Income Tax Severed Letters - 2014-01-15

Ruling

2013 Ruling 2013-0488661R3 - Indian Band -Public Body & Function of Government

CRA Tags
149(1)(c)
Summary Under
Tax Topics - Income Tax Act - Section 149 - Subsection 149(1) - Paragraph 149(1)(c)
Indian band

Principal Issues: Is the XXXXXXXXXX a public body performing a function of government within the meaning of 149(1)(c) and therefore exempt from income tax on the interest income received from a GIC?

Position: Yes

Reasons: The Indian Band is governed by an elected chief and band council. The Indian Band performs several functions of government and has passed by-laws under section 83 of the Indian Act.

2013 Ruling 2013-0496351R3 - Loss Consolidation

CRA Tags
20(1)(c)
Summary Under
Tax Topics - Income Tax Act - Section 111 - Subsection 111(1) - Paragraph 111(1)(a)
value of losses transferred to new Lossco reflected in Lossco sale price
Summary Under
Tax Topics - Income Tax Act - Section 88 - Subsection 88(1.1)
Subco "has been wound up" when it is dissolved

Principal Issues: Is the loss utilization arrangement acceptable?

Position: Yes

Reasons: meets our published position

2013 Ruling 2012-0472721R3 - Inter-vivos share transfer under 73(4) and (4.1)

CRA Tags
110.6(1), 73(4), 69(1), 110.6(8), ITR 6205(2), 70(10), 73(4.1), ITR 6205(1), 245, 69(11), 251.1(1), 110.6(2), 248(1), 251
Summary Under
Tax Topics - Income Tax Act - Section 73 - Subsection 73(4.1)
sale for low-rate promissory notes

Principal Issues: 1. Will anti-avoidance provisions of ss.69 and 245 (GAAR) apply to the proposed dispositions of QFP?

Position: See response.

Reasons: Facts and law

2012 Ruling 2012-0458671R3 - Loss Consolidation

CRA Tags
112(1), 245(1), 12(1)(x), 20(1)(c)

Principal Issues: Is the loss utilization arrangement acceptable?

Position: YES

Reasons: meets the established positions

2012 Ruling 2012-0450391R3 - Forgiven Amount

CRA Tags
245(1), 80(2)(g)

Principal Issues: Where the corporation repays the debt with cash after issuing sufficient shares, is there a forgiven amount?

Position: Not in this case

Reasons: No tax benefit envisioned.

Technical Interpretation - External

18 December 2013 External T.I. 2013-0479421E5 F - Section 30 and Cranberry Farm

CRA Tags
section 30, ITR Schedule II - Class 17, ITR Schedule II - Class 8, ITR Schedule II - Class 6
Summary Under
Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(b) - Capital Expenditure v. Expense - Improvements v. Repairs or Running Expense
initial cranberry plant planting is a cost of land
Summary Under
Tax Topics - Income Tax Act - Section 30
costs of clearing, levelling and draining lands, but not of constructing basins, for a cranberry farm are currently deductible
Summary Under
Tax Topics - Income Tax Regulations - Schedules - Schedule II - Class 17 - Paragraph 17(c)
costs of constructing cranberry farm basins included in Class 17
Summary Under
Tax Topics - Income Tax Regulations - Schedules - Schedule II - Class 6
costs of constructing irrigation pond included
Summary Under
Tax Topics - Income Tax Regulations - Schedules - Schedule II - Class 8
irrigation system included, drainage costs deductible under s. 30

Principales Questions: In a particular situation, what would be the proper tax treatment of different expenses incurred on land in order to produce cranberries?

Position Adoptée: General comments provided.

Raisons: According to the law and previous positions.

29 November 2013 External T.I. 2013-0505451E5 - "Approved" Status

CRA Tags
37(1)(a)(ii), 248(1), 37(7)
Summary Under
Tax Topics - Income Tax Act - Section 37 - Subsection 37(7) - Approved
approval of SR&ED NPO

Principal Issues: "Approved" status requested for the XXXXXXXXXX.

Position: Approval recommended.

Reasons: Information submitted meets the conditions for approval, as set out in SR&ED Third-Party Payments Policy which provides certain requirements to be met in respect of (a) SR&ED, (b) facilities and personnel (c) non-profit status (d) the public as beneficiary and (e) adequate funding for the SR&ED activities. These requirements are described in this letter.

