Income Tax Severed Letters - 2019-05-29


2019 Ruling 2018-0777621R3 - Standard Loss Consolidation

Unedited CRA Tags
245; 20(1)(c); 112(1); 55(2); 88(1.1)

Principal Issues: Whether Lossco would be entitled to apply existing non-capital losses against the interest income that would be generated as part of particular loan that would be made under the loss consolidation transaction and whether the accompanying interest expense would be deductible by Profitco.

Position: Yes.

Reasons: The proposed transactions conform to our requirements for these types of loss consolidation rulings. The proposed transactions would be legally effective and commercially realistic.

Ministerial Correspondence

24 April 2019 Ministerial Correspondence 2019-0798971M4 - CCA class for zero-emission / electric vehicles

Unedited CRA Tags
Budget 2019 - Proposed legislation - sections 64, 65, 66, 67.2, 67.41, 68 and 69 of the NWMM

Principal Issues: Whether there are plans to include electric cars in a capital cost allowance (CCA) class other than Class 10.1.

Position: See response.

Reasons: Budget 2019.

Technical Interpretation - External

7 February 2019 External T.I. 2017-0719651E5 - Medical expenses

Unedited CRA Tags
Subsection 118.2(2), Section 5700 of the Regulations

Principal Issues: Whether the costs incurred for: 1) Proloquo2Go software; 2) an Apple iPad; and 3) a Liftware spoon qualify as medical expenses for purposes of the Medical Expense Tax Credit.

Position: 1) Likely yes; 2) No; 3) No.

Reasons: 1) The Proloquo2Go software appears to be similar to a bliss symbol board as described in Income Tax Regulation 5700(x); 2) An Apple iPad does not meet the requirements under subsection 118.2(2); 3) The Liftware spoon does not meet the requirements under subsection 118.2(2).

15 September 2017 External T.I. 2017-0696821E5 F - Amalgamation

Unedited CRA Tags
87(1)(a), 87(1)(c), 87(4)
receipt of cash on amalgamation did not preclude qualification under s. 87(1) [per Envision, 2013 SCC 48?]
receipt of cash on amalgamation precluded rollover

Principal Issues: What is the tax treatment of the receipt of non-share consideration by a shareholder on an amalgamation?

Position: Subject to the application of subsection 245(2), non-share consideration received on an amalgamation is treated as proceeds of disposition.

Reasons: Prior positions.