Income Tax Severed Letters - 2020-09-30

Technical Interpretation - External

14 August 2020 External T.I. 2019-0829811E5 - Crown Agent Status w/respect to Para. 149(1)(o.2)

Unedited CRA Tags
Paragraphs 149(1)(o.2), (d), (d.2), Regulation 4802(1)
Summary Under
Tax Topics - Income Tax Regulations - Regulation 4802 - Subsection 4802(1) - Paragraph 4802(1)(e)
a provincial incorporating statute’s declaration of deemed property ownership by the provincial Crown was respected
Summary Under
Tax Topics - Income Tax Act - Section 149 - Subsection 149(1) - Paragraph 149(1)(o.2) - Subparagraph 149(1)(o.2)(iv) - Clause 149(1)(o.2)(iv)(D)
deemed ownership clause in Crown corporation's statute applied for s. 149(1)(o.2)(iv) purposes

Principal Issues: Whether a provincial Crown corporation without share capital is a permitted shareholder of a corporation exempt from tax under paragraph 149(1)(o.2).

Position: Yes.

Reasons: Under the enabling legislation, the provincial government is deemed to own all property of the Crown corporation for all purposes.

4 June 2020 External T.I. 2020-0850001E5 - Depletion of an industrial mineral mine (gravel)

Unedited CRA Tags
20(1)(a), 13(21), Regulations 1100(1)(g), 1104(4), 1100(2), Schedule V of the Regulations

Principal Issues: General comments on the deduction for depletion of a gravel pit including a simple numerical example.

Technical Interpretation - Internal

11 August 2020 Internal T.I. 2018-0782181I7 - Successored CCEE and Non-Capital Losses

Unedited CRA Tags
3, 18(1)(a), 66.1(2), 66.1(3), 66.7(3), 111(1), 111(8)
Summary Under
Tax Topics - Income Tax Act - Section 66.7 - Subsection 66.7(3)
deductions of successored resource expenditures cannot generate a non-capital loss
Summary Under
Tax Topics - Income Tax Act - Section 3 - Paragraph 3(c)
s. 3(c) deduction (e.g., under s. 67.3) cannot generate a non-capital loss
Summary Under
Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(a) - Incurring of Expense
successored resource expenses are not deductible under s. 9

Principal Issues: Can a subsection 66.7(3) deduction for successored CEE create/increase a non-capital loss?

Position: No.

Reasons: Subsection 66.7(3) provides a deduction under subdivision e of Division B of the Act. A subdivision e deduction cannot result in the creation or increase of a non-capital loss.