28 November 2013 External T.I. 2013-0504221E5 F - Fin d'années réputées

CRA Tags
251(5)b), 87(2), 249(3.1), 125(7), 87(2)(a)
Summary Under
Tax Topics - Income Tax Act - Section 249 - Subsection 249(3.1)
Amalco not a continuation of predecessors for election purposes/ "immediately before" treated as one minute before
Words and Phrases
immediately before

Principales Questions: Une société issue d'une fusion qui perd son statut de SPCC peut-elle faire le choix prévu à l'alinéa 249(3.1)c)? Can a corporate entity, formed as a result of an amalgamation, that loses its status as a CCPC make the election provided for at paragraph 249(3.1)c)?

Position Adoptée: Non. No.

Raisons: Puisque la société issue de la fusion est une nouvelle société en vertu de l'alinéa 87(2)a) et qu'aucune disposition ne prévoit la continuité des sociétés remplacées pour cette fin, le choix visé au paragraphe 249(3.1) ne peut être fait. En particulier, l'exigence prévue au sous-alinéa 249(3.1)c)(i) n'est pas respectée. Since the corporate entity formed as a result of the amalgamation is deemed to be a new corporation under paragraph 87(2)a) and no provision indicates a continuation of the predecessor corporations in this situation, the section 249(3.1) can be elected. In particular, the condition provided for at subparagraph 249(3.1)(c)(i) is not met.

30 October 2013 External T.I. 2013-0500831E5 F - Frais de bureau à domicile

CRA Tags
81(3), 8(10), 40(2)(b), 45(1)(c), 18(1)(a), 67, 9(1)
Summary Under
Tax Topics - Income Tax Act - Section 8 - Subsection 8(13)
inapplicable where corporation uses its individual shareholder's office
Summary Under
Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(a) - Income-Producing Purpose
to deduct applicable home expenses, individual shareholder must charge rent to corporation using home office
Summary Under
Tax Topics - Income Tax Act - Section 45 - Subsection 45(1) - Paragraph 45(1)(c)
incidental rental use of home does not result in part disposition

Principales Questions: (1) Peut-on remplir un T2200 pour l'utilisation du local de travail par la société au domicile de l'actionnaire? / Can form T2200 be completed for the use of an office by the corporation in the shareholder's residence?
(2) L'actionnaire peut-elle déduire des dépenses relativement au bureau loué à la société dans sa déclaration de revenu?/ Can the shareholder deduct any expenses related to the workspace rented to the corporation ?
(3) Quel serait l'impact sur l'exemption pour gain en capital au titre d'une résidence principale si la société payait un loyer à l'actionnaire? / What are the impact on the capital gain exemption should the corporation pay rent to the shareholder?

Position Adoptée: 1) Puisque c'est la société qui utilise le bien, le formulaire T2200 n'a pas à être complété. / Since the corporation uses the workspace, the T2200 form is not required.
2) Si l'actionnaire tire un revenu de loyer, elle pourra déduire les dépenses afférentes à la pièce louée à la société. / If the shareholder generates income from the rental of the office to the corporation, the shareholder will be able to deduct expenses related to this office.
3) Svp vous référer à la réponse des questions 1 et 2. / Please refer to questions 1 and 2.

Raisons: 1) 8(10); 8(13)
2) 67, 9(1), 18(1)a); Guide T4036

15 October 2013 External T.I. 2013-0498001E5 F - Transfert de sommes inutilisées entre régimes

CRA Tags
248(1) private health services plan, 118.2(2)
Summary Under
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Private Health Services Plan
transfer from individual healthcare spending account to another PHSP is permitted

Principales Questions: Est-ce possible de transférer des sommes inutilisées d'un compte de gestion santé à un régime privé d'assurance santé ou à un régime d'assurance collective, sans que le compte de gestion santé ne perde son statut de régime privé d'assurance santé?/ Is it possible that unused amounts of a healthcare spending account be transferred to a private health services plan or a collective insurance plan, without affecting the status of the healthcare spending account as a private health services plan?

Position Adoptée: Possiblement à un régime privée d'assurance-maladie, mais non à un régime d'assurance-collective./ Possibly to a private health services plan but not to a collective insurance plan.

Raisons: Position du Bulletin d'interprétation IT-529 (paragraphes 15 et 17)./ position of interpretation bulletin IT-529 (paragraphs 15 and 17).

