the shares of a corporation held by an individual to a wholly-owned holding company and the subsequent vertical short-form amalgamation of the holding company and its wholly-owned subsidiary corporations.

Position: This is a standard vertical short-form amalgamation.

Reasons: See issue sheet.

2000 Ruling 2000-0036333 - PROPOSED TRANS. AFFECTED BY TAX-EXEMPT STATUS

Unedited CRA Tags
149(1)(l)

Principal Issues: Whether the proposed transactions will, in and of themselves, cause the Association to lose its exempt status under paragraph 149(1)(l) of the Act.

Position: No.

Reasons: All indications are that transactions are not motivated by profit.

2000 Ruling 2000-0040143 - Butterfly reorganization

Unedited CRA Tags
55(3)(b)

Principal Issues: Option granted by Transferee Corporation to its parent, a tax exempt entity, to acquire property of Transferee Corporation

Position: Depending on the terms of the option it could be a non-commercial option and section 69 would apply when option is exercised

Reasons: The granting of option would allow for future gains to be passed on to the tax exempt and any future losses would remain with the taxable entity

2000 Ruling 2000-0053073 - Utilization of losses - "That" business

Unedited CRA Tags
111(5)

Principal Issues: Whether XXXXXXXXXX are similar properties for purposes of subsection 111(5) of the Act.

Position: Yes.

Reasons: Meaning of "Similar", past interpretations. Both XXXXXXXXXX are part of the business of XXXXXXXXXX .

2000 Ruling 2000-0057893 - DEFERRED BONUS PLAN SDA

Unedited CRA Tags
REG 6801(d)

Principal Issues: Will the proposed deferred bonus plan be excluded from the salary deferral arrangement provisions of the Act?

Position: Yes

Reasons: Plan satisfies 6801(d) of the Regulations so the plan will be exempted from the salary deferral arrangement provisions of the Act.

2000 Ruling 2000-0060643 - STRUCTURED SETTLEMENTS

Unedited CRA Tags
56(1)(d) 12.2

Principal Issues:
An individual's (the Claimant) father, who XXXXXXXXXX was dependant on for support, was killed in an auto accident. The Claimant along with XXXXXXXXXX Guardian commenced legal action against the insurance companies. Pursuant to an out of court settlement reflected in a draft judgement, the defendant insurer will agree to make periodic payments for XXXXXXXXXX years and provide 2 lump sum payments one when the Claimant is XXXXXXXXXX and the other when XXXXXXXXXX turns XXXXXXXXXX .

1999 Ruling 9908303 - REPLACEMENT PROPERTY

Unedited CRA Tags
44

Principal Issues: Whether timber land being exchanged would qualify as former business property and replacement property for purposes of section 44 of the Act.

Position: Yes.

Reasons: The property being disposed of and the property being acquired are timber lands used in the same business of the taxpayer.

Technical Interpretation - External

1 February 2001 External T.I. 2000-0041535 F - Actionnaire rattaché / droit de 1er refus

Unedited CRA Tags
4901(2.2) 2900(12)(a) 251(5)(b)

Principales Questions:
Pour les fins du paragraphe 4901(2.2) du Règlement, faut-il tenir compte des droits d'acquérir des actions en vertu de certaines clauses d'une convention d'actionnaire ?

Position Adoptée:.
Cela dépend des clauses de la convention.

31 January 2001 External T.I. 2001-0066415 - CLERGY RESIDENCE

Unedited CRA Tags
8(1)(c)

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

Does a specialized minister for family and children within the XXXXXXXXXX church qualify for the 8(1)(c) deduction?

Position TAKEN
No

31 January 2001 External T.I. 2000-0050465 F - TRANSFERT D'UN BIEN AGRICOLE

Unedited CRA Tags
73(3)

Principales Questions:
Un contribuable loue son fonds de terre à un tiers qui y exploite une entreprise agricole (et ce depuis trois ans). Le contribuable a déjà exploité (il y a trois ans) ce fonds de terre pendant près de 27 ans dans le cadre d'une ferme laitière. Il désire transférer ce fonds de terre à son enfant. Peut-il utiliser les dispositions du paragraphe 73(3) de la Loi?

