Income Tax Severed Letters - 2016-10-12

Technical Interpretation - External

3 August 2016 External T.I. 2015-0572381E5 - Employee Stock Option-CCPC Shares

Unedited CRA Tags
7(1)(a), 7(1)(b), 110(1)(d), 110(1)(d.1)
s. 7(1)(a) inapplicable where shares issued equal to in-the-money value
not available where share payment of in-the-money value
no 110(1)(d) where share payment of in-the-money value

Principal Issues: Will a 110(1)(d) or 110(1)(d.1) deduction be available where an employee is granted a stock option by a CCPC and does not exercise their right to acquire shares under the option, rather, is paid the in-the-money or intrinsic value of the option in treasury shares of the CCPC?

Position: No.

Reasons: The conditions of subparagraphs 110(1)(d)(i) and 110(1)(d.1)(i) are not satisfied.

7 July 2016 External T.I. 2015-0595481E5 - Ontario Corporate Minimum Tax – Forgiven Debt

Unedited CRA Tags
56(1), 57(1) of the Taxation Act, 2007

Principal Issues: Whether a forgiven amount is included in adjusted net income for Ontario corporate minimum tax (CMT) purposes.

Position: Yes, providing the forgiven amount is included in financial statement net income/net loss under generally accepted accounting principles.

Reasons: There are no legislated adjustments permitted to CMT adjusted net income/net loss for a forgiven amount under the Taxation Act, 2007.

30 June 2016 External T.I. 2015-0583561E5 F - Déduction pour gain en capital - contamination

Unedited CRA Tags
110.6; 248(1) et RIR 5503(2)
AgriInvest accounts do not affect qualification of family farm or fishing corporations

Principal Issues: Est-ce que les fonds accumulés dans les comptes Agri-investissement et Agri-Québec sont des biens admissibles aux fins de la définition d’ « action du capital-actions d’une société agricole ou de pêche familiale » pour la déduction pour gains en capital? / Are cumulated funds in AgrInvest and Agri-Québec accounts eligible properties for the definition "share of the capital stock of a family farm or fishing corporation" for the capital gains deduction?

Position: Sans objet car leur JVM est réputée nulle par 110.6(1.1). / Not applicable because their FMV is deemed to be nil by ss. 110.6(1.1).

Reasons: Application de 110.6(1.1). / Application of 110.6(1.1).

Technical Interpretation - Internal

2 May 2016 Internal T.I. 2015-0578131I7 - Deduction - cost being awarded by a court

Unedited CRA Tags
9(1); 18(1)a); 248(1) « biens »

Principales Questions: Can a taxpayer deduct the costs that he/she was ordered to pay as a consequence of costs being awarded by a court?

Position Adoptée: Generally, yes.

Raisons: Legal costs otherwise deductible would generally include the costs that a taxpayer is required to pay as a consequence of costs being awarded by a court.

5 August 2014 Internal T.I. 2013-0503671I7 - 149(1)(c) - Improvement Districts

Unedited CRA Tags

Principal Issues: Whether improvement districts, particularly in British Columbia, would be considered municipal or public bodies performing a function of government for the purpose of paragraph 149(1)(c) and therefore able to issue donation receipts as a qualified donee.

Position: Yes.

Reasons: See Below