Income Tax Severed Letters - 2009-08-28

Ruling

2009 Ruling 2009-0313921R3 - Wind-up of creditor into debtor

Unedited CRA Tags
80.01(4) 39(2)
Summary Under
Tax Topics - Income Tax Act - Section 80 - Subsection 80(2) - Paragraph 80(2)(k)
Summary Under
Tax Topics - Income Tax Act - Section 80.01 - Subsection 80.01(4)

Principal Issues: Where the subsidiary (creditor) is wound-up into the debtor and the note is denominated in foreign currency, does subsection 39(2) apply?

Position: No, by virtue of subsection 80.01(4) of the Act (provided elections are filed), there is no capital gain or loss to the creditor thus the historical cost is the value used for purposes of subsection 39(2) of the Act. Pursuant to subsection 80(1) of the Act, the debtor also has no forgiven amount, nor a capital gain or capital loss.

Reasons: Interaction of subsection 80.01(4) and paragraph 80(2)(k) of the Act

2009 Ruling 2008-0304881R3 - Loss Consolidation

Unedited CRA Tags
20(1)(c) 112(1) 69(1) 80(1)

Principal Issues: Is the loss arrangement among affiliated wholly-owned corporations acceptable?

Position: YES

Reasons: meets the requirements

2009 Ruling 2009-0315031R3 - Merger of LSVCC

Unedited CRA Tags
204.85(3); 204.81(1)

Principal Issues: Whether transaction qualifies as a "merger" pursuant to ss204.85(3)?

Position: Yes

Reasons: In accordance with the Act and conforms to tax policy described by Department of Finance.

Ministerial Correspondence

10 August 2009 Ministerial Correspondence 2009-0309551M4 - Requirements for the home renovation tax credit

Unedited CRA Tags
January 27, 2009 Federal Budget - Annex 5

Principal Issues: Taxpayer asked about the requirements for the new home renovation tax credit.

Position: None

Reasons: General comments provided based on budget documents.

Technical Interpretation - External

20 August 2009 External T.I. 2008-0294531E5 F - Placement admissible REÉR - Parts privilégiées RIC

Unedited CRA Tags
4901(2) et 4900(12)c) règl. 146(5)
Summary Under
Tax Topics - Income Tax Act - Section 146 - Subsection 146(5)
premium can be paid in kind with contribution of shares, if validly issued

Principales Questions: Un contribuable qui a acquis des parts privilégiées émises par une coopérative dans le cadre du Régime d'investissement coopératif du Québec, moyennant un engagement de les payer ultérieurement, peut-il les transférer à son REÉR et bénéficier de la déduction prévue au paragraphe 146(5)?

Position Adoptée: Aucune.

Raisons: La question soulevée est fondée sur des hypothèses quant à la manière d'interpréter des dispositions spécifiques de lois québécoises qui ne relèvent pas de la compétence de l'ARC. Puisque nous ne pouvons commenter quant à la validité de ces hypothèses, il nous est impossible de nous prononcer au sujet de la question fondée sur ces hypothèses.

19 August 2009 External T.I. 2009-0326271E5 - Corporate Restructuring

Unedited CRA Tags
86.1

Principal Issues: Whether a spin-off by a non-resident corporation qualifies as an "eligible distribution" under subsection 86.1(2) of the Act.

Position: No.

Reasons: The distribution of shares does not satisfy the requirements of subsection 86.1(2) of the Act.

19 August 2009 External T.I. 2009-0331831E5 - Home Renovation Tax Credit

Principal Issues: Whether the cost of sanding and refinishing hardwood floors is a qualifying expenditure for the purposes of the Home Renovation Tax Credit.

Position: Yes if all other conditions are met.

Reasons: Renovation is of an enduring nature and is integral to the dwelling.

18 August 2009 External T.I. 2009-0306691E5 - Charity owning shares of a subsidiary corporation

Unedited CRA Tags
149.1(1)

Principal Issues: Whether a charity's status is at risk where the charity holds shares of a subsidiary corporation carrying on a business involving rental and sale of real estate.

Position: Question of fact.

Reasons: The determination depends upon whether the relationship between the charitable organization and the subsidiary corporation is suggestive of activities that are other than passive in nature.

11 August 2009 External T.I. 2009-0309181E5 - Home Renovation Tax Credit - Condominium

Unedited CRA Tags
Annex 5 of the 2009 federal budget Subsection 84(1) of the Condominium Act, 1998

Principal Issues: Will expenditures that are incurred in respect of common areas of a condominium and are paid out from a reserve fund and/or special assessment cash call, qualify for the HRTC?

Position: Yes, as long as the expenditures incurred by the condominium corporation are eligible expenditures made in respect of eligible dwellings, they will qualify for the HRTC regardless of whether they are paid out from a reserve fund or a special assessment cash call.

Reasons: The federal 2009 budget documents state that in the case of condominiums, the HRTC will be available for eligible expenditures incurred to renovate the unit that is eligible to be an individual's principal residence as well as the individual's share of the cost of eligible expenditures incurred in respect of common areas.

XXXXXXXXXX 2009-030918
A. Mahendran
August 11, 2009

11 August 2009 External T.I. 2009-0314711E5 - HRTC - planting expenditures

Unedited CRA Tags
2009 Federal Budget

Principal Issues: What type of permanent plantings for a yard qualify for the home renovation tax credit?

Position: Providing the other conditions are met for the HRTC, the expenditures for new sod, trees, perennial shrubs and flowers that are planted in the land that forms part of an eligible dwelling will qualify for the HRTC.

Reasons: Based on the 2009 federal budget. HRTC Q & A.

XXXXXXXXXX 2009-031471 N. Shea-Farrow
August 11, 2009

Technical Interpretation - Internal

12 August 2009 Internal T.I. 2009-0333851I7 - Non-Arm's Length Transfer of Property

Unedited CRA Tags
s. 160

Principal Issues: Whether an assessment under section 160 is supportable in law, where a joint bank account is used to thwart collection.

Position: Yes.

Reasons: Case law.

26 May 2009 Internal T.I. 2008-0301051I7 - Make-Whole Amount

Unedited CRA Tags
18(9.1); 39(2)

Principal Issues: Are the make-whole amounts deductible as interest?

Position: YES

Reasons: Consistent with prior opinions

6 April 2009 Internal T.I. 2008-0289281I7 - loss Utilization - Minority Interest

Unedited CRA Tags
12(1)(x)

Principal Issues: Are the transactions designed by XXXXXXXXXX subject to 12(1)(x)

Position: YES

Reasons: Transactions entered only for the purpose of satisfying the minority interest.
JURISPRUDENCE: