Income Tax Severed Letters - 2011-01-07

Ministerial Correspondence

25 November 2010 Ministerial Correspondence 2010-0388111M4 F - Commissions - vendeurs d'assurance-vie

Unedited CRA Tags
5, 9.

Principales Questions: (1) Quelle est la position de l'Agence du revenu du Canada relativement à l'imposition des commissions reçues par des vendeurs lorsque ces derniers sont les propriétaires de polices d'assurance-vie et pour lesquelles ils sont tenus de payer les primes?
(2) Est-ce que l'Agence du revenu du Canada entend préciser et diffuser publiquement les politiques administratives en lien avec le paragraphe 27 du Bulletin d'interprétation IT-470R?

Position Adoptée: La position énoncée au paragraphe 27 du bulletin IT-470R est assujettie à certaines exceptions. L'ARC a débuté une revue de la politique administrative énoncée à ce paragraphe 27 et toute modification à cette position sera publiée à l'aide de Nouvelles techniques en matière d'impôt sur le revenu.

Raisons: Revue du Bulletin entreprise.

Technical Interpretation - External

14 December 2010 External T.I. 2010-0379191E5 - Taxability of a Cash Gift

Unedited CRA Tags
69, 252(1) and (2).

Principal Issues: Is a cash gift to an adult child from a parent taxable where the funds are used to pay off a mortgage on the child's home?

Position: No.

Reasons: Amount is personal.

7 December 2010 External T.I. 2010-0381961E5 - Sale of Shares of a Small Business Corporation

Unedited CRA Tags
110.6(2.1), 248(1) small business corporation

Principal Issues: 1) Possible error in purchase and sale agreement. 2) Would the disposition of shares qualify for the capital gains exemption.

Position: 1) Reference to ITTN#22. 2) General comments.

Reasons: 1) See policy above. 2) Question of fact.

7 December 2010 External T.I. 2010-0380951E5 - Qualified Farm Property

Unedited CRA Tags
110.6(1.3); 110.6(1) "qualified farm property"; 110.6(2)

Principal Issues: Whether certain land purchased before 1987 is "qualified farm property" eligible for the enhanced capital gains exemption when it is sold by the son.

Position: It depends on meeting one of the two farming-use tests in subsection 110.6(1.3), as proposed to be amended.

Reasons: As regards the first farming-use test, it is likely that the ownership and gross-revenue tests are met. As regards the second farming-use test, in at least five years during which the land was owned by the father/grand-parent it was likely used principally by the father/grand-parent in carrying on the business of farming in Canada.

3 December 2010 External T.I. 2010-0389101E5 - One-Time Payments

Unedited CRA Tags
3; 9(1); 56(1)(u)

Principal Issues: What is the tax treatment of the one-time payments made to XXXXXXXXXX under the XXXXXXXXXX ?

Position: Question of fact but likely not taxable.

Reasons: The payments seem to constitute a windfall in accordance with the factors listed in IT-334R2.

1 December 2010 External T.I. 2010-0385491E5 F - Postes isolés dans la fonction publique

Unedited CRA Tags
6(1)a); 118.2; 118.2(2)g); 118.2(2)h)

Principales Questions: (1) La Directive sur les postes isolés et les logements de l'État (DPILE) représente-elle un régime privé d'assurance-maladie aux fins de la Loi de l'impôt sur le revenu?
(2) Quel est le traitement fiscal des montants remboursés aux fonctionnaires aux termes de la DPILE?

Position Adoptée: (1) Question de fait.
(2) Si la DPILE est un RPAM et que les frais remboursés sont des frais qui auraient donnés droit au crédit d'impôt pour frais médicaux, il n'y aura aucun montant à inclure dans le calcul du revenu des fonctionnaires qui reçoivent le remboursement. Si ce sont des frais qui ne sont pas inclus au paragraphe 118.2(2), un avantage imposable sera alors inclus dans le calcul des fonctionnaires.

Raisons: Loi de l'impôt sur le revenu.

10 November 2010 External T.I. 2010-0385461E5 - industrial mineral mine

Unedited CRA Tags
Reg. 1100(1)(g)

Principal Issues: In which class should an industrial mineral mine be included on the CCA Schedule?

Position: None. An industrial mineral mine is not included in any class of Schedule II

Reasons: Deduction is provided under Reg. 1100(1)(g) and Schedule V to the Regulations

Conference

8 June 2010 Roundtable, 2010-0363102C6 - Step Conference 2010 - ELHT

Unedited CRA Tags
Proposed 144.1

Principal Issues: Interaction of Health and Welfare Trusts and Employee Life and Health Trusts

Technical Interpretation - Internal

17 September 2010 Internal T.I. 2009-0346931I7 - Transitional Tax Dr/Cr on dissolution of corp.

Unedited CRA Tags
Reg. 400(2)(e.1), TA46(2), TA48(1), TA50(1), TA51(1)

Principal Issues: What are the consequences under Ontario's transitional tax dr/cr if a private corporation voluntarily dissolves and distributes its net assets to its shareholders in a tax year after 2008? What if the corporation incurs a non-capital loss for the year?

Position: When the corporation ceases to have a permanent establishment in Ontario, it must pay its remaining (unamortized) Ontario transitional tax debits in the tax year, or it may claim any remaining Ontario transitional tax credits against a prorated portion of its Ontario income tax payable for the year. Incurring a non-capital loss usually means the corporation has no Ontario income tax payable for the year and its transitional tax credits cannot be applied.

Reasons: A corporation typically ceases to have a permanent establishment when it distributes its net assets to its shareholders during the tax year. However, the corporation may continue to have a deemed permanent establishment in Ontario at its registered or head office under regulation 400(2)(e.1) in which case the corporation will cease to have a permanent establishment in Ontario when it formally dissolves.