Position Adoptée:
Question de fait.

31 January 2001 External T.I. 2000-0047275 - TUITION TAX CREDIT-ENGLISH LANG. TRAINING

Unedited CRA Tags
118.5(1)

Principal Issues: Whether English second-language training qualifies for the tuition tax credit.

Position: Likely no.

Reasons: It is our view that tuition paid for English second language training would not qualify for the tuition tax credit because English is generally considered a lifeskill and does not necessarily improve the student's occupational skills.

29 January 2001 External T.I. 2000-0049425 - TAXABLE BENEFIT-MILEAGE ALLOWANCE

Unedited CRA Tags
6(1)(a)

Principal Issues: Whether a mileage allowance or a taxi expense paid by an employer to an employee would be considered a taxable benefit when the employee is called-back for emergency cases after normal business hours?

Position: Yes

Reasons: Travel between home and the work place is personal in nature. This is the case for regularly scheduled trips or an unexpected trip after normal business hours, except where the employee is obliged to proceed directly from home to a point of call other than the employer's place of business to which the employee reports regularly or returns home from such a point.

29 January 2001 External T.I. 2000-0063185 - Interest deductibility

Unedited CRA Tags
20(1)(c) 18(2)

Principal Issues:
Deductibility of interest on borrowed money used to purchase common shares.

29 January 2001 External T.I. 2001-0065315 - STANDBY CHARGE

Unedited CRA Tags
6(2)

Principal Issues: Does the expression "total available days" in subsection 6(2) of the Income Tax Act include all the days in the year an employee has possession of an employer-provided automobile rather than just the specified period the employee is authorized to use the automobile for personal use.

Position: The expression would include each day of the year the employee has possession of the automobile.

Reasons: Position set out in paragraph 11 of IT-63R5 which states, in part, "The total number of days includes the first day during which the automobile is so made available and each day thereafter until such time as the employee is required by the employer to return the automobile and the control over its use to the employer or a person related to the employer. An automobile is available to the employee if it is used by the employee all day or for any part of the day or even if the automobile sits unused in the employee's garage or on the employee's driveway or parking spot."

26 January 2001 External T.I. 2000-0061515 - ESTATE; SETTLEMENT

Unedited CRA Tags
43

Principal Issues: whether payment from estate to siblings is taxable

Position: no

Reasons: the deceased is responsible for the tax on the value of the RRIF

26 January 2001 External T.I. 2000-0021175 - Variation Multiple Life Insurance Policy

Unedited CRA Tags
148(9) 148(10)(d)

Principal Issues: A hypothetical universal life policy providing for multi-life coverage specifically provides for the addition of life insureds. The policy is owned by an individual, H, and provides for individual coverage of $100,000 on each of H and his wife, W. If the policy is amended to add $100,000 of coverage on a joint last to die basis and to drop the individual coverages, is there a disposition for the purposes of section 148 of the Act? Does paragraph 148(10)(d) apply by virtue of the provision providing for the addition of lives? Would it be relevant if the policy contained a provision permitting the substitution of lives insured?

Position: It is a question of fact whether or not changes to a particular policy are sufficiently material to cause a surrender of an interest in that policy and the acquisition of an interest in a new policy. This determination can only be made on a case by case basis, having regard to all the provisions of the policy. In this case, it would not be relevant whether or not the policy contained a provision allowing the addition of lives insured or the substitution of lives insured.

Reasons: The CCRA's view is that a change in the lives insured under a policy would be a sufficiently material change to cause a surrender of an interest in that policy and the acquisition of an interest in a new policy. However, the CCRA considers joint last to die coverage to be insurance in respect of each of the lives subject to the joint coverage. Thus, the addition of joint last to die coverage to a policy providing for multi-life coverage on the same individuals would not constitute the addition of a life insured. For this reason, in this case a provision in the policy providing for the addition or for the substitution of lives would not be relevant in assessing whether or not the change was sufficiently material to cause a disposition for the purposes of section 148.

