Income Tax Severed Letters - 2016-01-13

Ruling

2015 Ruling 2015-0582421R3 - Single-wing split-up butterfly

CRA Tags
55(3)(b), 88(1), 112(1), 245(2)

Principal Issues: Whether the butterfly dividends are exempt from the application of subsection 55(2) by virtue of paragraph 55(3)(b).

Position: Yes, favourable Rulings given.

Reasons: Complies with paragraph 55(3)(b) and previous CRA positions.

Technical Interpretation - External

16 November 2015 External T.I. 2014-0529361E5 - Spousal trust & life insurance

CRA Tags
70(6), 73(1.01), 73(1.02)
Summary Under
Tax Topics - Income Tax Act - Section 73 - Subsection 73(1.01) - Paragraph 73(1.01)(c)
funding of life insurance policy is a benefit where proceeds to be paid to non-spouse

Principal Issues: Scenario whereby income or capital from a proposed spousal trust was to be used to pay life insurance premiums on spouse's life - would this disqualify trust from ever being a spousal trust eligible for rollover of property upon creation of the trust

Position: Trust would not qualify for the rollover - would not be a "spousal trust" from inception

Reasons: We remain of the view that this would result in someone other than the spouse having use of the trust capital or income while the spouse is alive.

16 November 2015 External T.I. 2015-0595471E5 - Partnerships & capital gains reserve

CRA Tags
96(1), 40(1)

Principal Issues: Is a capital gains reserve under subparagraph 40(1)(a)(iii) claimed at the partner or partnership level?

Position: Partnership level.

Reasons: Based on wording of the provisions.

30 October 2015 External T.I. 2015-0599631E5 - Travel expenses

CRA Tags
8(1)(h), 8(1)(g), 67.1, 67.1(1.1)

Principal Issues: Deductibility of expenses for meals and rental accommodations of XXXXXXXXXX truck drivers.

Position: No.

Reasons: Legislation.

14 October 2015 External T.I. 2015-0582091E5 - Northern residents deductions

CRA Tags
110.7(1)(b)

Principal Issues: Whether an extended absence from a prescribed zone would preclude an individual from qualifying for the northern residents deductions?

Position: See response.

Reasons: See response.

2 October 2015 External T.I. 2012-0463801E5 F - Déduction pour gain en capital – permis de pêche

CRA Tags
110.6
Summary Under
Tax Topics - Income Tax Act - 101-110 - Section 110.6 - Subsection 110.6(1.3) - Paragraph 110.6(1.3)(b)
para. (b) test need only be satisfied at end of 24-month period

Principales Questions: Est-ce que le libellé de la division 110.6(1.3)a)(ii)(B) fait en sorte qu’une société, pour être une société visée au sous-alinéa a)(iv) de la définition de bien agricole ou de pêche admissible prévue au paragraphe 110.6(1) aux fins de la division 110.6(1.3)a)(ii)(B), doit, tout au long d’une période d’au moins 24 mois, respecter le test prévu à l’alinéa b) de la définition d’action du capital-actions d’une société agricole ou de pêche familiale du paragraphe 110.6(1)?
Whether the wording of clause 110.6(1.3)(a)(ii)(B) result that a corporation, to be a corporation referred to in subparagraph (a)(iv) of the definition of qualified farm or fishing property in subsection 110.6(1) for the purposes of clause 110.6(1.3)(a)(ii)(B), has to, throughout a period of at least 24 months, respect the test of paragraph (b) of the definition of share of the capital stock of a family farm or fishing corporation in subsection 110.6(1).

Position Adoptée: Non. No.

Raisons: La Loi. The Act.

28 July 2015 External T.I. 2015-0585431E5 F - Frais juridiques

CRA Tags
42(1)(b)
Summary Under
Tax Topics - Income Tax Act - Section 42 - Subsection 42(1) - Paragraph 42(1)(b)
legal expenses incurred by property vendor deemed to reduce proceeds or generate capital loss under s. 42(1)(b)

Principales Questions: Les frais juridiques pour se défendre dans une action en vices cachés suite à la disposition d’une propriété à revenus sont-ils déductibles? Si oui, qu’en est-il si on doit se défendre plusieurs années après avoir vendu la propriété et qu’il n’y a donc plus de revenus de location à déclarer? / Are legal fees incurred against a hidden defect lawsuit following the disposition of an income-producing property deductible? If yes, what happens if they are incurred many years after the disposition of the property and there is no more property income?

Position Adoptée: Les frais réduisent le produit de disposition pour les fins du calcul du gain en capital imposable ou de la perte en capital déductible. Les frais des années subséquentes sont des pertes en capital sur la disposition de biens pour les années où ils sont encourrus. / The fees reduce the proceed of disposition for the taxable capital gain or allowable capital loss calculation. Fees incurred during subsequent years are capital losses from the disposition of properties for the years in which they are incurred.

Raisons: La Loi. The Act.

Conference

10 October 2014 APFF Roundtable Q. 13, 2014-0538111C6 F - Boni suite à la signature d'un contrat d'appro

CRA Tags
9(1), 67
Summary Under
Tax Topics - Income Tax Act - Section 9 - Timing
Canderel and Ikea principles

Principales Questions: 1) Est-ce qu'un client qui reçoit un montant de son fournisseur suite à la conclusion d'une entente d'approvisionnement qui s'étend sur plusieurs années doit s'imposer sur le plein montant en vertu de l'article 9, et ce, même si une partie du montant n'est pas encore payée? / Is the amount received by a client as a result of a multi-year supply contract taxable under section 9 even if a part of the amount has not been paid yet?
2) Est-ce que le fournisseur peut déduire ce montant dans l'année où l'entente est conclue? / May the supplier deduct the full amount in the year which the agreement was entered into?

Position Adoptée: 1) & 2) Question de faits. / Question of facts

Raisons: 1) & 2) Nous n'avons pas toute l'information en main pour répondre à la question. Cependant, des informations générales sont fournies. / We do not have enough information to provide an answer to this question. General information provided.