Income Tax Severed Letters - 2009-07-10

Ruling

2009 Ruling 2008-0284621R3 - Loss Utilization

Unedited CRA Tags
20(1)(c), XXXXXXXXXX 112, 15(1), 56(2), 69(1), 69(4), 69(11), 246(1), 245(2)

Principal Issues: Is the Loss utilization arrangement acceptable?

Position: Yes

Reasons: Meets the technical requirements of the provisions.

2009 Ruling 2008-0286681R3 - XXXXXXXXXX paid by NPO

Unedited CRA Tags
149(1)(l), 138(1), 248(1), 15(1)

Principal Issues: Will an organization lose its tax exempt status under 149(1)(l) if it makes payments to its members under a XXXXXXXXXX program?

Position: Not in this situation.

Reasons: The organization has organized its program so that no income is being paid to members. Eligible members are receiving a return of contributions only.

Ministerial Correspondence

29 June 2009 Ministerial Correspondence 2009-0322921M4 F - Déduction pour amortissement - ordinateurs

Unedited CRA Tags
CAT 50 Règl CAT 52 Règl

Principales Questions: La déduction pour amortissement accélérée pour ordinateurs, annoncée dans le cadre du budget fédéral 2009, peut-elle être réclamée à l'égard des claviers et souris ergonomiques lavables acquis séparément?

Position Adoptée: Commentaires généraux fournis.

Raisons: Cette déduction pour amortissement accélérée sera disponible à l'égard de ces biens si ceux-ci sont acquis en même temps que le matériel électronique universel de traitement de l'information et les logiciels de systèmes connexes donnant droit à cette déduction pour amortissement.

26 June 2009 Ministerial Correspondence 2008-0300071M4 - Olympic Medals

Unedited CRA Tags
56(1)(n) Regulation 7700 143.1

Principal Issues: Taxation of prizes awarded to an athlete for winning a medal at the Olympic Games.

Position: Prize would be taxable under paragraph 56(1)(n) and would not be a prescribed prize.

Reasons: The law.

26 June 2009 Ministerial Correspondence 2009-0318281M4 - Tuition and Education Tax credits

Unedited CRA Tags
118.5, 118.6

Principal Issues: The taxpayer wanted information about federal tax recognition for students who pursue further education and their families.

Position: The Minister gave information on the tuition, education and textbook tax credits.

25 June 2009 Ministerial Correspondence 2009-0322891M4 F - Déduction pour amortissement - ordinateurs

Unedited CRA Tags
CAT 50 Règl CAT 52 Règl

Principales Questions: La contribuable désire obtenir des renseignements additionnels concernant la déduction pour amortissement accélérée pour les ordinateurs et les logiciels pour ces ordinateurs acquis après le 27 janvier 2009 et avant le 1er février 2011.

Position Adoptée: Renseignements généraux fournis.

Raisons: Loi de l'impôt sur le revenu

23 June 2009 Ministerial Correspondence 2009-0321121M4 - Eligible expenditures- home renovation tax credit

Unedited CRA Tags
January 27, 2009 federal budget

Principal Issues: Do the costs for the installation of solar photovoltaic (PV) panels qualify for the HRTC?

Position: Depends

Reasons: Eligible expenditures for the home renovation tax credit include only expenditures that relate to a renovation or an alteration of an eligible dwelling (including land) that is enduring in nature and integral to the dwelling. Solar PV panels would be considered enduring in nature and integral to the eligible dwelling. If the cost of the solar PV panels is part of the purchase price of the dwelling, it will not qualify.

23 June 2009 Ministerial Correspondence 2009-0325861M4 - General Purpose computer Equipment - Class 52

Unedited CRA Tags
20(1)(a); 1100(1)(a)(xxxviii); Class 52 Schedule II of ITR

Principal Issues: Whether a particular XXXXXXXXXX would be entitled to the 100% CCA rate for a general-purpose computer and printer acquired after January 27, 2009 and before February 2011.

Position: None taken. General comments only.

Reasons: The Income Tax Regulations were amended on May 13, 2009 to add new Class 52 to Schedule II (CCA rate 100%) [See May 13, 2009 - SOR/2009 -126 and June 10, 2009 - SOR/2009-155]. Among other things, to be eligible computer equipment, the computer and printer must have been acquired by the XXXXXXXXXX either for the purpose of earning business income or to earn income from property.

8 June 2009 Ministerial Correspondence 2009-0318781M4 - Special Worksites and Remote Work Locations

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

Principal Issues: Writer had concerns about the taxability of employer-provided board and lodging at a particular work location.

Position: General comments were provided on the rules for special work sites and remote work locations.

Reasons: Question of fact as to whether taxpayer's situation qualifies under subsection 6(6) of the Act.

Technical Interpretation - External

2 July 2009 External T.I. 2009-0315211E5 - T5018 - Reporting Income Construction Activities

Unedited CRA Tags
Section 238 of the Regulations

Principal Issues: Whether a person whose business income is derived primarily from construction activities must file Form T5018

Position: Yes.

Reasons: Section 238 of the Regulations

2 July 2009 External T.I. 2009-0317201E5 - Marriage Breakdown and Spousal RRSP

Unedited CRA Tags
146(8.3)

Principal Issues: Whether funds can be transferred from a spousal or common-law partner RRSP to a non-spousal or common-law partner RRSP after a marriage breakdown.

