Income Tax Severed Letters - 2008-11-14

Ruling

2008 Ruling 2007-0262411R3 F - Réorganisation d'une société de personnes

Unedited CRA Tags
125(7) 256(2.1)

Principales Questions: Dans le cas où un associé d'une société de personnes crée une société par actions par l'entremise de laquelle des services professionnels XXXXXXXXXX seront fournis à des XXXXXXXXXX , est-ce que cette société par actions serait admissible à la déduction accordée aux petites entreprises?

Position Adoptée: Question de faits. Généralement oui, si certaines conditions sont rencontrées.

Raisons: Selon la Loi de l'impôt sur le revenu actuelle. En accord avec des décisions anticipées précédentes.

Technical Interpretation - External

12 November 2008 External T.I. 2008-0267721E5 - Donate use of property for limited time as gift

Unedited CRA Tags
118.1

Principal Issues: Whether donation of a right to use a vacation property (cottage) for a limited time is a gift in kind. Whether this is a "transfer of property".

Position: No

Reasons: A right to use property is a property. However, the granting of such a right is not a transfer of property, per Dunkelman v. M.N.R., 59 DTC 1242, which held that a loan of money is not a transfer of property. Also, the legislation on attribution rules includes not only transferred property but also "lent property". If all rights to use property resulted in a transfer there would be no need in section74.1 for "lent property". XXXXXXXXXX . And at Civil law, a gratuitous loan of property is not considered a gift; it is a loan for use as defined by article 2313 of the Quebec Civil Code.

4 November 2008 External T.I. 2008-0280701E5 - Barter Transaction - Income Tax & GST Implications

Unedited CRA Tags
9; ETA 165(1); ETA 153(1)(b); ETA 181.3

Principal Issues:
1. What amount should be bought into income by a person providing services in a barter transaction?
2. On what value should GST be collected and remitted, where a person provides services in a barter transaction?

Position:
1. In an arm's length situation, the amount that the person would normally have charged a stranger for his services.
2. GST should be collected and remitted based on the fair market value of the consideration at the time the supply was made.

Reasons:
1. Our position is outlined in paragraph 7 of IT-490: "Barter Transactions".
2. Subsection 153(1) of the Excise Tax Act.

30 October 2008 External T.I. 2008-0269671E5 - Rectification orders

Unedited CRA Tags
69 38 39

Principal Issues: Whether CRA will assess certain transactions as was intended by the parties where the legal documents executed in respect of the transactions do not accurately reflect those intentions.

Position: None taken.

Reasons: General comments only.

29 October 2008 External T.I. 2008-0276691E5 - Post-graduate Educational Fellowships

Unedited CRA Tags
5; 56(1)(n) 56(1)(0) 56(3)

Principal Issues: Are amounts described as educational fellowships exempt from income tax under subsection 56(3) of the Act?

Position: Question of fact but in this case likely not.

Reasons: Amounts appear to be taxable as wages but we don't have all the facts.

29 October 2008 External T.I. 2008-0288681E5 - Special Work Site Exemption

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

Principal Issues: Is an employee's work term at a particular location temporary for the purposes of the special work site exemption under subsection 6(6) of the Act?

Position: Question of fact to be determined on a case-by-case basis. However, based on our understanding of the facts, the fact that such employment at the particular work location may be extended for an additional time period would not, by itself, result in a finding that such employment is no longer temporary.

Reasons: The law.

Technical Interpretation - Internal

3 November 2008 Internal T.I. 2008-0296021I7 - Indian Act- Self-Employment Income

Unedited CRA Tags
81(1)(a)

Principal Issues: Are payments from Correctional Services Canada to Status Indians for services provided to Indians in prison exempt from tax under 81(1)(a)?

Position: Question of fact- but likely not.

Reasons: Income-earning activities appear to off-reserve; insufficient connecting factors to tie the income to a reserve. Position supported by CRA publications and court cases.