Income Tax Severed Letters - 2020-12-02

Ruling

2019 Ruling 2018-0776381R3 - Part XIII tax under a reverse repo agreement

Unedited CRA Tags
212(1)(b)
Summary Under
Tax Topics - Income Tax Act - Section 212 - Subsection 212(1) - Paragraph 212(1)(b)
the negative repo spread on a reverse repo was not interest
Summary Under
Tax Topics - Income Tax Act - Section 260 - Subsection 260(2)
reverse repo not recharacterized as securities loan

Principal Issues: Whether a negative repo spread is interest or an amount in lieu of interest under paragraph 212(1)(b).

Position: No.

Reasons: The agreements are purchase and sale agreements to which subsection 260(2) does not apply.

Technical Interpretation - External

30 November 2020 External T.I. 2020-0864791E5 - Canada Emergency Response Benefit

Unedited CRA Tags
Indian Act s. 87; 81(1)(a); Canada Emergency Response Benefit Act

PRINCIPAL ISSUES: This document discusses how the exemption from tax pursuant to section 87 of the Indian Act applies to the Canada Emergency Response Benefit (CERB).

10 November 2020 External T.I. 2020-0861461E5 - TI – Tax Treatment of Loan Forgiveness under CEBA

Unedited CRA Tags
12(1)(x); 12(2.2); 80
Summary Under
Tax Topics - Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(x) - Subparagraph 12(1)(x)(iv)
the forgivable loan portion of a CEBA loan is a s. 12(1)(x)(iv) receipt
Summary Under
Tax Topics - Income Tax Act - Section 12 - Subsection 12(2.2)
s.12(2.2) election can be made re s. 12(1)(x)(iv) inclusion for forgivable CEBA loan

Principal Issues: What is the tax treatment of forgivable portion of a loan granted under the CEBA program?

Position: Generally, forgivable portion is included in income under paragraph 12(1)(x) in the year of receipt, with an off-setting deduction available under paragraph 20(1)(hh) if the amount is repaid, in the year of repayment. See comments below.

Reasons: The law.