Income Tax Severed Letters - 2003-10-03

Principal Issues: Whether the income earned by an individual, as a trustee of a mutual fund trust, is income from an office for purposes of subsection 5(1) of the Act.

Position: Yes.

Reasons: Definition of "office" in subsection 248(1) of the Act.

Principal Issues: Whether the CCRA's administrative position with respect to shareholder/manager bonuses applies in the situation where the source of income for the bonus is partnership income.

Position: Question of fact.

Reasons: A review of each specific situation would determine whether the criteria outlined in ITTN #22 are satisfied.

Principal Issues: Tax implications of wrongful dismissal awards

Position: General comments given explaining our policy.

Reasons: A specific situation was not presented. Tax implications depend upon whether damages can be characterized as a retiring allowance, or salary; and whether any portion of damages relates to a human rights violation. Post-judgment interest would be taxed as interest income. Effective for 2004, pre-judgment interest would likewise be considered interest. Withholding is required on salary, and retiring allowance. No withholding is required on interest.

Principal Issues:
Can an employee deduct a portion of the standby charge as an employment expense?

Position TAKEN:
No.

Reasons:
The standby charge is not an amount expended by the taxpayer in the year in respect of motor vehicle expenses incurred for travelling in the course of the office or employment.

Principal Issues:
1) Can an individual living in a retirement home make a claim for attendant care expenses in respect of amounts paid to the retirement home?
2) What type of expenses may be considered attendant care service when a basic monthly rent is paid to a retirement home?

Position: 1) Yes 2) General comments

Reasons:
1) Provided the resident meets the requirements of subsection 118.3(1) of the Act (disability) and provided the resident can establish that an amount, in addition to the amount paid as rent, is paid as remuneration for attendant care.
2) Depending on the situation, such tasks could include meal preparation, housekeeping, laundry services, transportation and personal services such as banking and shopping. However, fees paid for identifiable personal expenses, such as hairdresser fees, would not qualify.

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

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

PRINCIPALE QUESTION : Est-ce que les contrats de rente décrits dans les exemples constituent des placements admissibles pour l'application de l'alinéa i) de la définition de " placement admissible " à l'article 204 de la Loi?

Position Adoptée:
Non, les intérêts sont inclus annuellement en appliquant les paragraphes 12(3), 12(4) ainsi que l'alinéa 12(1)c) de la Loi.
RAISON POUR POSITION ADOPTÉE:
Analyse législative et position antérieure.

Position Adoptée: 2 000 $ pour chaque année de service avant 1996 auprès de l'employeur actuel, pour chaque année rachetée et comprend chaque année auprès d'un ancien employeur lié à l'employeur actuel même si l'employé ne rachète qu'une portion des années auprès dudit employeur. 1 500 $ pour chaque année de service avant 1989 non acquise à l'employé.

Principales Questions:
Le contribuable aura-t-il droit au crédit d'impôt pour don?