Income Tax Severed Letters - 2003-09-19

Ruling

2003 Ruling 2002-0180863 - Bump Transaction

Unedited CRA Tags
88(1)(c) 206

Principal Issues:
1. Whether Amalco, Amalco II and Amalco III are entitled to the "bump" under paragraph 88(1)(c)?
2. XXXXXXXXXX
3. XXXXXXXXXX
4. XXXXXXXXXX

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

Reasons:
1. Meets the requirements of the law.
2. XXXXXXXXXX
3. XXXXXXXXXX
4. XXXXXXXXXX

2003 Ruling 2003-0011783 - Butterfly

Unedited CRA Tags
55(3)(b) 107(2)

Principal Issues: A gross-asset butterfly reorganization

Position: Acceptable.

Reasons: Meets the requirements of the law.

Technical Interpretation - External

15 September 2003 External T.I. 2003-0028075 F - Definition of "Specified Class" Sub 256(1.1)

Unedited CRA Tags
256(1.1)(b)
Summary Under
Tax Topics - Income Tax Act - Section 256 - Subsection 256(1.1) - Paragraph 256(1.1)(b)
taking away of voting rights by shareholders agreement did not satisfy s. 256(1.1)(b)

Principal Issues: Whether voting shares that are subject to a shareholders' agreement restricting the exercise of the voting entitlements would meet the definition of shares of a "specified class" in 256(1.1).

Position: No.

Reasons: The issued shares are voting.

5 September 2003 External T.I. 2003-0020015 - Interest in a UK Partnership & Rental Income

Unedited CRA Tags
UK Treaty

Principal Issues: (1) Taxation of an interest in a UK partnership, and (2) Taxation of rental income from, and capital gain on the disposition of, a house located in Wales.

Position: See memo.

Reasons: See memo.

3 September 2003 External T.I. 2003-0025105 - FTC - Qualifying Income 111(1)(a)

Unedited CRA Tags
126(2)(a)

Principal Issues: Does the utilization of a carried forward non-capital loss reduce a taxpayer's qualifying income as defined in subsection 126(9)?

Position: No

Reasons: The "qualifying income" defined in subsection 126(9) refers to the income as opposed to taxable income. The carried forward losses are deductible from the taxable income (paragraph 111(1)(a)). Consequently, the foreign business income that must be considered in the calculation of the FTC is not reduced by carried forward non-capital losses.

29 August 2003 External T.I. 2003-0002855 - Article 13(5) German Treaty

Unedited CRA Tags
248(1)

Position: Yes

Technical Interpretation - Internal

16 September 2003 Internal T.I. 2003-0023957 F - Droits et biens crédit personne mariée

Unedited CRA Tags
70(2) 118(1)a)
Summary Under
Tax Topics - Income Tax Act - Section 118 - Subsection 118(1) - Paragraph 118(1)(a)
income of deceased from rights or things (included in separate return) is excluded from income for s. 118(1)(a) purposes
Summary Under
Tax Topics - Income Tax Act - Section 70 - Subsection 70(2)
deemed separate nature of person for rights and things return

Principales Questions:
Les revenus de droits ou biens, inclus dans une déclaration distincte d'un conjoint décédé en vertu du paragraphe 70(2) de la Loi, entrent-ils dans le calcul du revenu du décédé dans l'année d'imposition de son décès, pour déterminer quel montant sa conjointe peut réclamer à titre de crédit de personne mariée ou vivant en union de fait prévu à l'alinéa 118(1)a) de la Loi?

Position Adoptée:
Non.

15 September 2003 Internal T.I. 2003-0013357 F - ALLOCATION RECUE PAR UN BENEVOLE

Unedited CRA Tags
6(1)b)(vii.1) 9(1)
Summary Under
Tax Topics - Income Tax Act - Section 5 - Subsection 5(1)
volunteer driver was not an employee
Summary Under
Tax Topics - Income Tax Act - Section 3 - Paragraph 3(a) - Business Source/Reasonable Expectation of Profit
volunteer driver with high activity level likely was engaged in a business

Principales Questions:
Est-ce que les allocations reçues par un contribuable qui agit comme chauffeur à titre bénévole pour deux organismes sont imposables ?

Position Adoptée:
Question de fait, dans la présente situation possiblement imposable.

15 September 2003 Internal T.I. 2003-0037957 - TAXATION OF INDIAN EMPLOYMENT

Unedited CRA Tags
81(1)(a)

Principal Issues: Was an Indian's employment income taxable?

Position: Question of Fact

Reasons:
General information provided. Very few details were provided with which to make a determination. We would have to assume that the individual is a status Indian since there is no confirmation of this fact. The memo indicates that the taxpayer does not live on reserve, that her employer was not resident on reserve and that approximately 30% of her duties were performed on reserve. The Proration Rule appears to apply to exempt 30% of her income.