Income Tax Severed Letters - 2015-02-11

Ruling

2014 Ruling 2014-0547491R3 - REIT entering into new LP

CRA Tags
122.1(1) "real or immovable property", 122.1(1) "real estate investment trust", 122.1(1) "non-portfolio property", 122.1(1) "excluded subsidiary entity", 122.1(1) "security"
Summary Under
Tax Topics - Income Tax Act - Section 122.1 - Subsection 122.1(1) - Real Estate Investment Trust
nil revenue satisfies the revenue tests/ provision of guarantee for fee not a business
Summary Under
Tax Topics - Income Tax Act - Section 122.1 - Subsection 122.1(1) - Security
call and put rights not securities

Principal Issues: 1) Whether proposed new LP would, if it were a trust, satisfy the conditions in paragraphs (a) to (d) of the REIT definition. 2) Whether the proposed Project GP would, if it were a trust, satisfy the conditions in paragraphs (a) to (d) of the REIT definition. 3) Whether the giving of the Guarantee would be viewed as carrying on a business.

Position: 1) It may. 2) It may. 3) No.

Reasons: 1) See provisos in the ruling given. 2) See provisos in the ruling given. 3) It meets the required level of integration discussed in ITTN # 34.

Technical Interpretation - External

27 January 2015 External T.I. 2014-0555511E5 - Spousal sharing of charitable gifts

CRA Tags
118.1(5), 118.1(1) "total charitable gifts"

Principal Issues: Whether the existing administrative practice to allow a gift made by an individual's will to be claimed by the deceased individual's spouse will continue to apply as of the 2016 taxation year?

Position: No.

Reasons: Legislative amendments.

13 November 2014 External T.I. 2014-0535611E5 F - Changement d'usage suivi d'un roulement

CRA Tags
73(1), 45(3), 45(1)
Summary Under
Tax Topics - Income Tax Act - Section 45 - Subsection 45(3)
s. 73(1) transfer does not trigger s. 45(3) deferred gain

Principales Questions: Est-ce que le roulement prévu au paragraphe 73(1) entraînera la constatation de la perte ou du gain en capital qui a été reporté par l'effet du choix prévu au paragraphe 45(3) lors du changement d'usage antérieur? Will the rollover provided by subsection 73(1) cause the recognition of the capital loss or gain which was reported by the effect of the election provided under subsection 45(3) at the time of the previous change of use?

Position Adoptée: Non. No.

Raisons: Le paragraphe 73(1) répute la disposition d'une immobilisation à son PBR. Subsection 73(1) deems the disposition of a capital property at its adjusted cost base.

7 November 2014 External T.I. 2014-0535591E5 F - Revenu travailleur autonome

CRA Tags
12(1)(x), 9(1), ITR 200(1)
Summary Under
Tax Topics - Income Tax Regulations - Regulation 200 - Subsection 200(1)
expense reimbursements or allowances were subject to T4A reporting

Principales Questions: 1 - Est-ce que le remboursement de dépenses diverses par une société pour le bénéfice de ses représentants qui sont des travailleurs autonomes sera pour ceux-ci du revenu d'entreprise? / Is reimbursement of expenses by a company to its self-employed agents business income for them? 2 - Si oui, ces montants devront-ils être inscrits sur un T4A? / If yes, do the amounts have to be declared on a T4A? 3 - Les représentants pourront-ils obtenir une déduction pour ces dépenses? / Will the agents be able to get a deduction for these expenses?

Position Adoptée: 1 - Oui / Yes; 2 - Oui / Yes; 3 - Question de faits / Question of facts

Raisons: 1 - Application du paragraphe 9(1) et de l'alinéa 12(1)x) / Application of subsection 9(1) and paragraph 12(1)(x); 2 - Application du paragraphe 200(1) du RIR / Application of subsection 200(1) of ITR; 3 - Application des articles 18, 20, 67.1 et autres / Application of sections 18, 20, 67.1 and others

7 November 2014 External T.I. 2014-0536261E5 F - Bien à usage personnel

CRA Tags
233.3, 54
Summary Under
Tax Topics - Income Tax Act - Section 54 - Personal-Use Property
property rented to brother at FMV rent could be PUP

Principales Questions: Dans le cas où un particulier possède un bien immobilier dans un pays étranger qui est loué à la juste valeur marchande à son frère, pour son usage ou agrément personnel, le bien est-il un bien à usage personnel et quels sont les critères servant à le déterminer? / When an individual owns a property in a foreign country that is rented at fair market value to his brother, for his personal use and enjoyment, is the property a personal-use property and what are the criteria to determine so?

