Income Tax Severed Letters - 2012-01-06

Ruling

2011 Ruling 2011-0408781R3 - Partition of Property - Land and Buildings

Unedited CRA Tags
248(20), (21)
Summary Under
Tax Topics - Income Tax Act - Section 248 - Subsection 248(21)
partition of one building from 2 others

Principal Issues: Subdividing, then partitioning land and three buildings, with some former co-owners remaining co-owners of part of the property after the partition.

Position: Ruling issued.

Reasons: Satisfied all statutory and administrative requirements.

2011 Ruling 2011-0427511R3 - Deemed disposition

Unedited CRA Tags
106(2), 107(1), 248(1)

Principal Issues: Proposed transactions aimed at varying a discretionary inter vivos trust settled on XXXXXXXXXX to extend the distribution date of the trust from XXXXXXXXXX (thus the amended distribution date would still be within the XXXXXXXXXX year deemed disposition date).
The rulings requested are:
A. There will not be a resettlement of the Trust or a disposition of the assets held in the Trust as a result of the variation of the Trust.
B. There will not be a disposition of the income or capital interests of any beneficiary of the Trust as a result of the variation of the Trust for purposes of subsections 106(2) and 107(1) and the definition of "disposition" in subsection 248(1) of the Act.
C. Subsections 56(2), 105(1) and 246(1) of the Act will not be applicable solely as a consequence of the proposed transactions.
D. Section 245 will not be applicable to redetermine the tax consequences.

Position: Rulings A - the proposed amendment to the Trust will not result in a resettlement of the Trust or a disposition of the assets held in the Trust. Ruling B - the proposed amendment to the Trust will not result in a disposition of the income or capital interests of any beneficiary of the Trust as a result of the variation of the Trust for purposes of subsections 106(2) and 107(1) and the definition of "disposition" in subsection 248(1) of the Act. Ruling C - not ruled. Ruling D - not ruled.

Reasons: Rulings A and B are consistent with rulings previously issued. The proposed change is administrative in nature and is not substantial. Ruling C - conditions set out in subsections 56(2), 105(1) and 246(1) do not apply to this case. Ruling D - no GAAR issue to consider in this case.

Technical Interpretation - External

14 December 2011 External T.I. 2011-0398871E5 - Education Tax Credit for a practicum

Unedited CRA Tags
118.6(1), 118.6(2)

Principal Issues: Where there is a practicum, does the student qualify as full or part time for the ETC?

Position: Depends

Reasons: CRA generally relies on the institution's determination as to whether the individual is registered as a full-time student.

14 December 2011 External T.I. 2011-0418081E5 - METC and DTC - nursing home care

Unedited CRA Tags
118.3(1)(c), 118.2(2)(b), 118.2(2)(b.1), 118.2(2)(d)

Principal Issues: Whether an individual can claim amounts paid for full-time care in a nursing home under paragraph 118.2(2)(b.1) instead of under paragraphs 118.2(2)(b) or (d) in order to also claim the disability tax credit in a situation where there is no detailed breakdown on the receipt showing the portion of the payments relating to attendant care.

Position: No.

Reasons: The wording of paragraph 118.3(1)(c) prevents an individual from claiming both the disability tax credit and the medical expenses for an attendant or care in a nursing home if a claim is made under paragraphs 118.2(2)(b) or (d). Though this restriction does not apply if a medical expense claim is made in respect of attendant care under paragraph 118.2(2)(b.1), one of the conditions of that provision is the requirement of a receipt to prove payment of the remuneration for attendant care.

13 December 2011 External T.I. 2011-0420021E5 - METC- Cost of Van and Cost of Adapting Van

Unedited CRA Tags
118.2(1), 118.2(2)(l.7), 118.2(2)(m), Reg 5700(m),(n)

Principal Issues: Whether the acquisition cost of a van and the cost of adapting the van qualify for the METC.

Position: Yes, within certain limits, if all the conditions are met.

Reasons: Wording of the provisions.

22 November 2011 External T.I. 2011-0401711E5 - Whether diagnostic procedure qualifies for METC

Unedited CRA Tags
118.2(2)(o)

Principal Issues: Whether the charges by a fertility clinic would qualify under paragraph 118.2(2)(o) of the Act.

Position: They appear to qualify to the extent that they relate to cycle monitoring fees.

Reasons: Paragraph 59 of IT-519R2.

21 November 2011 External T.I. 2011-0424331E5 - ITA 110.6(14)(f)

Unedited CRA Tags
110.6(1); 110.6(2.1); 110.6(14)(f)
Summary Under
Tax Topics - Income Tax Act - 101-110 - Section 110.6 - Subsection 110.6(14) - Paragraph 110.6(14)(f)
"substantially all" test where leased assets

Principal Issues: Whether the shares of a corporation qualify as qualified small business corporation shares.

Position: Possibly. It is a question of fact.

Reasons: The law.

18 November 2011 External T.I. 2011-0422441E5 - Capital dividend paid to a Non-Resident

Unedited CRA Tags
212(1)(c); 212(11)
Summary Under
Tax Topics - Income Tax Act - Section 212 - Subsection 212(1) - Paragraph 212(1)(c)
redistribution of capital dividend subject to Part XIII tax
Summary Under
Tax Topics - Income Tax Act - Section 212 - Subsection 212(11)
redistribution of capital dividend subject to Part XIII tax

Principal Issues: Whether a capital dividend paid to an estate and redistributed to a non-resident is subject to Part XIII withholding tax.

Position: Yes.

Reasons: An amount that is a distribution of, or derived from, a "dividend that is not a taxable dividend" (e.g. a capital dividend) received by the trust or estate on a share of the capital stock of a corporation resident in Canada is subject to Part XIII tax.