Position: Yes, but the non-spousal or non-common-law partner RRSP will become a spousal or common-law partner RRSP.

Reasons: The legislation is clear. However, since the spousal or common-law partner RRSP attribution rules in subsection 146(8.3) do not apply when the taxpayer and his/her spouse or common-law partner are living separate and apart at the time of the withdrawal, we administratively allow certain information on the T4RSP to cease to be reported.

2 July 2009 External T.I. 2009-0319211E5 F - T5008 : Contrat d'opération à terme (Futures)

Unedited CRA Tags
230 reg

Principales Questions: Quel est le "produit de disposition ou paiement" à inscrire sur le formulaire feuillet T5008 relativement à un contrat d'opération à terme donné sur obligations du gouvernement du Canada de dix ans inscrites à la cote de la Bourse de Montréal ("CGB"?

Position Adoptée: Le "produit de disposition ou paiement" à inscrire sur le formulaire feuillet T5008 est le montant du gain ou de la perte (montant négatif) réalisé(e) à la fermeture de la position dans le contrat donné.

Raisons: Règlement et guide RC4268.

2 July 2009 External T.I. 2009-0323321E5 - Public Transit Pass Credit

Unedited CRA Tags
118.02(1)

Principal Issues: Would the transportation of public school students on a school bus (under a user-pay system) be considered services offered to "the general public" under the definition of public commuter transit services in subsection 118.02(1)?

Position: Probably not.

Reasons: Services offered to such a restricted group of individuals are not services offered to the general public.

30 June 2009 External T.I. 2009-0313871E5 - Crown corporations

Unedited CRA Tags
149(1)(d) 149(1.1) 149(1.3) 227(14)

Principal Issues: Whether a corporation is exempt from tax under Part I by virtue of paragraph 149(1)(d) of the Act, whether a corporation is exempt from tax under Parts IV, IV.1, VI, and VI.1 of the Act.

Position: Where all of the shares of a corporation are owned by Her Majesty in right of Canada or Her Majesty in right of a province, and subsection 149(1.1) and proposed subsection 149(1.3) do not apply, a corporation is exempt from tax under Part I throughout a taxation year by virtue of paragraph 149(1)(d) of the Act. In addition, no tax will be payable by the corporation under Part I.3 of the Act by virtue of paragraph 181.1(3)(c) of the Act or under Parts IV, IV.1, VI, and VI.1 of the Act by virtue of subsection 227(14) of the Act.

Reasons: 149(1)(d)

23 June 2009 External T.I. 2009-0322551E5 F - Commission scolaire, Organisme public

Unedited CRA Tags
118.1(1)d.1)

Principales Questions: Est-ce qu'une commission scolaire peut se qualifier d'organisme public remplissant une fonction gouvernementale au Canada pour les fins de la définition de total des dons de bienfaisance tel que proposé dans le projet de loi C-10.

Position Adoptée: Oui

Raisons: Une commission scolaire serait un organisme public remplissant une fonction gouvernementale au Canada.

Technical Interpretation - Internal

2 July 2009 Internal T.I. 2009-0319911I7 - Children's Fitness Tax Credit - Year of Separation

Unedited CRA Tags
118.03

Principal Issues: Who can claim eligible expenses for the Children's Fitness Tax Credit in the year of separation?

Position: Eligibility to claim the CFTC does not depend on whether the child resides with the parent. Generally, either parent can claim.

Reasons: Definition of qualifying child in subsection 118.03(1).

12 May 2009 Internal T.I. 2009-0306281I7 - Application of Paragraph 149(1)(c)

Unedited CRA Tags
149(1)(c); 149(1)(d.5)

Principal Issues: Is the Entity a public body performing a function of government as that term is used in paragraph 149(1)(c) of the Act?

Position: No.

Reasons: It is not clear that the Entity, which is a corporation, is a public body as its relationship with its members appears to be essentially based on regular corporate principles. Further, it does not appear that the Entity is performing a function of government. It has no power to tax or govern its members. The Entity does not offer significant services to its members that are similar to those offered by a municipal or provincial government and does not itself negotiate on behalf of its members.

8 June 2008 Internal T.I. 2008-0294291I7 - Deadline for filing a waiver of tax credit - OITC

Unedited CRA Tags
TA 96(14) ITA 150(1)(a), 37(11) & 127(9)(m)

Principal Issues: Can a corporation file a waiver of tax credit under subsection 96(14) of the Taxation Act, 2007 (TA) to waive all or part of its Ontario Innovation Tax Credit (OITC) after the deadline for the filing of its income tax return for the year?

Position: Yes. Generally, a corporation can file a waiver of tax credit under subsection 96(14) of the TA to waive all or part of its OITC for a taxation year until the expiration of the normal reassessment period for that taxation year.

Reasons: Subsection 96(14) of the TA allows a corporation to waive its eligibility for all or a portion of OITC for a taxation year by delivering a written waiver with its original income tax return which is required to be delivered within six months after the end of the taxation year, or with an amended return for that taxation year which is required to be delivered within the normal reassessment period which is 3 or 4 years from the date of mailing of an original notice of assessment.