26 January 2001 External T.I. 2000-0060725 - PARTNERSHIP ROLLOVER

Unedited CRA Tags
98(5) 102(2)

Principal Issues: whether 98(5) can apply where one of partners is a partnership

Position: it depends on which partner continues to carry on the business. it will not apply is partner that is a partnership carries on the business

Reasons: 102(2) is a limited deeming provision. It does not make a partnership a sole proprietor

25 January 2001 External T.I. 1999-0013485 - Meaning of the Word Distributed

Unedited CRA Tags
107(2) 107(5)

Principal Issues: does "distributed" referred to in subsection 107(2) & 107(5) require physical distribution or is asset encumberment sufficient?

Position: the words "distributed by the trust" in 107(2) & 107(5) imply some positive action must be taken by the trustees (i.e. physical distribution)

Reasons:

25 January 2001 External T.I. 2000-0049565 F - PAIEMENTS FORFAITAIRES RETROACTIFS

Unedited CRA Tags
110.2

Principales Questions:
Est-ce qu'une allocation de retraite payée à un ancien employé peut être considérée un montant admissible aux fins de l'article 110.2 LIR ?

Position Adoptée:
Question de fait.

25 January 2001 External T.I. 2001-0065405 - low interest benefits

Unedited CRA Tags
80.4(1)

Principal Issues: Is there a taxable benefit where an employee pays interest at a higher rate than the Government prescribed rate at the time a mortgage is taken out?

Position: Generally, no.

Reasons: CCRA's position on section 80.4 is set out in IT-421R2

24 January 2001 External T.I. 2000-0028895 F - Contingent de versement/perte

Unedited CRA Tags
149.1(1)

Principales Questions: Quel est l'effet de la perte de valeur d'un bien sur le calcul du contingent des versements d'une fondation de bienfaisance ?

Position Adoptée: Aucune

23 January 2001 External T.I. 2001-0065195 - Retiring Allowance Eligible for Rollover

Unedited CRA Tags
56(1)(a)(ii) 60(j.1) 60(o.1)(i)(B)

Principal Issues: Is retiring allowance eligible for rollover under 60(j.1)?

Position: Question of fact

Reasons: Completed transactions are handled by the TSO.

23 January 2001 External T.I. 2000-0045445 F - DETTE D'UN ACTIONNAIRE - FIDUCIE

Unedited CRA Tags
15(2) 15(25) 251(1)

Principales Questions:
Est-ce qu'un prêt consenti par une société en faveur d'une fiducie, dont elle est l'auteur et l'unique bénéficiaire, peut être assujetti au paragraphe 15(2) LIR ?

Position Adoptée:
Oui.

22 January 2001 External T.I. 2000-0012025 F - cotisations sociales

Unedited CRA Tags
126(7)

Principales Questions:
1. Est-ce que les cotisations sociales constituent des impôts sur le revenu ne provenant pas d'une entreprise?
2. Est-ce que l'accord de sécurité sociale est applicable?

Position Adoptée:
1. Oui
2. Non

22 January 2001 External T.I. 2000-0042985 - NISA

Unedited CRA Tags
70(12)

Principal Issues:
1. Does ITA 70(12), which deems the value of NISA to be nil, also apply to all patronage refund reserve accounts ("PRRA")?
2. Are all PPRAs in co-operatives considered property used in the business of farming?

Position:
1. No
2. Depends

Reasons:
1. The wording of ITA 70(12) only deems the value of NISA to be nil.
2. Question of fact.

19 January 2001 External T.I. 2000-0058405 - STOCK OPTIONS AND NON-RESIDENT

Unedited CRA Tags
7(1)

Principal Issues: Does a non-resident individual have to include any stock option benefits in his Canadian income where the options were granted by a U.K. employer in respect of the individual's employment in the U.K.?

Position: No.

Reasons: We have generally taken the position that the stock option benefit relates to the period when the options are granted and not when they vest.

19 January 2001 External T.I. 2000-0056155 - DPSP, group annuity contract

Unedited CRA Tags
4900(3)

Principal Issues: Can a group annuity contract satisfy 4900(3) of the Regulations?

Position: Yes.

Reasons: The contract satisfies the provision.

