Income Tax Severed Letters - 2012-05-25

Ruling

2012 Ruling 2011-0421631R3 - Functional Currency Reporting

Unedited CRA Tags
Section 261

Principal Issues: Whether the Canadian tax results in respect of a particular taxation year are to be determined using the US currency as the taxpayer's elected functional currency.

Position: Yes.

Reasons: Provided that the US currency remains the primary currency in which the taxpayer maintains its records and books of account for financial reporting purposes throughout the taxation year, the requirements of subsection 261(3) are otherwise satisfied.

Ministerial Correspondence

9 May 2012 Ministerial Correspondence 2012-0439071M4 - Volunteer firefighter's tax credit

Unedited CRA Tags
118.06

Principal Issues: What are eligible volunteer firefighting services for firefighter's who are on call?

Position: See letter for details.

Reasons: The legislation.

Technical Interpretation - External

16 May 2012 External T.I. 2012-0439791E5 - Split-Pension Income and Qualified Farm Property

Unedited CRA Tags
110.6(1.3); 110.6(2); 60.03; 60(c).

Principal Issues: For the purposes of applying the definition of qualified farm property, how the election to split pension income affects the calculation of the income of the farm operator from all other non farming sources under 110.6(1.3).

Position: Use income under paragraph 3(a) to calculate income from all other non farming sources.

Reasons: Exclude subdivision e deductions and, in particular, the paragraph 60(c) deduction for a split-pension amount.

15 May 2012 External T.I. 2012-0434831E5 - Characterization of Chilean Sociedad Por Acciones

Principal Issues: Can the Income Tax Rulings Directorate advise whether a Chilean Sociedad Por Acciones is a corporation for purposes of the Income Tax Act?

Position: No.

Reasons: It is a question of fact.

14 May 2012 External T.I. 2012-0440531E5 - Atlantic Investment Tax Credit

Unedited CRA Tags
16.1(1), 127(9) Qualified property

Principal Issues: Whether an AITC could be claimed by a lessee where the lessee and lessor make an election under subsection 16.1(l) of the Act based on the position in Rulings Document 2011-041781?

Position: No.

Reasons: Not in accordance with the meaning of "qualified property" in subsection 127(9) of the Act. The administrative position in paragraph 72 of IT-151R5 was inadvertently extended in Rulings Document 2011-041781 to the definition of "qualified property". This was as a result of a misunderstanding of the technical concern that paragraph 72 of IT-151R5 was trying to address in respect of ITCs for SR&ED.

10 May 2012 External T.I. 2012-0440731E5 F - Employer-provided gifts & Awards

Unedited CRA Tags
6(1)(a)
Summary Under
Tax Topics - Income Tax Act - Section 6 - Subsection 6(1) - Paragraph 6(1)(a)
award of points that could be applied to 40 different services were of near-cash items and, thus, taxable

Principales Questions: Whether an employee recognition program falls within the gifts and awards policy where employees receive points which can be accumulated and redeemed for one or more services chosen from a catalogue containing 40 services.

Position Adoptée: In the particular situation described in the letter, the employee recognition program would not fall within the gifts and awards policy and the award would be a taxable employment benefit (except if otherwise provided in the Act).

Raisons: The gifts and awards policy does not apply to internal points system where an employee earns points and can redeem them for items from a catalogue. The points are treated like a near-cash item.