Income Tax Severed Letters - 2008-08-29

Ruling

2008 Ruling 2008-0268921R3 - Payment of DSUs in Multiple Lump Sum Payments.

Unedited CRA Tags
6801(d)

Principal Issues: Can DSUs be paid out in more than one payment?

Position: Yes

Reasons: The wording in Reg. 6801(d) permits multiple payments, provided the amounts are received by the participant no later than the end of the first calendar year commencing after the end of employment.

2008 Ruling 2008-0276821R3 F - Monétisation: Changements mineurs aux faits

Principales Questions: Est-ce que les changements apportés dans les faits et les opérations projetées remettent en question les décisions rendues dans le document portant le numéro 2007-024646 ?

Position Adoptée: Non.

Raisons: Il s'agit de changements mineurs ne modifiant pas la substance des opérations projetées.

2007 Ruling 2006-0203271R3 - Unfunded Supplemental Pension Plan

Unedited CRA Tags
248(1) 56(1)(a)

Principal Issues: Is the supplemental pension plan an SDA or RCA?

Position: No.

Reasons: The plan is unfunded and is supplemental to the pension to be provided under the employer's RPP. Also, the pension to be paid from the supplemental plan carves out the pension that will be provided from the RPP where the contributions made under the employer's RPP are at the money purchase limit as defined in subsection 147.1(1) of the Act. While funds may be set aside and invested to pay the benefits from the supplemental plan, the funds will remain available to the general creditors of the employer and can be used by the employer for other purposes.

Ministerial Correspondence

20 August 2008 Ministerial Correspondence 2008-0281261M4 - RRSP and RRIF amounts eligible for pension credit

Unedited CRA Tags
118(7) 60.03

Principal Issues: What amounts paid out of an RRSP or a RRIF to a taxpayer who is under 65 are eligible for the pension split?

Position: Only amounts received as a consequence of the death of the taxpayer's spouse or common-law partner.

Reasons: limitation of the provisions

Technical Interpretation - External

25 August 2008 External T.I. 2005-0139191E5 F - Paiement forfaitaire - pension alimentaire

Unedited CRA Tags
56(1)b) 60(1)b) 56.1(4)
Summary Under
Tax Topics - Income Tax Act - Section 60 - Paragraph 60(b)
Tsiaprailis does not affect CRA position that lump-sum settlement of support obligations are not deductible and taxable

Principales Questions: À la lumière de l'arrêt Tsiaprailis de la Cour suprême du Canada, quel est le traitement fiscal d'une somme forfaitaire - se rapportant aux arrérages de pension alimentaire ainsi qu'aux droits futurs du bénéficiaire d'une pension alimentaire - versée afin d'obtenir la libération d'une obligation alimentaire imposée par une ordonnance ou un accord.

Position Adoptée: La position de l'Agence du revenu du Canada demeure inchangée. Le paragraphe 22 du bulletin d'interprétation IT-530R continue à être pertinent.

Raisons: L'arrêt Tsiaprailis ne vient pas confirmer l'application du principe de la substitution en matière de pension alimentaire. De plus, la question de savoir si une somme forfaitaire est versée en remplacement d'une somme qui aurait autrement été déductible pour le payeur et imposable pour le bénéficiaire d'une pension alimentaire ou si elle est versée afin de libérer le payeur de l'obligation de payer une pension alimentaire aux termes d'une ordonnance ou d'un accord en est une de fait.

2005-013919
XXXXXXXXXX François Bordeleau,
Avocat
Le 25 août 2008

21 August 2008 External T.I. 2008-0276131E5 - Payments to employees for travel

Unedited CRA Tags
6(1)(b)(vii); 6(1)(b)(vii.1)

Principal Issues: General questions as to when payments to employees for motor vehicle and other travel expenses may be excluded from income.

Position: General information provided. It is a question of fact depending on the circumstances as to whether the payments may be excluded from income as reimbursements of expenses incurred on behalf of the employer or as allowances specifically exempt under the Act. ..

Reasons: CRA published positions.

