Income Tax Severed Letters - 2004-08-27

Ruling

2004 Ruling 2003-0046771R3 - split-up butterfly

Unedited CRA Tags
55(3)(b)

Principal Issues: standard split-up butterfly

2004 Ruling 2004-0070491R3 - Loss Consolidation

Unedited CRA Tags
20(1)(c) 55(3)(a) 245(2)

Principal Issues: Whether a proposed loss consolidation results in the application of subsection 245(2).

Position: No.

Reasons: It does not result in a misuse of a provision of the Act or an abuse of the Act as a whole.

Technical Interpretation - External

27 August 2004 External T.I. 2004-0071341E5 - Principal Residence Exemp-Non-resident

Unedited CRA Tags
54 54.1 45(2)

Principal Issues: Whether a taxpayer can claim the principal residence exemption for taxation years throughout which the taxpayer was a non-resident of Canada?

Position: No.

Reasons: Pursuant to paragraph 40(2)(b) the use of the principal residence exemption by a taxpayer is limited by reference to the number of taxation years ending after the acquisition date during which the taxpayer was resident in Canada.

23 August 2004 External T.I. 2002-0130701E5 - Retirement Compensation A

Unedited CRA Tags
248(1)

Principal Issues: Will a plan or arrangement that may make a post-employment payment be an RCA?

Position: Question of fact.

Reasons: The wording of the definition of an RCA in subsection 248(1) of the Act requires that the plan or arrangement be funded in connection with benefits that are to be, or may be, received or enjoyed on, after or in contemplation of a substantial change in services rendered, retirement or loss of employment. The unique facts in each situation must be considered to make a determination

23 July 2004 External T.I. 2004-0075821E5 - Health Care benefits to former employees

Unedited CRA Tags
6(1)(a)(i) 248(1)

Principal Issues: Whether terminated employees are subject to tax on benefits derived from extended health care plan

Position: Not generally subject to tax if benefits from a PHSP-

Reasons: Treated the same as current employees- similar position previously taken

20 July 2004 External T.I. 2004-0076661E5 - Canada Council Grant

Unedited CRA Tags
12(1)(x)

Principal Issues: How to report a grant received from the Canada Council for the Arts, for writing a book?

Position: The amount of the grant should be reported in the year of receipt pursuant to paragraph 12(1)(x) of the Act, subject to an election under subsection 12(2.2) of the Act.

Reasons: Consistent with the provisions of the legislation.

Technical Interpretation - Internal

30 July 2004 Internal T.I. 2004-0072531I7 - Tax shelters - penalties

Unedited CRA Tags
237.1(7.4)

Principal Issues: Whether the balance of a loan outstanding, or a partial repayment, constitutes "consideration" receivable/received for purposes of 237.1(7.4)

Position: No.

Reasons: These amounts are inherent elements of a loan, not amounts given in payment for some other thing.

14 July 2004 Internal T.I. 2004-0072241I7 - Provincial ITC & 12(1)(x)

Unedited CRA Tags
12(1)(x) 9

Principal Issues: 1.application date of tax credit; 2.whether section 9 vs. 12(1)(x) applies

Position: 1. see ITTN 29; 2.in this case section 12(1)(x) is applicable

Reasons: 1. policy carefully formulated in ITTN 29; 2. in keeping with policy in IT273R2- paragraph 17

14 July 2004 Internal T.I. 2004-0083531I7 - Medical expenses - Ontario Health Premium

Unedited CRA Tags
118.2(2)

Principal Issues: Does the payment of the Ontario Health Premium, as introduced in the May 18, 2004 Ontario Budget qualify as a medical expense?

Position: No.

Reasons: The Ontario Health Premium is a tax assessed under the Ontario Income Tax Act.