18 January 2001 External T.I. 2000-0061635 - SOURCE DEDUCTIONS

Unedited CRA Tags
153(1)

Principal Issues: What is the exposure to the failure to withhold and remit penalties to a third party payroll service bureau?

Position: Depends on the facts of the particular situation. However, likely no exposure.

Reasons: The payroll in the contemplated situation is actually being paid by the employer.

17 January 2001 External T.I. 2000-0041375 F - REMBOURSEMENT DE PRIME/ENFANT INFIRME

Unedited CRA Tags
146(8.8) 146(8.9) 60L)

Principales Questions: Un enfant majeur atteint d'une infirmité mentale et qui reçoit l'assistance sociale est-il financièrement à la charge du rentier décédé aux fins du " remboursement de primes "

Position Adoptée: Question de fait

17 January 2001 External T.I. 2000-0058395 - Transfers from RRSP to RRIF draft leg

Unedited CRA Tags
248(1) 107.4 206(4)

Principal Issues: What is our position on transfers from RRSPs to RRIFs given the June 5, 2000 draft legislation?

Position: Referred to IRPPD

Reasons: They are responsible for assessments under the provisions.

17 January 2001 External T.I. 2000-0054005 - GRAPE-GROWING&WINE MAKING(WHETHER 2 BUS.)

Unedited CRA Tags
10(1)

Principal Issues: Whether grape-growing and wine-making separate businesses. If separate businesses, how does wine-maker value inventory of grapes obtained from the grape-growing business.

Position: There is likely only one business.

Reasons: Paragraph 3(c) of IT-206R indicates that where one operation exists primarily to supply the other, the two operations likely should be regarded as one business, even if a small amount of goods are sold elsewhere.

17 January 2001 External T.I. 2000-0054805 - MEDICAL EXPENSE TAX CREDIT

Unedited CRA Tags
118.2(2)

Principal Issues: The spouse of an individual ("Partner B") is physically unable to carry or conceive a child. So that they may have a child, a medical practitioner has prescribed a number of medical procedures in respect of a surrogate mother. The surrogate mother is not a dependant of Partner B for the purposes of subsection 118(6) of the Act. Can Partner B treat the medical expenses as being eligible for the medical expense tax credit by virtue of paragraph 118.2(2)(o) of the Act?

Position: No

Reasons: Paragraph 118.2(2)(o) of the Income Tax Act (the "Act") refers to laboratory, radiological or other diagnostic procedures or services ... for the patient (i.e., a dependant) as prescribed by a medical practitioner."

17 January 2001 External T.I. 2000-0060755 - MEDICAL EXPENSES

Unedited CRA Tags
118.2(2)(m)

Principal Issues: An individual has had three operations as a result of cancer. In March of 2000, he was amputated at the torso and now relies on crutches for movement. As part of his physiotherapy program, he purchased a "hand-cycle" which is a special bicycle that is pedalled by hand instead of by foot. The hand-cycle will be used to strengthen the upper part of his body so he will be capable of manoeuvring his crutches. The issue is whether the cost of the hand-cycle qualifies for the medical expense tax credit.

Position: No

Reasons: It is not described within paragraph 118.2(2)(m) of the Income Tax Act and section 5700 of the Income Tax Regulations (or any other provision within subsection 118.2(2) of the Act).

16 January 2001 External T.I. 2000-0057695 - PERSONAL USE OF AUTOMOBILE

Unedited CRA Tags
6(1)(e)

Principal Issues: Whether travel from home to office is personal where employee has to travel out of office during the day, or stops at a point of call, while going to or from work.

Position: Travelling to or from regular workplace is personal notwithstanding that employee must use car during workday.

Reasons: Consistent with earlier opinions

16 January 2001 External T.I. 2000-0009685 F - avantage - usage par l'actionnaire

Unedited CRA Tags
15(1)

Principales Questions:
Y a t-il un avantage conféré par une société à son unique actionnaire lorsque la société acquiert comme unique actif, un hélicoptère, uniquement aux fins de l'utilisation personnelle de l'actionnaire et que celui-ci finance personnellement le coût d'acquisition de l'hélicoptère et assume toutes les autres dépenses relatives à l'hélicoptère.
Would a benefit considered to be conferred on a shareholder by its corporation where the corporation has acquired as its only asset, an helicopter, for purposes of the exclusive personal use of the shareholder who finances the acquisition of, and assumes all other expenses related to, the helicopter?

