Income Tax Severed Letters - 2019-10-30


2019 Ruling 2018-0758411R3 - Multi-wing split-up net asset butterfly

Unedited CRA Tags
55(2); 55(2.1); 55(3)(b)
butterfly split-up of rental property into co-ownership arrangement, completed by wind-up of DC into TCs and subsequent dividend refund distribution
Pt. IV tax circularity avoided through winding-up dividend in subsequent year

Principal Issues: Whether the Proposed Transactions meet the requirements of paragraph 55(3)(b).

Position: Yes.

Reasons: Based on the Act and CRA publications and taxpayer representations.

Ministerial Correspondence

25 September 2019 Ministerial Correspondence 2019-0821671M4 - Small tools costing less than $500

Unedited CRA Tags
9(1); 18(1); 18(1)(b); 20(1)(a); Class 12

Principal Issues: Whether small tools costing less than $500 would be deductible in computing income from a business or property as an expense?

Position: Question of fact, but generally yes.

Reasons: See below.

Technical Interpretation - External

8 August 2019 External T.I. 2019-0802711E5 - Reduced Tuition, Scholarship, and Foreign exchange

Unedited CRA Tags
ITA: 56(1)(n); 56(3); 118.5(1)(b); 220(2.1); Regulation 200(2)(a).

Principal Issues: The amount to be reported on Form TL11A for tuition fees paid in a foreign currency by a student to a University outside Canada.

Position: The full amount of tuition paid in the country’s currency or in Canadian dollars based on the exchange rate in effect at the time the fees were paid.

Reasons: See response.