Income Tax Severed Letters - 2019-09-04


2019 Ruling 2018-0772151R3 - Multi-Wing Spin-Off Butterfly

Unedited CRA Tags
55(2), 55(3)(b), 55(3.1), 148(7), 51(1), 86(1), 85(1)(c.2)

Principal Issues: Whether the butterfly dividends arising on the proposed transactions are exempt under paragraph 55(3)(b) from the application of subsection 55(2).

Position: Yes.

Reasons: Proposed transactions meet the requirements of the Act.

Technical Interpretation - External

13 August 2019 External T.I. 2018-0758611E5 - Charitable gift annuity and 60(l) rollover

Unedited CRA Tags

Principal Issues: Whether a charitable gift annuity issued by a registered charity would be eligible for a tax-deferred rollover under paragraph 60(l)?

Position: No.

Reasons: The registered charity is not a person licensed or otherwise authorized under the laws of Canada or a province to carry on an annuities business in Canada as required by subparagraph 60(l)(ii).

15 July 2019 External T.I. 2018-0747761E5 F - Application de 73(4.1)

Unedited CRA Tags
negative ACB is not triggered under s. 73(4.1)(c)

Principales Questions: Dans une situation donnée, quelles sont les conséquences fiscales d’un transfert par un contribuable de sa participation dans une société de personnes agricole ou de pêche familiale pour lequel il fait le choix de l’alinéa 73(4.1)c) alors que le calcul du PBR de cette participation est négatif? / In a given situation, what are the tax consequences of a taxpayer’s transfer of his or her interest in a family farm or fishing partnership for which he or she made the election of paragraph 73(4.1)(c) whereas the calculation of the ACB of that interest is negative?

Position Adoptée: Le contribuable n’a généralement pas à inclure dans le calcul de son revenu un gain en capital égal à son PBR négatif au moment du transfert. Par ailleurs, l’enfant devra tenir compte des sous-alinéas 73(4.1)c)(ii) et (iii) dans le calcul du PBR de sa participation. / The taxpayer will generally not have to include a capital gain equal to its negative ACB at the time of the transfer. In addition, the child will have to consider subparagraphs 73(4.1)(c)(ii) and (iii) in calculating the ACB of his or her interest.

Raisons: Analyse de la Loi. / Analysis of the Act.

Technical Interpretation - Internal

27 June 2019 Internal T.I. 2019-0791541I7 - Interaction of 162(5) and (7)

Unedited CRA Tags
162(5), 162(7)
a late-filed T1135 with minor missing information could generate double penalties under ss. 162(7) and (5)
a double penalty should only be assessed where this is appropriate and equitable

Principal Issues: Whether penalties under subsections 162(5) and (7) can both apply to a late-filed Form T1135 that is missing information that is not substantial to the form.

Position: Yes, but depending on the circumstances, assessing both may not be appropriate.

Reasons: The late-filing of an information return is a separate failure from failing to provide information on an information return.