8 October 2013 External T.I. 2011-0428931E5 F - Assurance-invalidité

CRA Tags
20(1)(e), 18(1)(h), 18(1)(b), 18(1)(a), 20(1)(e.2), 20(1)(e.1), 248(1)
Summary Under
Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(a) - Income-Producing Purpose
non-deductibility of disability insurance premiums
Summary Under
Tax Topics - Income Tax Act - Section 9 - Exempt Receipts/Business
proceeds received as a result of business credit card insurance were not income

Principales Questions: Est-ce que les montants payés par la société d'assurance en vertu des deux contrats d'assurance invalidité doivent être ajoutés dans le revenu de l'actionnaire invalide ou de la société? Les primes payées par la société sont-elles déductibles dans le calcul de son revenu d'entreprise?
What are the tax implications for the corporation and/or the shareholder receiving an insurance benefit from the two disability insurance policies? Whether the premiums paid by the corporation under the two disability insurance policies are deductible?

Position Adoptée: Les primes payées à l'égard des deux polices d'assurance-invalidité ne sont pas déductibles et les prestations reçues ne sont pas imposables. The insurance benefits with respect to the two insurance policies are not taxable and the premiums paid are not deductible.

Raisons: Loi de l'impôt sur le revenu, positions antérieures et jurisprudence. Income Tax Act, previous positions and case law.

Conference

11 October 2013 APFF Roundtable, 2013-0495631C6 F - Actions admissibles de petites entreprises

CRA Tags
248(1), 110.6(15)
Summary Under
Tax Topics - Income Tax Act - 101-110 - Section 110.6 - Subsection 110.6(1) - Qualified Small Business Corporation Share
failure to satisfy the 50% test for even a moment in time will disqualify
Summary Under
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Small Business Corporation
90% is generally a safe harbour, and in a particular context CRA may accept lower than 90%
Words and Phrases
substantially all

Principales Questions: Est-ce que la position de l'ARC a évolué à la lumière des jugements rendus ces dernières années et de l'interprétation technique de 2007 ou elle est toujours à l'effet qu'un niveau de 90% ou plus doit être atteint? Will CRA's position evolve following the jurisprudence and the 2007 technical interpretation or is the "all or substantially all" test still imply a 90% threshold?

Position Adoptée: Nous ne croyons pas qu'il soit nécessaire de modifier notre position administrative à la lumière des décisions rendues par les tribunaux jusqu'à maintenant. We do not believe that it is necessary to modify our administrative position following the decisions reached by the tribunals.

Raisons: Voir lettre ci-dessous. See letter below.

11 October 2013 APFF Roundtable, 2013-0495641C6 F - Taux de rendement annuel moyen

CRA Tags
110.6(9), 110.6(8)
Summary Under
Tax Topics - Income Tax Act - 101-110 - Section 110.6 - Subsection 110.6(9)
average annual rate of return on estate freeze hi-low prefs based on redemption amount, not PUC

Principales Questions: Est-ce que le taux de rendement annuel moyen doit être calculé en utilisant le capital versé des actions initialement acquises ou en utilisant la valeur de rachat des actions privilégiées émises lors d'une gel? Does the calculation of the average annual rate of return take into consideration the paid-up capital of the shares intially acquired or the commuted value of the preferred shares in a freeze?

Position Adoptée: Voir lettre ci-dessous. See letter below.

Raisons: Voir lettre ci-dessous. See letter below.
(Veuillez noter que le document ACC9311 fait référence au 9014615 et le document FE91_147.149 fait référence au 9031715.)

11 October 2013 APFF Roundtable, 2013-0495691C6 F - Clause restrictive

CRA Tags
56.4
Summary Under
Tax Topics - Income Tax Act - Section 56.4 - Subsection 56.4(1) - Eligible Interest
must be one, rather than more than one, underlying corp
Summary Under
Tax Topics - Income Tax Act - Section 56.4 - Subsection 56.4(3) - Paragraph 56.4(3)(c)
non-solicitation clause/divergence of covenanter and seller
Summary Under
Tax Topics - Income Tax Act - Section 56.4 - Subsection 56.4(7) - Paragraph 56.4(7)(b)
non-solicitation clause could be treated as part of a non-compete
Summary Under
Tax Topics - Income Tax Act - Section 56.4 - Subsection 56.4(7) - Paragraph 56.4(7)(f)
maintenance of Holdco fmv/divergence of seller and covenanter

