Income Tax Severed Letters - 2015-10-07

Technical Interpretation - External

8 September 2015 External T.I. 2015-0584221E5 - T4A requirement- elementary scholarships

CRA Tags
ITR 200(2)
Summary Under
Tax Topics - Income Tax Regulations - Regulation 200 - Subsection 200(2)
T4A requirement even where full scholarship exemption

Principal Issues: Whether a school is required to issue T4A slips for scholarships paid out to elementary and secondary level students.

Position: Yes.

Reasons: Subsection 200(2) of the Income Tax Regulations.

24 August 2015 External T.I. 2015-0584181E5 - Eligible Travel costs for the METC

CRA Tags
118.2(2)(g)(h), 118.2(2)(g)

Principal Issues: Whether travel and associated costs incurred from home to hospitals for the medical care of a child would be an eligible medical expense for purposes of the medical expense tax credit?

Position: Question of fact

Reasons: Legislation

20 August 2015 External T.I. 2015-0581681E5 F - Non-resident trust rules

CRA Tags
94(3), 94(8.1), 94(1), 94(8.2)
Summary Under
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Corporation
Liechtenstein Foundation a trust
Summary Under
Tax Topics - Income Tax Act - Section 94 - Subsection 94(1) - Connected Contributor
Liechtenstein Foundation with Canadian-resident beneficiary not subject to s. 94(3)

Principales Questions: Whether, in a specified period of time, a particular Liechtenstein foundation (the "Entity") is a deemed resident trust for Canadian tax purposes?

Position Adoptée: Likely no.

Raisons: Throughout the specified period, the Entity never had a resident contributor or a resident beneficiary, as required under subsection 94(3). It is a question of fact as to whether a foreign foundation is considered a trust for Canadian tax purposes. However, based on our long standing position, a Liechtenstein Foundation is generally considered a trust for the application of the Act.

17 July 2015 External T.I. 2014-0517081E5 - Assistance for individuals with disabilities

CRA Tags
56(1)(r), ITR 233(2), 56(1)(u), 110(1)(f)
Summary Under
Tax Topics - Income Tax Act - Section 56 - Subsection 56(1) - Paragraph 56(1)(r)
federal assistance to those with disabilities
Summary Under
Tax Topics - Income Tax Act - Section 56 - Subsection 56(1) - Paragraph 56(1)(u)
federal assistance to those with disabilities

Principal Issues: Are amounts received by individuals with disabilities under the Program, for communication, hearing and assistive tools, special assessments paid to third parties, payments relating to ergonomic equipment (such as special keyboards and chairs), and assistive technical training supports (such as speech recognition software) taxable to the recipient?

Position: Question of fact

Reasons: Where the funding is provided through a program that is established under the Canada-XXXXXXXXXX Labour Market Development Agreement, the amounts appear to meet the criteria of subparagraph 56(1)(r)(iii) and would be included in income under that provision. Where the funding is provided from other programs, the amounts would likely be considered social assistance under paragraph 56(1)(u) of the Act, but is not included in income if the assistance falls under one of the exemptions found in Regulation 233(2)

17 July 2015 External T.I. 2014-0517091E5 - Wage Subsidies

CRA Tags
5(1), 56(1)(r)(iii), 56(1)(r)(i)
Summary Under
Tax Topics - Income Tax Act - Section 56 - Subsection 56(1) - Paragraph 56(1)(r)
wage subsidies or supplements to disabled

Principal Issues: Does paragraph 56(1)(r) of the Act apply to financial assistance received under a wage subsidy program for other support amounts such as living supports, dependent care, transportation, etc.

Position: It is a question of fact.

Reasons: Where the funding is provided through a program that is established under the Canada-XXXXXXXXXX Labour Market Development Agreement, the amounts appear to meet the criteria of subparagraph 56(1)(r)(iii) and would be included in income under that provision. Where the funding is provided from other programs and are earning supplements under a project sponsored by a government in Canada to encourage individuals to obtain or keep employment, the amounts would be included in income under 56(1)(r)(i). Otherwise, the amounts could be considered social assistance and included in income under 56(1)(u).

Technical Interpretation - Internal

22 June 2015 Internal T.I. 2014-0553731I7 - Deduction of Terminal Loss - Wind-up

CRA Tags
88, 20, (13)
Summary Under
Tax Topics - Income Tax Act - Section 13 - Subsection 13(7) - Paragraph 13(7)(a)
property remaining idle after deemed acquisition as depreciable property not a change of use
Summary Under
Tax Topics - Income Tax Act - Section 20 - Subsection 20(1)
deemed depreciable property in fact not used for income-producing purpose
Summary Under
Tax Topics - Income Tax Regulations - Regulation 1102 - Subsection 1102(14)
depreciable property of sub deemed to be depreciable property when acquired by parent

Principal Issues: Whether the Terminal Loss was deductible under subsection 20(16) in computing Parentco's income for purposes of the Act.

Position: The Terminal Loss should be allowed as a deduction in computing Parentco's income in its XXXXXXXXXX taxation year by virtue of subsection 20(16).

Reasons: Parentco should be entitled to deduct the Terminal Loss based on a textual, contextual and purpose interpretation of the relevant provisions, on case law and on previous CRA positions.