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
Summary Under
Tax Topics - Income Tax Act - Section 34.1 - Subsection 34.1(1)
retroactive effect of s. 96(1.1) agreement to require s. 34.1(1) inclusion
Summary Under
Tax Topics - Income Tax Act - Section 96 - Subsection 96(1.1)
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)
Summary Under
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Dividend
redemption premium is proceeds
Summary Under
Tax Topics - Income Tax Act - Section 90 - Subsection 90(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
110.7(1)(a)
Summary Under
Tax Topics - Income Tax Act - 101-110 - Section 110.7 - Subsection 110.7(1)
northern resident travel allowance

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)
Summary Under
Tax Topics - Income Tax Regulations - Regulation 201 - Subsection 201(1)
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
Summary Under
Tax Topics - Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(t)
federal apprenticeship job creation tax credit
Summary Under
Tax Topics - Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(x)
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
Summary Under
Tax Topics - Income Tax Act - Section 80 - Subsection 80(2) - Paragraph 80(2)(a)
meaning of "settle"
Summary Under
Tax Topics - Income Tax Act - Section 80.01 - Subsection 80.01(8)
s. 50 write-down triggers deemed forgiveness

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)
Summary Under
Tax Topics - Income Tax Act - Section 118.2 - Subsection 118.2(2) - Paragraph 118.2(2)(l.2)
emergency power generator

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)
Summary Under
Tax Topics - Income Tax Act - Section 40 - Subsection 40(3.6)
s. 40(3.6) does not apply to winding-up
Summary Under
Tax Topics - Income Tax Act - Section 93 - Subsection 93(2.01)
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)
Summary Under
Tax Topics - Income Tax Act - Section 111 - Subsection 111(1) - Paragraph 111(1)(b)
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.