Income Tax Severed Letters - 2008-01-04


2007 Ruling 2007-0236451R3 - Partnership Reorg-Personal Services Business

Unedited CRA Tags
125(7)("personal services business") 125(7)("specified partnership income") 256(2.1)

Principal Issues: Where a partner of a professional partnership creates a professional corporation through which professional services will be provided to the partnership, will the corporation be eligible for the small business deduction?

Position: Question of fact. Generally, yes, if certain conditions are met.

Reasons: Reading of relevant legislation and consistent with other rulings

Technical Interpretation - External

21 December 2007 External T.I. 2006-0181021E5 - Meaning of disposition

Unedited CRA Tags

Principal Issues: Whether the conversion of a French Société à responsabilité limitée into a French Société par actions simplifiée will result in a disposition of its shares held by a Canadian taxpayer.

Position: Depends on whether the conversion results in a "disposition" within the meaning assigned by subsection 248(1) or within the general meaning of that term.

Reasons: The law

18 December 2007 External T.I. 2007-0250511E5 - Medical Expense- Registered Clinical Counsellor

Unedited CRA Tags

Principal Issues: Whether fees paid to a registered clinical counsellor, in the province of British Columbia, would be eligible for the medical expense tax credit.

Position: Likely not.

Reasons: Payments of fees to a registered clinical counsellor would not qualify as eligible medical expenses unless amounts were paid for "medical services" performed by a medical practitioner authorized to practice as such according to the laws of the jurisdiction in which the service was rendered. Based on a review of the Medical Practitioners Act of British Columbia it is our understanding that registered clinical counsellors are not currently recognized.

Technical Interpretation - Internal

18 December 2007 Internal T.I. 2007-0251291I7 - electricity cost related to an air conditioner

Unedited CRA Tags
118.2 (2)

Principal Issues: Whether the cost of electricity used to operate an air conditioner qualifies as a medical expense for purposes of the medical expense tax credit

Position: No

Reasons: See 9722745 and 2005-0164501I7. We have allowed the cost of electricity used to operate a dialysis machine as a medical expense. The rationale for allowing the cost of electricity and water to operate a dialysis machine is that paragraph 118.2(2)(i) permits expenses "for or in respect of "..." which permits a much broader interpretation. The interpretation that the cost of electricity used to operate a dialysis machine qualifies as a medical expense is based on the fact that "in respect of " includes more than just the purchase cost of the dialysis machine. However, the wording in Regulation 5700(c.3) (which prescribes medical equipment and devices for purposes of paragraph 118.2(2)(m)) regarding air conditioners does not use such broad language and therefore, does not permit electricity used to operate an air conditioner to qualify as a medical expense.