Income Tax Severed Letters - 2010-01-15


2009 Ruling 2009-0336261R3 - transferable warrants & flow through shares

Unedited CRA Tags
66(15); 66(12.6); 66(12.66)

Principal Issues: 1. whether transferable flow-through warrants qualify as FTS

Position: 1.if all conditions of definition in 66(15) met at the time warrant is exercised

Reasons: 1. based on proposed transactions "agreement in writing" and other required conditions will be met when warrant is exercised

2009 Ruling 2009-0340351R3 - Substituted Property

Unedited CRA Tags
88(1)(c.3) 88(1)(c)(vi) 248(10)

Principal Issues: Whether Guarantee Rights constitute property described in paragraph 88(1)(c.3)

Position: Favourable Ruling provided.

Reasons: In compliance with the law and previous positions.

Technical Interpretation - External

6 January 2010 External T.I. 2009-0333541E5 - Employer-Provided Meals or Allowances

Unedited CRA Tags

Principal Issues: Whether certain employer provided amounts fit within the administrative guidelines for OT meal allowances and for allowances for travel within a municipality or metropolitan area as described in ITTN #40.

Position: Question of fact.

Reasons: Must be determined based on facts.

23 December 2009 External T.I. 2009-0314661E5 - Doctor's retention bonus - business or personal

Unedited CRA Tags

Principal Issues: Whether payments received by a doctor from Doctors Manitoba's Physician Retention Program can be reported by the doctor's professional corporation or whether it is personal income.

Position: Although it is a question of fact, it appears that the income should be reported by the doctor personally.

Reasons: The eligibility requirements for the retention payments specify that only Manitoba physicians who are fully registered in Manitoba will qualify for such payments.

23 December 2009 External T.I. 2009-0342711E5 - Medical Expense

Unedited CRA Tags

Principal Issues: Do the costs of using a personal trainer recommended by a doctor qualify as medical expenses under the provisions of s. 118.2 of the Income Tax Act, R.S.C. 1985, c.1 (5th Supp.)

Position: No

Reasons: Section 118.2(2)(a) requires that amounts be paid to a medical practitioner, dentist or nurse or a public or licensed private hospital.

23 December 2009 External T.I. 2009-0343871E5 - Application date of amendments to ss. 99(1)

Unedited CRA Tags

Principal Issues: How will the CRA apply the proposed amendments to ss. 99(1) in order to prevent double-taxation

Position: While awaiting Royal Assent, the CRA has a policy to allow taxpayers to file their returns on the basis of proposed legislation.

Reasons: Stated position

22 December 2009 External T.I. 2009-0337761E5 - Travel expenses for medical care

Unedited CRA Tags
118.2(2)(g) and 118.2(2)(h)

Principal Issues: Where a taxpayer is required to travel a minimum of 80 kilometres in order to obtain medical treatment, would the following expenses be eligible as medical expenses under paragraph 118.2(2)(h): (a) parking expenses; (b) alcohol purchased with a meal

Position: Question of fact in each case.

Reasons: Legislation

18 December 2009 External T.I. 2009-0313121E5 F - Sommes reçues par un associé qui se retire

Unedited CRA Tags
96(1.1); 96(1.4); 98.1(1)

Principales Questions: Est-ce que des mensualités reçues d'une société de personnes par un associé qui se retire constituent un revenu ou un droit aux biens de la société de personnes?

Position Adoptée: Commentaires généraux fournis car question de fait. Si l'intention des parties était uniquement de compenser l'associé qui se retire quant à l'achalandage, les paiements versés au contribuable pourraient être de nature capitale. Toutefois, si l'intention des parties visait plutôt une distribution des bénéfices de la société de personnes, les paiements versés à l'associé qui se retire seraient du revenu.

Raisons: Question de fait. Nous ne sommes pas en mesure de confirmer dans la situation donnée que la société de personnes voulait compenser l'associé qui se retire pour les travaux en cours, l'achalandage ou pour les autres dommages, en vertu de l'article XXXXXXXXXX de la convention originale de la société de personnes. De même, nous ne sommes pas en mesure de confirmer que le paragraphe 96(1.1) de la Loi de l'impôt sur le revenu ne s'applique pas à la situation donnée.

17 November 2009 External T.I. 2009-0342581E5 - Swimming pool for METC and HRTC

Unedited CRA Tags

Principal Issues: 1) Whether a swimming pool may qualify for the medical expense tax credit. 2) Whether a swimming pool qualifies for the home renovation tax credit.

Position: 1) No. 2) Yes

Reasons: 1)Pursuant to the restrictions under paragraph 118.2(2)(l.2), a swimming pool would typically be expected to increase the value of the home. Additionally, such an expense would be of a type that would normally be incurred by persons who have normal physical development or who do not have a severe and prolonged mobility impairment. A swimming pool would also not qualify under paragraph 5700(i) of the Regulations which describes a "device that is exclusively designed to assist an individual in walking where the individual has a mobility impairment ". 2) CRA website of examples of eligible expenses in the home renovation tax credit includes swimming pools.


8 December 2009 Roundtable, 2009-0347661C6 - debt parking and foreign currency

Unedited CRA Tags
80(2)(k); 80.01(1); 80.01(8); 80.01(11)

Principal Issues: Whether paragraph 80(2)(k) applies for purposes of determining the "forgiven amount" for purposes of subsection 80.01(8)?

Position: Yes, paragraph 80(2)(k) applies for purposes of determining the "forgiven amount" under the debt-parking rules in section 80.01.

Reasons: This result flows from the provisions of the Act.

30 November 2009 Roundtable, 2009-0348851C6 - Paragraph 17(8)(a) TEI Conference Question #2

Unedited CRA Tags
17(8), 20(1)(c)(i)

Principal Issues: How does CRA establish that the amount owing is used for one of the eligible purposes described in paragraph 17(8)(a)?

Position: With reference to the approach in IT-533.

Reasons: Both subparagraph 20(1)(c)(i) and paragraph 17(8)(a) require a determination of the use of money derived by incurring indebtedness and should generally be interpreted in a similar manner.

Technical Interpretation - Internal

14 December 2009 Internal T.I. 2009-0333931I7 - Education & Tuition Credit, licence fee deduction

Unedited CRA Tags
8, 18, 118.5; 118.6

Principal Issues: 1. Whether individuals taking a particular course are eligible to claim the education or tuition tax credit.
2. Whether licence fees paid by an employee are deductible for income tax purposes.

Position: 1. Question of fact.
2. No deduction from employment income. Deductible from business income.

Reasons: 1. Individual must meet the requirements outlined in sections 118.5 and 118.6 of the Act.
2. In the employment income context, the requirement of paragraph 8(1)(i) is not met. For business income, the amount will constitute an expense incurred for the purpose of earning business income.

11 December 2009 Internal T.I. 2009-0350221I7 F - Prestations d'assurance emploi

Unedited CRA Tags
60n)(iv); 60v.1); 3

Principales Questions: Le contribuable peut-il réclamer une déduction en vertu de la sous-section e) de la Loi de l'impôt sur le revenu lorsque son revenu net est égal à zéro? Pourrait-il bénéficier d'une exemption administrative lui permettant de réclamer la déduction dans une année antérieure?

Position Adoptée: Non. Un contribuable peut réclamer des déductions prévues à la sous-section e) de la Loi jusqu'à concurrence de son revenu net. Aucune exemption administrative ne peut permettre au contribuable de réclamer ces déductions dans une autre année.

Raisons: Loi de l'impôt sur le revenu.