Principales Questions: Dans le contexte particulier, ou un particulier vend des actions d'une société de gestion dont il est l'unique actionnaire et qui accorde une clause restrictive, est-ce que les exceptions au paragraphe 56.4(2) de la Loi de l'impôt sur le revenu (la Loi), qui sont prévues a) au paragraphe 56.4(7) de la Loi ou b) au paragraphe 56.4(3) de la Loi, s'appliquent?/ In a situation where an individual sells shares of a management corporation of which he is the sole shareholder, and where he gives a restrictive covenant, do the exception of subsections 56.4(2) of the Income Tax Act (the Act), which are indicated at a) subsection 56.4(7) or b) subsection 56.4(3), apply?
c) Quel est l'incidence d'une engagement de non-sollicitation par rapport aux exceptions prévues au paragraphe 56.4(7) ou au paragraphe 56.4(3) de la Loi?/ What is the impact of a non-solicitation clause with respect to the exceptions indicated at subsection 56.4(7) or 56.4(3) of the Act?
d) Dans le contexte ou une société de gestion vend des actions de deux sociétés exploitant une entreprise alors que son unique actionnaire accorde une clause restrictive, est-ce que les exceptions prévues aux paragraphes 56.4(3) et 56.4(7) de la Loi s'appliquent?/In a situation where a management corporation sells shares of two corporations which has businesses and the unique shareholder of the management corporation gives a restrictive covenant, do the exceptions of subsections 56.4(3) and 56.4(7) of the Act apply?

Position Adoptée: a) Dépendamment si toutes les conditions du paragraphe 56.4(7) de la Loi sont respectées./ Depending if all the conditions of subsection 56.4(7) of the Act are respected.
b) Les conditions du paragraphe 56.4(3) de la Loi ne sont pas respectées./ All the conditions of subsection 56.4(3) of the Act are not respected.
c) Commentaires généraux/ General comments.
d) Les conditions du paragraphe 56.4(3) de la Loi ne sont pas toutes respectées. Cependant, les conditions du paragraphe 56.4(7) de la Loi pourraient être respectées./ Not all the conditions of subsection 56.4(3) of the Act are respected. However, conditions of subsection 56.4(7) of the Act may all be respected.

Raisons: Le libellé de la Loi/ The writing of the legislation.

11 October 2013 APFF Roundtable, 2013-0496511C6 F - Actions prescrites

CRA Tags
ITR 6205(2), ITR 6205(4), 110.6(8)
Summary Under
Tax Topics - Income Tax Regulations - Regulation 6205 - Subsection 6205(2)
simultaneous freezes by arm's length shareholders for their respective families to not qualify because the respective trusts/beneficiaries are not NAL with each freezor

Principales Questions: a) Dans des situations particulières, des actions qui sont émises à plusieurs actionnaires dans le cadre de transactions de gel se qualifient-elles d'actions prescrites au sens du paragraphe 6205(2) du Règlement de l'impôt sur le revenu (Règlement)? / In particular situations, do shares which are issued to various shareholders in a freeze transaction, qualify as prescribed shares pursuant to subsection 6205(2) of the Income Tax Regulations (Regulations)?
b) Dans une situation ou plusieurs actionnaires procèdent à un gel, qui doit être considéré comme le premier actionnaire aux fins du paragraphe 6205(2) du Règlement? / In a situation where many shareholders proceed to a freeze, who will be the original holder pursuant to subsection 6205(2) of the Regulations?

Position Adoptée: a) Question de fait. Commentaires généraux. / Question of fact. General comments.
b) Chaque auteur du gel. / Each author of a freeze.

Raisons: a) Application de l'alinéa 6205(2)a) et de l'alinéa 6205(4)c) du Règlement. / Application of subsections 6205(2)a) and 6205(4)c) of the Regulations.
b) Application de l'alinéa 6205(2)a) du Règlement/ Application of paragraph 6205(2)a) of the Regulations.

11 October 2013 APFF Roundtable, 2013-0495771C6 F - Late eligible dividend designation

CRA Tags
89(14.1)
Summary Under
Tax Topics - Income Tax Act - Section 89 - Subsection 89(14.1)
late designation generally available where CRA, contrary to grounded expectations, denied small business deduction status thereby retroatively creating GRIP/late designation cannot be used to delay GRIP computation

Principal Issues: Whether it would be just and equitable to accept a late eligible dividend designation after March 28, 2012 in the following circumstances:
(1) A corporation paid a capital dividend. After a review by the CRA, the CDA is reduced. Therefore, the capital dividend paid is higher than the CDA and the excess is subject to Part III tax. If the shareholders elect to consider the excess as a taxable dividend, the corporation wishes to make a late eligible dividend designation.
(2) A corporation that claimed the small business deduction is audited by the CRA. The CRA found that the corporation's business is a personal services business. Therefore, the amount of GRIP is increased. The corporation wishes to make a late eligible dividend designation.

