Income Tax Severed Letters - 2010-05-21


2010 Ruling 2010-0363461R3 - Supplemental Ruling

Unedited CRA Tags
73(1), 73(1.01)(c)(ii), 73(1.02)(b)(ii)

Principal Issues: Changes to Ruling 2009-033051

Position: Ruling modified

Reasons: Changes do not affect the validity of the rulings given.

2010 Ruling 2009-0346351R3 F - Post Mortem Planning

Unedited CRA Tags
84(2); 84.1; 245(2)

Principales Questions: Post Mortem Planning.

Position Adoptée: Favourable Rulings provided.

Raisons: Meets the requirements of the law.

Technical Interpretation - External

13 May 2010 External T.I. 2009-0328741E5 F - Régime "à prix coûtant majoré"

Unedited CRA Tags
6(1)a); 248(1) "RPAM"
satisfaction of “reasonable risk” condition in IT-339R2 for cost-plus plan

Principales Questions: Quel est le traitement fiscal d'un régime " à prix coûtant majoré " offert aux cadres d'une entreprise?

Position Adoptée: Commentaires généraux. Le traitement fiscal d'un régime " à prix coûtant majoré " diffère dépendamment s'il se qualifie ou non de RPAM.

Raisons: Question de fait à savoir si un régime " à prix coûtant majoré " se qualifie de RPAM.

11 May 2010 External T.I. 2009-0346301E5 - Sabbatical Leave - Research Expenses

Unedited CRA Tags

Principal Issues: Whether living, accommodation and car rental expenses, while on sabbatical leave outside of Canada, are allowable research expenses when computing income under 56(1)(o) from research grant.

Position: Question of fact.

Reasons: Personal and living expenses are not allowable expenses for the purpose of computing income under subparagraph 56(1)(o)(i). If a taxpayer conducts research work in a temporary place, away from his permanent home, the taxpayer may be considered to be sojourning rather than travelling. Car rental expenses incurred for travel between the taxpayer's permanent home and the temporary place while engaged in research work may be deductible in computing income from research grants.

26 April 2010 External T.I. 2010-0359481E5 - Small Business Deduction

Unedited CRA Tags

Principal Issues: Whether the small business deduction may be multiplied where a corporate partnership is introduced to operate a new business using two pre-existing holdcos, as corporate partners, in order to generate active business income in the hands of the holdcos. The holdcos were 50/50 shareholders of an Opco, which already enjoys the benefits of the SBD.

Position: General comments provided.

Reasons: Whether the SBD must be shared amongst the corporations involved rests upon a determination whether or not they are "associated". The association test relies on control that is exercised "directly or indirectly in any manner whatever," which is an expression that encompasses de jure or de facto control. Whether de facto control exists would ultimately have to be decided by the local TSO.

22 April 2010 External T.I. 2010-0354361E5 - Principal Residence

Unedited CRA Tags
13(7)(e), 18(1)(a), 18(1)(b), 18(1)(h), 20(1)(c), 40(2)(b), 54, 251

Principal Issues: 1. Is interest expense incurred to acquire the upper unit of a duplex for rental purposes deductible for tax purposes when taxpayer resides in the lower unit of the duplex? 2. Would paragraph 13(7)(e) of the Act adjust the capital cost of the depreciable property if it is purchased from a sibling? 3. Would the sale of the upper unit in the duplex qualify for the principal residence exemption?

Position: 1. Yes. 2. Yes. 3. Maybe.

Reasons: 1. Interest is generally deductible on funds borrowed to purchase a rental property. 2. Siblings, as related individuals connected by blood, are deemed not to deal with each other at arm's length. If a depreciable property is transferred in a non-arm's length transaction, par 13(7)(e) would apply. 3. The capital gain on the sale of the interest in the duplex (as represented by the upper unit of the duplex) would qualify for the principal residence exemption, if the housing unit met the definition of a principal residence under sec 54 of the Act.

22 April 2010 External T.I. 2010-0353301E5 - Sale of Foreign Patent

Unedited CRA Tags

Principal Issues: Whether the sale of certain foreign patents would give rise to a gain on account of income or capital gain.

Position: General comments provided.

Reasons: Question of fact. The law and related jurisprudence.

19 April 2010 External T.I. 2010-0355711E5 - Taxability of award

Unedited CRA Tags
9(1), 56(1)(n)

Principal Issues: Are the winnings from the XXXXXXXXXX held in the United States taxable here in Canada?

Position: Yes.

Reasons: On the basis of the information provided, the prize is received by virtue of the Taxpayer's business therefore should be included pursuant to subsection 9(1) of the ITA.

W. Doiron
April 19, 2010

23 June 2008 External T.I. 2008-0279141E5 - Electronic Commerce

Unedited CRA Tags
212 Articles 7 & 12 Tax Treaties

Principal Issues: Taxation of electronic commerce in Canada

Position: General information provided

Reasons: See below


5 May 2010 Roundtable, 2010-0363851C6 - Eligible Dividends and LRIP

Unedited CRA Tags
89(1) and 89(14)

Principal Issues: Calculation of LRIP-Dividends paid to non-residents

Reasons: Wording of the legislation

Technical Interpretation - Internal

27 April 2010 Internal T.I. 2009-0335761I7 F - REÉR et revenu d'un Indien

Unedited CRA Tags
81(1)a) 146(9), 146(10)
s. 87 exemption did not apply to blatant RPP/RRSP stripping arrangement
ss. 146(9) and (10) applicable to RRSP purchase of Coop units at undervalue and loan by Coop to annuitant

Principales Questions: Un Indien peut-il bénéficier de l'exonération prévue à l'alinéa 81(1)a) à l'égard d'un montant imposable selon146(9) ou (10) dans le cadre d'un stratagème de dépouillement d'un REÉR lorsque les contributions au REÉR proviennent entièrement d'un RPA dont les prestations auraient été entièrement exonérées de l'impôt?

Position Adoptée: Non.

Raisons: Lorsque les cotisations au REÉR proviennent d'un RPA dont les prestations auraient été entièrement exonérées en vertu de l'alinéa 81(1)a), l'ARC a déjà exprimé l'opinion que les prestations en vertu du REÉR seront habituellement exonérées. À notre avis, la position habituelle de l'Agence ne s'applique pas dans la situation spécifique sous étude.