Income Tax Severed Letters - 2016-01-06

Technical Interpretation - External

8 December 2015 External T.I. 2015-0610921E5 F - Associated corporations - child under 18

Summary Under
Tax Topics - Income Tax Act - Section 256 - Subsection 256(1.3)
s. 256(1.3) can apply where minor turns 18 shortly after the year's start

Principales Questions: Whether subsection 256(1.3) applies when a child is 18 years old at the end of the taxation year of a corporation to determine whether that corporation is associated with another in a taxation year.

Position Adoptée: Yes if the child was under 18 years of age at any time in the taxation year of the corporation.

Raisons: Wording of subsections 256(1) and 256(1.3).

3 December 2015 External T.I. 2015-0613761E5 F - Capital Dividend Account

CRA Tags
89(1)
Summary Under
Tax Topics - Income Tax Act - Section 89 - Subsection 89(1) - Capital Dividend Account
exempting a capital gain doubles the CDA addition

Principales Questions: Whether the full amount of the capital gain realized by a corporation as a result of an ecological gift is added to the corporation’s capital dividend account?

Position Adoptée: Yes.

Raisons: Wording of the Act.

3 December 2015 External T.I. 2015-0618981E5 - Deductibility of run-off insurance premiums

CRA Tags
18(1)(a)
Summary Under
Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(a) - Start-Up and Liquidation Costs
post-retirement insurance premiums deductible where relate to pre-retirement advice

Principal Issues: Can a retired professional deduct run-off insurance premiums from business income in the year the premiums are paid, even if the professional has ceased to carry on business in that year?

Position: Possibly.

Reasons: See below.

2 December 2015 External T.I. 2015-0619501E5 - Definition of farming

CRA Tags
248(1)
Summary Under
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Farming
breeding pets not farming

Principal Issues: Whether activities such as raising/breeding parrots for pet trade would be considered farming.

Position: No.

Reasons: See below.