Income Tax Severed Letters - 2019-07-03

Technical Interpretation - External

22 May 2019 External T.I. 2019-0796631E5 - Cash back received on home purchase

Unedited CRA Tags
9(1), 12(1)(x), 5(1), 6(1), 54 adjusted cost base, 53(1), 53(2)

Principal Issues: Are cash back incentives that are received by individual home purchasers from a realty business taxable and are the amounts paid by the company deductible?

Position: Question of fact and will depend whether the amounts received by the home purchaser would be considered income from a source.

Reasons: The Act lists the main sources of income, and a number of other miscellaneous sources. These main sources are income from office, employment income, business income, property income and capital gains. The other sources of income are found in subsection 56(1) of the Act. If the income does not fall within one of these sources of income, it is generally not taxable.

14 May 2019 External T.I. 2018-0768651E5 - Eligibility for non-refundable tax credits

Unedited CRA Tags
ITA: 118(1)(b) and (d), 118(4)(b), 118(5) and (5.1), 118.3(2) and (3)

Principal Issues: Whether separated parents may claim or share the eligible dependant credit and the unused portion of a dependant’s disability tax credit.

Position: Question of fact, see response.

Reasons: See response.

Conference

4 December 2018 TEI Roundtable Q. 1, 2018-0782341C6 - Regulation 1103(1)

Unedited CRA Tags
Income Tax Regulation 1103(1), 1103(3), 1103(4), 1103(5)
Summary Under
Tax Topics - Income Tax Regulations - Regulation 1103 - Subsection 1103(1)
Reg. 1103(1) election does not affect subsequent years’ acquisitions

Principal Issues: Can the CRA confirm whether the following statement continues to reflect its interpretation of Income Tax Regulation 1103(1); “where a taxpayer elects under Regulation 1103(1), the election affects all such properties on hand at the commencement of the taxation year and acquired during the year for which the election is made. The election does not affect properties acquired after the end of that year as referred to in your letter but, of course, they could be subject to a later election.

Position: Yes this statement continues to reflect our view.

Reasons: Paragraph 1.132 of Income Tax Folio S3-F4-C1, General Discussions of Capital Cost Allowance.

4 December 2018 TEI Roundtable Q. E2, 2018-0782361C6 - TEI 2018 Conference Question E2: S2-F3-C2

Unedited CRA Tags
6(1)(a)
Summary Under
Tax Topics - Income Tax Act - Section 6 - Subsection 6(1) - Paragraph 6(1)(a)
CRA revised its policy on employee merchandise discounts at the Minister’s request

Principal Issues: Update regarding S2-F3-C2