Position: A request for a late eligible dividend designation should be addressed to the Tax Services Office or the Taxation Center. The analysis will be done on a case-by-case basis. The responsible person in the TSO or the TC will review all the relevant facts and circumstances with respect to each situation. However, with respect to the two examples described in the question, the CRA has established certain criteria to be met in order for the Minister to exercise her discretionary powers under subsection 89(14.1) (see below).

Reasons: Question of fact.

11 October 2013 APFF Roundtable, 2013-0495671C6 F - Déduction d'une partie d'une créance irrécouvrable

CRA Tags
20(1)(p), 20(1)(p)(i), 50(1)(a)
Summary Under
Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(p) - Subparagraph 20(1)(p)(i)
20(1)(p)(i) deduction for trade debts of a customer are determined on a receivable by receivable basis
Summary Under
Tax Topics - Income Tax Act - Section 50 - Subsection 50(1)
comparison of 20(1)(p)(i) and 50(1): latter requires full uncollectibility

Principales Questions: a) L'ARC peut-elle préciser en quoi le libellé du sous-alinéa 20(1)p)(i) L.I.R. justifie une interprétation différente du libellé de l'alinéa 50(1)a) L.I.R. à l'égard de la notion de « créance irrécouvrable », notamment en ce qui concerne l'admissibilité d'une partie de la créance comme « créance irrécouvrable »? / Can the CRA explain why subparagraph 20(1)p)(i) should be interpreted in a different way than paragraph 50(1)a) regarding the words « bad debts », namely on whether part of the debt can be considered a « bad debt »?
b) L'ARC peut-elle préciser en quoi le libellé du paragraphe 50(1) L.I.R. ne permet pas à un contribuable de faire ce choix à l'égard d'une fraction de créance reconnue comme irrécouvrable, et ce, à la lumière de la réponse donnée à cette même Table ronde du Congrès 1994 de l'APFF? Can the CRA explain why the wording of subsection 50(1) does not allow a taxpayer to make an election for part of a bad debt considering the answer provided in the 1994 round table?
c) Ne suffirait-il pas à cet égard de simplement disposer à un coût nul la fraction de la créance jugée irrécouvrable? Would it not be possible to dispose part of a bad debt at a nil cost?

Position Adoptée: a) L'alinéa 20(1)p)(i) vise les créances de revenus, comme un compte client d'une entreprise. Chacun des achats porté au compte client est une partie d'une créance. / Subparagraph 20(1)p)(i) refers to debts related to accounts receivable. Each transaction for a particular account is considered as part of the debt.
b) Si une créance visée à l'alinéa 50(1)a) L.I.R. est réglée en partie et que le créancier établit que le solde dû est irrécouvrable, le choix du paragraphe 50(1) L.I.R. pourra se faire à l'égard de la portion irrécouvrable./ If a debt under section 50(1)a) is partially settled and the creditor establishes that the balance is unrecoverable, the election under 50(1) will be permitted for the unrecoverable part.
c) Voir les explications précédentes. / Please refer to A) and B).

Raisons: a) 20(1)p)(i), IT-442, Hogan c. MRN, 56 DTC 183
b) 50(1), IT-159R3
c) Voir a) et b) / See A) and b)

11 October 2013 APFF Roundtable, 2013-0495681C6 F - Bien de remplacement

CRA Tags
248(1), 44, 44(5)(b)
Summary Under
Tax Topics - Income Tax Act - Section 44 - Subsection 44(5) - Paragraph 44(5)(b)
a different related person can use the replacement property in a similar business

Principales Questions: 1) Le critère prévu à 44(5)b) peut-il s'appliquer si le bien de remplacement est utilisé par une société qui n'est pas liée à la société qui était propriétaire de l'ancien bien d'entreprise? / Is the condition under paragraph 44(5)b) satisfied if a replacement property is used by a corporation non related to the corporation who owned the former property?
2) Le critère prévu à 44(5)b) est-il rencontré si le bien de remplacement est utilisé par une société liée à la société qui était propriétaire de l'ancien bien, mais qui n'est pas la société qui utilisait l'ancien bien d'entreprise? / Is the condition under paragraph 44(5)b) satisfied if the replacement property is used by a corporation which was related to the corporation who owned (without using it) the former property?