Position Adoptée: Question de faits / Question of facts

Raisons: L'usage personnel doit être la principale utilisation / Personal use must be the primary use

30 October 2014 External T.I. 2014-0544201E5 - Non-profit organization

CRA Tags
159(2), 149(5), 149(1)(l)

Principal Issues: 1) Whether an association created for the purpose of providing a clubhouse & dining facility for its members will be taxed on the capital gain realized on the sale of the clubhouse. 2) Whether the Association will be exempt on the provision of the dining facility & clubhouse services to its members; 3) Whether the Association will have to submit income tax returns or information returns; 4) whether the Association is entitled to obtain a clearance certificate under subsection 159(2).

Position: 1)no; 2) yes; 3) probably not; 4) recommended for the legal representative to obtain a clearance certificate

Reasons: See letter

Technical Interpretation - Internal

19 November 2014 Internal T.I. 2014-0530911I7 F - Transfer pricing secondary adjustments

CRA Tags
247(12), 212(13.2)
Summary Under
Tax Topics - Income Tax Act - Section 247 - New - Subsection 247(12)
no secondary adjustment where downward s. 247(2) adjustment to Canadian branch expense

Principal Issues: Does subsection 247(12) apply to a payment between non-residents that is subject to Part XIII tax by virtue of subsection 212(13.2)?

Position: No.

Reasons: Subsection 212(13.2) only deems the non-resident taxpayer to be resident in Canada for the purposes of Part XIII in respect of the portion of the amount that is deductible in the computation of its taxable income earned in Canada.

28 October 2014 Internal T.I. 2014-0529981I7 - Allocation of partnership loss to a former partner

CRA Tags
96(1.01)
Summary Under
Tax Topics - Income Tax Act - 101-110 - Section 103 - Subsection 103(1)
allocation of full loss to purchasing partner at year end
Summary Under
Tax Topics - Income Tax Act - Section 80.01 - Subsection 80.01(6)
underwater debt funnelled through GP to avoid debt parking rules

Principal Issues: (i) Does s. 96(1.01) dictate the allocation of a partnership's loss to a former partner? (ii) Do the debt forgiveness or debt parking rules apply?

Position: (i) No. (ii) No

Reasons: (i) Subsection 96(1.01) provides that a former partner is deemed to be a partner at the end of the partnership's fiscal period to enable the partnership to make an allocation to that former partner. Pursuant to subsection 96(1), an allocation to a partner continues to be the partner's share of the partnership income pursuant to the agreement between the partners. (ii) There was no settlement of the particular debt for purposes of the debt forgiveness rules and there was no "specified obligation" for purposes of the debt parking rules.

October 28, 2014

15 September 2014 Internal T.I. 2014-0530981I7 F - Délai de 10 ans expiré - 152(4.2)

CRA Tags
152(4.2)
Summary Under
Tax Topics - Income Tax Act - Section 152 - Subsection 152(4.2)
10-year limitation is binding even where expiry due to judicial delay/no remission order

Principales Questions: Un contribuable peut-il demander un remboursement d'impôt en application du paragraphe 152(4.2) lorsque le délai de 10 ans a expiré dû aux délais judiciaires? Can a taxpayer ask for a tax reimbursement pursuant to subsection 152(4.2) when the 10 years delay has expired due to court delays?

Position Adoptée: Non. No.

Raisons: La Loi ne prévoit aucune exception au délai de 10 ans. The Law does not provide for any exception to the 10 years delay.

Le 15 septembre 2014