Position Adoptée:
Généralement, il n'y aurait pas d'avantage en vertu du paragraphe 15(1) dans une telle situation.
In this case, generally, there would be no benefit under subsection 15(1).

16 January 2001 External T.I. 2000-0039415 - CHILD SUPPORT-RETROACTIVE PROV.

Unedited CRA Tags
56.1(3) 60.1(3)

Principal Issues:

16 January 2001 External T.I. 2000-0058255 - Payment before death, received after death

Unedited CRA Tags
248(7)(a)

Principal Issues: Will amounts paid by an RPP administrator to a member and the member's RRSP three days prior to the member's death be "rights or things" or taxable in the deceased's estate because the payments were received after the member's death?

Position: No.

Reasons: Paragraph 248(7)(a) applies and the payments are deemed to be received at the time they are mailed by the RPP administrator.

16 January 2001 External T.I. 2000-0039405 - RELOCATION LOAN

Unedited CRA Tags
62 110(1)(j)

Principal Issues:
1. Does a $25,000 loan from a Canadian employer to a Canadian moving back to Canada from another country qualify as a "home relocation loan"?
2. Do the costs of moving back to Canada qualify for income deduction as moving expenses?
3. If prior to returning to Canada the individual owned a principal residence in the foreign country, can the individual use the Home Buyers' Plan to finance the purchase of a residence in Canada?

Position:
1. No
2. Depends
3. Depends

Reasons:
1. Pursuant to the definition of "home relocation loan" in ITA 248(1), the relocation must be within Canada, a condition not met by the taxpayer.
2. Moving expense to relocate to Canada from a foreign country are generally not deductible under ITA 62, except that a taxpayer who is absent from Canada but resident in Canada for tax purposes may be entitled to claim such relocation costs, if the other conditions for claiming moving expenses are otherwise met. See the definition of "eligible relocation" in ITA 248(1).
3. A taxpayer may not use the Home Buyers' Plan if the taxpayer owns a owner-occupied home, whether in or outside Canada, during the period beginning January 1 on Year 1 and ending 31 days before the RRSP withdrawal in Year 5. See para. (e) of the definition of "regular eligible amount" in ITA 146.01(1) and special rules for owner-occupied home in ITA 146.01(2)(a.1).

15 January 2001 External T.I. 2000-0058885 - Taxation of Canadian Resident US Citizen

Unedited CRA Tags
Art XIV Art XXIX Art XXIV

Principal Issues: Taxation of Canadian resident/U.S. citizen.

Position: Please see letter.

Reasons:

15 January 2001 External T.I. 2000-0032705 F - COLUMBARIUM ET OEUVRE DE CHARITE

Unedited CRA Tags
149.1(2)

Principales Questions: Une œuvre de charité peut-elle voir son enregistrement révoqué suite à sa participation dans une société par actions qui exploitera un mausolée columbarium ?

Position Adoptée: Question de fait

15 January 2001 External T.I. 2000-0033765 F - DEDUCTION DES INTERETS/RACHATS D'ACTIONS

Unedited CRA Tags
20(1)(c)

Principales Questions: Quelle est la position de l'Agence sur la déductibilité des intérêts sur l'argent emprunté pour racheter des actions ou réduire le capital?

Position Adoptée: On considère les bénéfices accumulés et le capital déclaré des actions.

Technical Interpretation - Internal

23 January 2001 Internal T.I. 2000-0062067 - RCA Loans to Beneficiaries

Unedited CRA Tags
56(1)(x)

Principal Issues: Can an RCA loan property to the beneficiary directly or through an intermediary person?

Position: No.

Reasons: Paragraph 56(1)(x) applies to any payments from an RCA to the beneficiary that can reasonably be considered to have been received in respect of an office or employment.

23 January 2001 Internal T.I. 2000-0062487 - CORP. NOT LICENSED TO SELL MUTUAL FUNDS

Unedited CRA Tags
56(4)

Principal Issues: Whether a corporation which is not licensed to sell mutual funds may report commissions on sales of mutual funds by an employee who is a controlling shareholder.

Position: No.

Reasons: As stated in paragraph 2 of IT-189R2, if the provincial law or regulatory body for a particular profession precludes the practice of the profession by a corporation, income derived from the profession will normally be considered to be earned by the individual who rendered such professional services and not by a corporation. Thus, subsection 56(4) will apply to tax the commissions on the sale of mutual funds in the hands of the employee.

16 January 2001 Internal T.I. 2000-0056307 - MOTOR VEHICLE STANDBY BENEFITS

Unedited CRA Tags
6(1)(e)

Principal Issues: Whether the use of an employer-provided automobile is personal in different situations such as travel between home and an airport; travel to competitor or another workplace of the employer on the way to work or home. What constitutes a regular workplace.

Position: Question of fact. Travel from home to regular workplace is personal. Primary purpose of trip must be considered for work related stop on way home or regular workplace.

Reasons: Consistent with other positions taken.

January 16, 2001

15 January 2001 Internal T.I. 2000-0034737 - mun. officers expense allowance

Unedited CRA Tags
81(3)

Principal Issues:

1. Is the XXXXXXXXXX regarded as an incorporated municipality or a body similar to that of a municipal utilities board, commission or corporation for purposes of subsection 81(3) of the Act?
2. Is the XXXXXXXXXX eligible to provide a municipal officers' expense allowance under subsection 81(3) of the Act?

Position TAKEN:

1. Yes.
2. Yes.

Reasons:

8 January 2001 Internal T.I. 2000-0011247 - EXEMPT ALLOW.-MUNICIPALITIES

Unedited CRA Tags
81(3)

Principal Issues: Paragraph 81(3)(b) of the Act refers to an "officer of a municipal utilities board, commission or corporation or any other similar body." With respect to amounts paid by a Yukon First Nation to councillors or members of a board, the issue is whether the Yukon First Nation is a "similar body."

Position: No

Reasons: The wording in paragraph 81(3)(a) of the Act which refers to an officer of an "incorporated municipality" (A Yukon First Nation is not incorporated). Since there is no reference to an unincorporated municipality, this suggests that the phrase "a similar body" was not intended to include such a body.

January 8, 2001

8 January 2001 Internal T.I. 2000-0057237 - CURRENT INCOME TAX PAYABLE AND PART 1.3

Unedited CRA Tags
181

Principal Issues: The treatment of current income taxes payable for purposes of Part I.3 tax.

Position: Current income taxes payable are included for purposes of Part I.3 tax as other indebtedness or as a reserve.

Reasons: The actual amount of current income taxes payable as confirmed by the notice of assessment is an indebtedness in respect of the particular taxation year. Such an indebtedness would be included in the capital for purposes of Part I.3 tax where it remained outstanding at the end of the subsequent taxation year. The excess of the estimated current income taxes payable over the amount actually assessed and unpaid would be included as a provision.

3 January 2001 Internal T.I. 2000-0024247 - Section 6.2 of Income Tax Convention

Unedited CRA Tags
art 20 sec 6.3

Principal Issues: Would section 6.3 of the Income Tax Convention Interpretation Act apply to deem the gain on the disposition of the shares of a Canadian private corporation by a resident of New Zealand to arise in Canada

Position: Yes

Reasons: Interpretation of the law including section 6.3 of the Income Tax Convention Interpretation Act and Article 20 of the Canada-New Zealand Income Tax Convention

2 January 2001 Internal T.I. 2000-0040837 - STANDBY CHARGE EMERGENCY VEHICLES

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

Principal Issues: Whether the exception in paragraph 5 of IT-63R5 will apply to a work location to which an employee reports with some regularity.

Position: No.

Reasons: The fact that an employee has a home location to which he or she reports to more frequently than others does not affect the status of another work location as a regular work location.

