Income Tax Severed Letters - 2001-02-16

Principal Issues:
Can an EPSP be set up for the benefit of the employer's children where the children will only get entitlements under the EPSP if they satisfy certain non-employment related conditions?

Position: Probably not.

Reasons:
The EPSP would have to satisfy subsection 144(1) and we would question whether the arrangement is for the benefit of employees of the business.

Principal Issues: Determine the date of acquisition and the adjusted cost base of a portfolio investment transferred to a Canadian resident beneficiary by a US testamentary trust.

Position: The adjusted cost base of property transferred by a trust to one of its beneficiaries in satisfaction of such beneficiary' capital interest in the trust is to be determined in accordance with subdivisions 107(1) et (2).

Reasons: Subsections 107(1) and (2) and documents E 9629257, E 9824473 and E 9204205.

Principal Issues:
Are meal expenses incurred by Emergency Medical Technicians and Paramedics in carrying out the duties required by their employment deductible?

Position:
Depends on the facts but generally they would not be deductible.

Reasons:
For the purposes of subsection 8(1)(g) of the Act, it cannot be considered that an Emergency Medical Technician and Paramedic is an employee of a person whose principal business was passenger transport, even though they may regularly transport patients in an ambulance. Moreover, subsection 8(4) of the Act provides that meal expenses cannot be deducted pursuant to paragraph 8(1)(h) of the Act in computing income from an office or employment unless it was consumed during a period while the taxpayer was required by the taxpayer's duties to be away, for a period of not less than twelve hours, from the municipality where the employer's establishment to which the taxpayer ordinarily reported for work was located and away from the metropolitan area, if there is one, where it was located.

Principales Questions:
1. Est-ce que des allocations versées à des employés pour des frais de stationnement, sans pièces justificatives, seraient acceptées à titre de dépenses déductibles pour l'employeur ?
2. Quel serait le traitement fiscal de l'allocation pour des frais de stationnement du point de vue de l'employé ?

Position Adoptée:
1. Dans la situation présentée, oui.
2. Il s'agit probablement d'allocations imposables selon l'alinéa 6(1)b) de la Loi

Principal Issues: Taxation of business income, investment income and employment income of a status Indian

Position: Provided only general comments on CCRA position

Reasons: CCRA position

Principal Issues:
1. Are a corporation's gains and losses from trading non-Canadian securities on a daily, monthly or bimonthly basis accorded the income treatment or the capital treatment?
2. Deduction of operating expenses

Position:
1. Question of fact; but more than likely the gains/losses are on income account.
2. Expenses must be claimed against the income source in respect of which they are incurred

Reasons:
1. IT- 479R
2. T4012, T2 Corporation income tax guide; T4037, Capital gains guide.

Principal Issues:
Is there a requirement to pay the minimum amount out of a RRIF after the death of the annuitant?

Position: No.

Reasons:
There is no requirement to pay the minimum amount after the death of the annuitant. However, any transfer of any amounts received by beneficiaries to the beneficiaries RRSPs or RRIFs must be reduced by the minimum amount that would have otherwise been payable in the year of the transfer.

Principal Issues:
Will a GIC issued by a chartered Canadian bank and denominated in a foreign currency be a foreign property for purposes of Part XI of the Act?

Position: No.

Reasons:
The residency of the issuer of the GIC will determine whether a GIC is Canadian or foreign property. The currency denomination of the GIC will not result in a property being Canadian or foreign property.

Principal Issues:
Where a single trust is used for all participants in a deferred salary leave plan under paragraph 6801(a) of the Regulations, can the trust include the payments to the employees that are on leave in the year in the distributions that are required under clause 6801(a)(iv)(A) of the Regulations?

Position: No.

Reasons:
Under clause 6801(a)(iv)(A), the trust has to provide that the income earned for the benefit of the employee has to be paid to the employee. This condition would not be satisfied if the trust pays the income to another employee.

Principales Questions:
Un résident canadien doit-il effectuer des retenues d'impôt sur les honoraires de gestion qu'il verse à des contractuels américains relativement à des services rendus aux États-Unis?

Position Adoptée: non

Principales Questions: Est-ce que le paragraphe 84.1(1) de la Loi s'applique dans la présente situation? / Does subsection 84.1(1) of the Act apply in the particular situation?

Position Adoptée: Oui. / Yes.

Principales Questions: Est-ce que les paiements effectués en l'espèce sont sujets à l'impôt de la partie XIII compte tenu des dispositions de la Convention fiscale Canada - France? / Whether the payments, in the particular situation, are subject to Part XIII tax, given the dispositions of the Canada - France Tax Convention.

Position Adoptée: Non. / No.

Principal Issues:
Transfert de crédit d'impôt pour dons de biens culturels entre conjoints.

Principal Issues: Nature of receipt for settling lawsuit re non payment of royalties.

Position: Question of fact

Reasons: Question of fact

Principal Issues: How transactions that are the subject of a ruling are audited

Position: See response

Reasons: See response