Income Tax Severed Letters - 2014-10-15

Technical Interpretation - External

10 September 2014 External T.I. 2014-0522551E5 - Income for retired partner

CRA Tags
96(1.6), 96(1.1), 249.1(4), 34.1
retroactive effect of s. 96(1.1) agreement to require s. 34.1(1) inclusion
retroactive effect of agreement to require s. 34.1(1) inclusion

Principal Issues: Does section 34.1 of the Act apply in the taxation year that a partner retires if an agreement related to a partner's retirement income is made after that taxation year.

Position: Yes.

Reasons: Subsection 96(1.6) of the Act refers to the time that a taxpayer ceases to be a member of the partnership.

25 August 2014 External T.I. 2014-0528361E5 - premium on redemption of foreign affiliate shares

CRA Tags
84(3), 93(1)
redemption premium is proceeds

Principal Issues: Whether a premium on the redemption of foreign affiliate shares is a dividend

Position: In the absence of an election under paragraph 93(1) of the Income Tax Act, the redemption proceeds are treated as proceeds of disposition.

Reasons: Application of the law related to proceeds of disposition.

22 August 2014 External T.I. 2014-0528201E5 - Northern residents travel allowance

CRA Tags

Principal Issues: Whether a travel allowance provided for in a new employment contract would qualify as a benefit received in respect of travel expenses incurred by an employee for purposes of paragraph 110.7(1)(a) of the Act.

Position: Question of fact.

Reasons: See below.

15 August 2014 External T.I. 2014-0532941E5 - T5 reporting obligations

CRA Tags
ITR 201(1)(b), 215(2), 215(1), ITR 201(2)
T5s issued to brokers in whom debentures are registered

Principal Issues: Who is responsible for issuing T5 slips in respect of interest paid on debentures through agents?

Position: T5s need to be issued when interest is paid to creditor's agent and when interest is paid by creditor's agent to creditor.

Reasons: Application of section 201 of the Regulations.

15 August 2014 External T.I. 2014-0522541E5 - Application of 12(1)(x)

CRA Tags
12(1)(x), 127(5), 12(1)(t), 127(19), 127(11.1)(c.4), Ontario Corporations Tax Act 43.13
federal apprenticeship job creation tax credit
timing of receipt of apprenticeship training tax credit

Principal Issues: Whether the federal apprenticeship job creation tax credit ("AJCTC") and the Ontario apprenticeship training tax credit ("ATTC") should be included in income under paragraph 12(1)(x)?

Position: The AJCTC is generally included in income under paragraph 12(1)(t). The ATTC is generally included in income under paragraph 12(1)(x).

Reasons: AJCTC is included under 12(1)(t); no exceptions apply to ATTC

8 August 2014 External T.I. 2014-0524951E5 - Debt forgiveness; liability on dissolution

CRA Tags
80(16), 61.3(1), 160(1), BIA 2 "bankrupt", 80.01(7), 61.3(3), 248(1) "bankrupt", 80(13), 80(2)(a), 248(1) "legal representative", OBCA 238, 159(1), 80.01(6), 159(2), 50(1), 159(3), 40(2)(g)(ii), 80.01(9), 80.01(8), OBCA 237

Principal Issues: Can a 50(1) election trigger debt forgiveness?

Position: A subsection 50(1) election may satisfy some of debt parking requirements in subsection 80.01(7).

Reasons: Application of the law.

31 July 2014 External T.I. 2014-0535011E5 - Medical expenses - Generator and vehicle expenses

CRA Tags
118.2(2) (l.2), 118.2(2)(k), 118.2(2)(l.7), 118.2(2)(m), 118.2(2)

Principal Issues: 1. Whether the cost of an automatic standby generator and vehicle expenses qualify as a medical expense for the purposes of the medical expense tax credit.

Position: 1. General comments provided.

Reasons: 1. It is a question of fact.

Technical Interpretation - Internal

15 August 2014 Internal T.I. 2014-0538591I7 - FX losses on CFA wind-up

CRA Tags
84(9), 93(2.01), 40(3.6), 69(5), 88(3)
s. 40(3.6) does not apply to winding-up
no reduction under s. 93(2.01)(a) if no exempt dividend

Temporarily removed.

14 August 2014 Internal T.I. 2013-0506691I7 - Capital Losses - Health & Welfare Trusts

CRA Tags
3(b), 127.52(1), 111(1.1)(a)
deduction by health trust of net capital losses

Principal Issues: Whether a HWT is permitted to deduct net capital losses when computing taxable income under Division C and/or adjusted taxable income under Division E.1?

Position: Yes.

Reasons: See response.