Income Tax Severed Letters - 2010-01-01

Principal Issues: (A) Whether "the construction of a building, road, dam, bridge or similar structure", as described in paragraph 1 of IT-92R2 can be considered to include the demolition of a building or a factory to be entitled to use the completed contract method.
(B) Whether a non-resident company operating through a Canadian branch, is entitled to use the completed contract method.

Position: (A) Yes; (B) Yes, the taxable income earned in Canada, could be calculated using the completed contract method as indicated in the IT-92R2 provided that all the necessary preconditions are met.

Reasons: (A) "construction" is a very general term that can include demolition for the purpose of the IT-92R2. (B) The Act

Principal Issues: 1. Can members of a co-operative housing corporation claim the HRTC for renovations to the housing unit they reside in for expenditures incurred either directly by the member or by the co-operative housing corporation?
2. What is the maximum HRTC claim per household?

Position: 1.Members who own shares in a co-operative housing corporation can claim the HRTC for expenditures they incur for the unit they reside in if the housing unit is their eligible dwelling.
2. The HRTC is family based. The maximum eligible expenditures per family is $10,000 and may be split among eligible family members. Maximum eligible expenditures include the total of expenses allocated to the member by the co-operative housing unit and the expenses incurred directly by the member.

Reasons: 1.Draft 118.04-Eligible dwelling.

Principal Issues: Does the repair of a crack in a wall and replacement of a water damaged wall qualify as an eligible expenditure for the HRTC?

Position: Yes

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. The repair of a crack on a side of a house and replacement of a water damaged wall of the eligible dwelling is enduring in nature and integral to the eligible dwelling (including land) and qualifies for the HRTC.

XXXXXXXXXX 2009-033222
George A. Robertson, CMA
December 15, 2009

Principal Issues: Whether an employee who travels away from the municipality during a work shift but returns home each day is entitled to claim a deduction for meals under paragraph 8(1)(g).

Position: The meals are not deductible under paragraph 8(1)(g). However, and while ultimately a question of fact, it appears that the meals may be deductible under paragraph 8(1)(h).

Reasons: No amounts are disbursed by the employee for any lodging and the employee returns home at the end of each work shift.

Principal Issues: Is the home renovation tax credit applicable to individuals who own a leasehold interest in RV lots and/or condominiums?

Position: No.

Reasons: An eligible dwelling, for purposes of the HRTC, does not include a leasehold interest in a housing unit. A leasehold interest in a RV lot is not considered to be owned by the individual. As a result, the lots will not form part of the individual's eligible dwelling and any renovations made to the lots will not qualify for the HRTC.

Principales Questions: Est-ce que l'article 7 s'applique dans une situation où une fiducie créée dans le cadre d'un " Employee Stock Ownership Plan " (Régime) se porte acquéreur de la totalité des actions de la société USCO et que chaque année le Régime crédite dans un compte notionnel de chaque Participant (incluant des Participants résident du Canada et employés de CANCO) une quote-part des actions ainsi acquises?.

Position Adoptée: Oui. La demande de décisions a été retirée par le représentant.

Raisons: Lorsque les actions sont créditées dans le compte notionnel d'un Participant donné, le paragraphe 7(2) s'applique puisqu'un fiduciaire détient un titre, en fiducie ou autrement, conditionnellement ou non, pour un employé.

Principal Issues: Are expenditures incurred for common property renovations eligible for the HRTC if the amounts are paid from a contingency reserve fund?

Position: Yes, providing the renovations are integral to the strata corporation's common property and are enduring in nature.

Reasons: Expenditures that are integral to the eligible dwelling and enduring in nature will qualify for the HRTC.

Principal Issues: Whether the facility qualifies as a nursing home.

Position: Likely yes.

Reasons: The facility appears to provide a sufficient level of care and attendance by qualified medical personnel.