Income Tax Severed Letters - 2014-02-19

Ruling

2013 Ruling 2013-0507161R3 - Supplemental to Ruling 2011-040898

CRA Tags
66.1(6) "Canadian exploration expense" (g)

Principal Issues: Request for confirmation from CRA that events subsequent to the issuance of advance income tax ruling 2011-040898 would not affect the ruling and the opinion given.

Position: The subsequent events do not affect the validity of the ruling given.

Reasons: See below.

Technical Interpretation - External

4 February 2014 External T.I. 2013-0489791E5 - Indian Business Income Conversion to Employment

CRA Tags
81(1)(a)

Principal Issues: Whether the employment income of an Indian sole proprietor would be exempt income under Guideline 2?

Position: Likely not.

Reasons: Residence of employer may not be strong connecting factor in this case.

19 December 2013 External T.I. 2012-0468851E5 F - Deduction for Insolvency

CRA Tags
80(16), 61.3(3), 61.3(1)
Summary Under
Tax Topics - Income Tax Act - Section 61.3 - Subsection 61.3(3)
maximizing deduction through debt parking with parent rather than simple settlement subject to s. 61.3(3)

Principales Questions: In the particular situation, whether a debt parking situation would give a more favorable result with respect to the application of subsection 63.1(1) to a particular corporation resident in Canada rather than a direct settlement of the debt by the particular corporation.

Position Adoptée: Likely no.

Raisons: General comments with respect to the discretionary power provided to the Minister under subsection 80(16) where an amount would be otherwise deducted under section 61.3, GAAP and the anti-avoidance rule provided under subsection 61.3(3).

18 December 2013 External T.I. 2013-0511101E5 F - Substantial interest - Part VI.1

CRA Tags
191(2), 191(3), 245(2)
Summary Under
Tax Topics - Income Tax Act - Section 191 - Subsection 191(3)
creation of substantial interest through redemption of special voting shares
Summary Under
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Disposition
no disposition of shares that became voting by operation of law (due to cancellation of voting shares)
Summary Under
Tax Topics - Income Tax Act - Section 249 - Subsection 249(4)
voting rights shifted to 2nd trust with same trustees: no control change
Summary Under
Tax Topics - Income Tax Act - Section 251.2 - Subsection 251.2(2) - Paragraph 251.2(2)(a)
no acquisition of control where votes pass from trust to an estate with the same individuals as executors

Principales Questions: 1. Whether paragraphs 191(3)(a) and (b) apply in a particular situation. 2. Whether there is an acquisition of control of the corporation redeeming the voting shares in the particular situation.

Position Adoptée: 1. No 2. No

Raisons: 1. Wording of the Act. 2. The same persons would control the corporation before and after the redemption of the voting shares.