Income Tax Severed Letters - 2016-05-11

Ministerial Correspondence

26 February 2016 Ministerial Correspondence 2015-0616861M4 - Attendant Care, Disability Tax Credit, OAS

CRA Tags

Principal Issues: 1. General information on tax issues impacting taxes payable by seniors.

Position: See below.

Reasons: See below.

Technical Interpretation - External

31 March 2016 External T.I. 2014-0524391E5 F - Debt parking

CRA Tags
80.01(6), 80.01(7), 80.01(8), 40(2)(e.1), 53(1)(f.1)
debt parking rule can apply even if no capital loss is recognized
application of s. 53(1)(f.1) subsequent to application of debt parking rule

Principal Issues: Application of 80.01(8) to the disposition of a debt obligation between parties that are related to each other pursuant to 251(5)(b), taking into account the application of 40(2)(e.1) and 53(1)(f.1).

Position: The ACB adjustment under 53(1)(f.1) takes place a moment after the disposition whereas the deemed settlement under 80.01(8) is based on the ACB of the debt at the time of the disposition/acquisition. Thus, 80.01(8) could produce a forgiven amount in these circumstances.

Reasons: Based on a textual, contextual and purposive interpretation of the Act.

17 March 2016 External T.I. 2015-0614121E5 - living allowance at a special work site

CRA Tags
6(6), 6(1)(b)

Principal Issues: Does an allowance for board and lodging qualify for the special work site exemption?

Position: Question of fact

Reasons: See response

15 March 2016 External T.I. 2015-0606911E5 F - Home Accessibility Tax Credit

claimant must be a qualifying or eligible individual

Principales Questions: Can the Home Accessibility Tax Credit (HATC) be claimed if the individual who makes or incurs the expenses is not a qualifying individual or an eligible individual?

Position Adoptée: No.

Raisons: To be a qualifying expenditure of a qualifying individual or an eligible individual, the expense must be made or incurred by either of those individuals. This position is supported by the special rule set out in subsection 118.041(2) which provides that an outlay or expense made or incurred by a cooperative housing corporation, condominium corporation, a syndicate of co-workers, or by a trust may qualify as qualifying expense of the qualifying individual or the eligible individual.

5 January 2016 External T.I. 2013-0515771E5 F - Établissement semblable agréé

CRA Tags
37(1)(a)(ii)(B), 37(7)

Principales Questions: Est-ce que l’entité peut obtenir le statut d’ « établissement semblable agréé » aux fins de la division 37(1)a)(ii)(B) de la Loi ? / Whether the entity may obtain the status of « other similar institution » as per clause 37(1)a)(ii)(B) ?

Position Adoptée: Non/ No

Raisons: L’une des exigences énoncée dans « La Politique sur les paiements à des tiers », veut que l’entité ne doit exercer que des activités qui sont indiscutablement des activités de RS&DE. Cette exigence n’est pas respectée. / One of the criteria stated in the "Third-Party Payments Policy" requires that the entity must carry on only activities that are unquestionably SR&ED activities. This requirement is not met.

24 August 2015 External T.I. 2015-0589841E5 - Financial instrument as a debt obligation

CRA Tags

Principal Issues: Whether a financial instrument with certain contingency conditions could represent a debt obligation?

Position: Question of fact.

Reasons: Previous rulings.

11 August 2015 External T.I. 2014-0527291E5 F - Remboursement de frais médicaux-CIMAD

CRA Tags
Quebec Tax Credit for Home-Support Services for Seniors does not reduce METC
correction in CRA position not applied on a retroactive basis

Principales Questions: 1- Est-ce que la position de l'ARC énoncée dans l'interprétation technique 2001-0113237 est toujours valable suite au changement de position énoncée dans l'interprétation technique 2013-0490901I7? / Whether the position stated in document 2001-0113237 is still valid following the change in position stated in document 2013-0490901I7? 2- Un particulier ayant traité le CIMAD comme un remboursement aux fins du crédit pour frais médicaux peut-il amender ses déclarations de revenus des 10 dernières années? / Can a taxpayer, who has previously considered the Tax Credit for Home-Support Services for Seniors (CIMAD) as a reimbursement for the purpose of medical expense tax credit, correct their income tax return for the 10 previous years? 3- Est-ce que les crédits d'impôt remboursables du Québec, tels que le CIALB et CISUT, sont considérés comme des remboursements aux fins de l'alinéa 118.2(3)b)? / Are Quebec provincial refundable tax credit as the Refundable Tax Credit for the Purchase or Rental of Equipment to Help Seniors Continue Living Independently at Home (CIALB) and the Refundable Tax Credit for Seniors for Stays in Functional Rehabilitation Transition Units (CISUT) considered reimbursements under paragraph 118.2(3)(b)?

Position Adoptée: 1- Non. / No. 2- À l'intérieur de la période normale de nouvelle cotisation, le particulier pourrait demander un redressement des déclarations de revenus déjà produites pour les années 2013 et 2014. / Inside the normal reassessment period, a taxpayer could request a correction of their income tax return for the tax return already filed for 2013 and 2014. 3- Le CIALB et le CISUT ne seront généralement pas considérés comme un « remboursement » aux fins de l’alinéa 118.2(3)b)./ CIALB and CISUT will generally not be considered to be a reimbursement for the purpose of paragraph 118.2(3)(b).

Raisons: Voir ci-dessous. See below.

5 March 2015 External T.I. 2014-0551921E5 - Agricultural co-op patronage dividends

CRA Tags

Principal Issues: Will the entity cease to be exempt from income tax if it changes its by-laws to permit the payment of patronage dividends to its members?

Position: The change of by-laws is inconsequential. But the entity will cease to be exempt if, at time of payment, the patronage dividend includes an amount of income.

Reasons: Patronage dividend may include an amount of income. However, the simple return of members' contributions or adjustment to cost of goods and services provided to members for the year, would not be considered payment of income.

Technical Interpretation - Internal

7 March 2016 Internal T.I. 2015-0572461I7 - Foreign tax deduction

CRA Tags
20(11), 20(12), 126(7)
deduction available re U.S. corporate tax paid by US LP on active business earnings of dividend-paying transparent LLCs

Principal Issues: Whether in the particular situation described, a Canadian resident individual is entitled to a deduction under subsections 20(11) and 20(12) of the Act in respect of the U.S. taxes paid by a partnership in which the individual is an indirect member.

Position: Yes.

Reasons: Since no deduction under subsection 20(12) was claimed by a partnership, the individual is entitled to a deduction under subsections 20(11) and 20(12).

8 July 2015 Internal T.I. 2015-0576281I7 - Recognition of a nominee/agency relationship

CRA Tags

Principal Issues: Comments provided to GST/HST Ruling Directorate with respect to the recognition of a nominee/agency relationship.

Position: General comments.

Reasons: Case law and previous positions.