18 December 2000 Internal T.I. 2000-0023807 F - IMPORT DE LA PARTIE 1.3 COMPENSATION

Unedited CRA Tags
181.1(2)

Principales Questions: Est-ce que les dettes qui ont été exclues du bilan (compensation) peuvent être incluses dans le calcul du capital pour la partie I.3 ?

Position Adoptée: Non

7 December 2000 Internal T.I. 2000-0023207 F - OPTIONS D'ACHAT D'ACTIONS

Unedited CRA Tags
7(3)(b)

Principales Questions:
Déductibilité des paiements en espèces dans le cadre d'une convention d'options d'achat d'actions

Position Adoptée:
Déductible par l'employeur

1 December 2000 Internal T.I. 2000-0048437 F - PAIEMENTS ANTERIEURS

Unedited CRA Tags
56.1(3) 60.1(3)

Principales Questions:
Les paragraphes 56.1(3) et 60.1(3) de la Loi peuvent-ils s'appliquer dans une situation où des paiements antérieurs ne sont pas mentionnés dans une ordonnance de la cour mais font l'objet d'un document écrit et signé par les deux parties en cause.

Position Adoptée:
Non. Question de fait

22 November 2000 Internal T.I. 2000-0051727 - MEAL, BEVERAGES & ENTERAINMENT

Unedited CRA Tags
67.1(2)

Principal Issues: Is paragraph 67.1(2)(c) or (e) of the Act applicable to meals supplied to a film crew shooting television commercials on location?

Position: No. However, paragraph 67.1(2)(d) may apply.

Reasons: Paragraph 67.1(2)(c) does not apply since the compensation received by the film company for amounts paid or payable in respect of the consumption of food or beverages was not specifically identified in writing to the person paying the compensation. Paragraph 67.1(2)(e) - as it read prior to expenses incurred before February 24, 1998 - does not apply since a location where filming is done for a day or two is not a particular place of business of the film company. Paragraph 67,1(2)(d) would have application to the extent the meals were provided to an employee who was required to report such a taxable benefit pursuant to section 6 of the Act.

November 22, 2000

8 November 2000 Internal T.I. 2000-0025167 F - RECONNAISSANCE DU REVENU D'INTERET

Unedited CRA Tags
12(1)c) 9

Position Adoptée: La personne qui paie l'impôt à la place du contribuable.

3 November 2000 Internal T.I. 2000-0028167 - DAMAGES ON LOSS OF EMPLOYMENT

Unedited CRA Tags
56(1)(a)(ii) 248(1)

Principal Issues:
Whether general damages of $XXXXXXXXXX paid to each XXXXXXXXXX former employees (the "Plaintiffs") of XXXXXXXXXX qualify as a "retiring allowance", as defined in subsection 248(1).

23 October 2000 Internal T.I. 2000-0027477 F - ALLOCATION DE RETRAITE

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

Principales Questions: Un montant versé est-il une allocation de retraite ?

Position Adoptée: Oui

13 October 2000 Internal T.I. 2000-0031107 - Post Martem Estate Planning

Unedited CRA Tags
40(3.6) 251.1 164(6)

Principal Issues: Whether the "stop-loss" rules will apply to deny the capital loss on repurchase of shares?

Position: Yes.

Reasons: Immediately thereafter, the Estate will be affiliated with corporation. However, this situation may be remedied by a court-ordered rectification of the legal documents,

6 October 2000 Internal T.I. 2000-0035277 - DISPOSITION OF SHARES IN CO-OP

Unedited CRA Tags
14(5) 110.6(1) 84(3)

Principal Issues: Whether redemption of shares in co-operative corporation which holds a grazing lease can be considered the disposition of eligible capital property and qualify for the capital gains deduction.

Position: No

Reasons: Shares are excluded from definition of eligible capital expenditure. Share redemption results in deemed dividend per 84(3).

3 October 2000 Internal T.I. 2000-0025237 - Carry forward of foreign tax credit

Unedited CRA Tags
126(2)

Principal Issues: Whether business foreign tax credits could be carried forward despite the fact that the business had a loss.

Position: Yes

Reasons: The law provides for this result.