21 August 2008 External T.I. 2008-0286051E5 F - Revenu de location

Unedited CRA Tags
3 9
Summary Under
Tax Topics - Income Tax Act - Section 3 - Paragraph 3(a)
where one of the two co-owners of a duplex occupies and pays rent for one of the units, she is a source of income to the other co-owner, but not herself

Principales Questions: De quelle façon deux copropriétaires d'un duplex (50-50) doivent-elles s'attribuer les revenus de location des deux unités du duplex dans le cas où l'une d'entre elles habite le logement d'en haut et paie un loyer relativement à ce logement?

Position Adoptée: Question de faits. Selon les faits établis, l'une inclura dans le calcul de son revenu sa part de profit (ou de perte) provenant de la moitié des revenus de location des unités d'en haut et d'en bas alors que l'autre - celle qui habite le logement d'en haut - devra inclure dans le calcul de son revenu, la moitié du profit (ou de la perte) résultant de la location de l'unité du bas.

Raisons: Pour la locataire du logement du haut, l'ARC est d'avis que le revenu découlant de cette location ne représente pas une source de revenu pour cette dernière. En effet, il s'agit d'une activité personnelle qui n'est pas du tout exploitée de façon commerciale.

XXXXXXXXXX 2008-028605
M. F. Pleau, M. Fisc.
Le 21 août 2008

13 August 2008 External T.I. 2008-0274451E5 - Loss Denial Rules

Unedited CRA Tags
50(1) 40(3.4) 40(3.6) 40(3.3)

Principal Issues: Whether capital losses arising from disposition of shares deemed to have been made under s. 50(1) will be subject to deferral or denial under s. 40(3.4) or 40(3.6)?

Position: No.

Reasons: Dispositions under s. 50(1) specifically carved-out from application of s. 40(3.4). Subsection 50(1) does not deem disposition of shares of a corporation to have been made by the electing taxpayer to the corporation, so s. 40(3.6) is not applicable.

11 August 2008 External T.I. 2008-0287671E5 - cca on equipment Ontario Standard Offer Program

Unedited CRA Tags
class 43.1/43.2 reg 1102 12(1)(x)

Principal Issues: 1. Will excess solar power purchased by Ontario Hydro under their Standard Offer Program be treated as a reduction of utility expense or must it be included in income? 2 .Can CCA be claimed on the cost of solar power equipment incurred for primarily for personal use but where excess power will be purchased by Ontario Hydro?

Position: 1. Although income is realized by reduction of individuals utility bill--it is a taxable income inclusion.
2. Whether CCA can be claimed is a question of fact, -depends on if property was acquired for the purpose of earning income.

Reasons: 1. 12(1)(x) 2. Reg 1102(1)(c) & 1100(25)

8 July 2008 External T.I. 2007-0256561E5 - Requirement to file T5018.

Unedited CRA Tags
238

Principal Issues: Is a corporation required to file an information return pursuant to subsection 238(2) of the Income Tax Regulations where the corporation pays amounts to sub contractors in respect of irrigation installations, landscaping and hydroseeding.

Position: Question of fact, dependent on whether the corporation's business income was primarily derived from construction activities.

Reasons: Legislation.

Conference

18 July 2008 Roundtable, 2008-0272871C6 - Canada-US Income Treaty

Unedited CRA Tags
Art IV(6)

Principal Issues: Whether a US "master limited partnership" that is taxed under the Internal Revenue Code as a corporation is entitled to Treaty benefits?

Reasons: See below

17 July 2008 IFA Roundtable, 2008-0272361C6 - Limitation of Benefits

Unedited CRA Tags
Art XXIX A 2(d) & (e)
Summary Under
Tax Topics - Treaties - Income Tax Conventions - Article 29A
look-through of fiscally transparent entities for qualified person purposes

Principal Issues: For purposes of applying the Limitation of Benefits Provision of the Canada-US Income Tax Convention, as amended by the Fifth Protocol (the "Canada-US Treaty"), will Canada look through limited liability companies ("LLCs") and other entities that are fiscally transparent for US purposes, in applying paragraphs 2(d) and (e) of the definition of "qualifying person" of Article XXIX A?

Position: Yes

Reasons: Technical Explanation of the Canada-US Treaty