Position Adoptée: Pour que le critère prévu à l'alinéa 44(5)b) LIR soit rencontré, la personne qui utilise le bien de remplacement doit être liée à la personne qui est propriétaire du bien. Bien que la personne qui utilise le bien de remplacement puisse être différente de la personne qui utilisait l'ancien bien d'entreprise, il faut que ces deux personnes exploitent une entreprise similaire et que le bien soit utilisé pour des fins similaires. / In order to satisfy the condition under paragraph 44(5)b), the person who uses the replacement property must be related to the person who own the property. These two persons must operate a same or similar business and the property must be used for similar purposes.

Raisons: 44(5)b)

10 June 2013 STEP Canada Roundtable, 2013-0480271C6 - Prescribed Rate Loan - 2013 STEP Roundtable Q 2

CRA Tags
74.5
Summary Under
Tax Topics - Income Tax Act - Section 74.5 - Subsection 74.5(2)
locking in prescribed rate

Principal Issues: Can the current low prescribed rate be locked in for a long period of time for the purposes of 74.5?

Position: Yes

Reasons: The interest rate is set at the time of the transfer of property.

Technical Interpretation - Internal

12 December 2013 Internal T.I. 2013-0497231I7 - Penalties on Foreign Asset Reporting

CRA Tags
152(4), 162(7), 162(10), 152(3.1), 163(2.4)., 162(10.1)
Summary Under
Tax Topics - Income Tax Act - Section 152 - Subsection 152(4)
S. 152(4)(a) applies to Part XV returns
Summary Under
Tax Topics - Income Tax Act - Section 162 - Subsection 162(10.1)
normal reassessment period does not apply
Summary Under
Tax Topics - Income Tax Act - Section 162 - Subsection 162(10)
normal reassessment period does not apply
Summary Under
Tax Topics - Income Tax Act - Section 162 - Subsection 162(7)
s. 152(4)(a) applies to Part XV returns

Principal Issues: What are the time limitations for assessing a penalty on foreign asset reporting?

Position: 1. If liable to a penalty under subsection 162(7), the assessment must be made within the normal reassessment period, unless one of the exceptions in subsection 152(4) is applicable. If that taxation year has never been assessed, the penalty may be assessed at any time.
2. If liable to a penalty under subsection 162(10) or (10.1), the penalty may be assessed at any time.

Reasons: The penalties are assessed under Part I and are subject to the same limitations as any other assessment under that Part.

12 November 2013 Internal T.I. 2013-0497611I7 F - Feuillet T1204

CRA Tags
ITR 237(2), ITR 237(1)
Summary Under
Tax Topics - Income Tax Regulations - Regulation 237 - Subsection 237(2)
T1204 disclosure applicable only where contract with federal supplier and includes travel reimbursements as “services” consideration
Words and Phrases
service

Principales Questions: 1) Le remboursement des frais de voyages des consultants externes doivent-ils être inclus sur le formulaire T1204./ Should travel expenses reimbursed to external consultants be included on the T1204 form? 2) Est-ce que le remboursement des frais de voyage est un paiement en contrepartie de la vente ou location de marchandises ou de la prestation de services? / Is the reimbursement of travel expenses a payment in consideration for the sale or lease of goods or for services rendered?

Position Adoptée: 1) Question de fait mais en l'espèce oui. / Question of fact but in the present case yes. 2) Question de fait mais en l'espèce oui. / Question of fact but in the present case yes.

Raisons: Texte de loi et anciennes position / Wording of the act and previous postion.

15 October 2013 Internal T.I. 2013-0491951I7 F - Travaux en cours au moment du retrait d'un associé

CRA Tags
34.1(1), 249.1(4), 34
Summary Under
Tax Topics - Income Tax Act - Section 34
no new s. 34 election required if s. 98(6) or (5) applies/election can be made in income reconciliation

Principales Questions: Si le choix de l'article 34 pouvait être fait à l'égard des TEC de XXXXXXXXXX et ce, à l'encontre du revenu de XXXXXXXXXX pour l'exercice se terminant le 11 juillet de l'année 1? Could the section 34 election be permitted for the work in progress for XXXXXXXXXX against XXXXXXXXXX's income for the period ending July 11 of year 1?

Position Adoptée: Oui. Yes.

Raisons: Voir lettre ci-dessous. See letter below.