Income Tax Severed Letters - 2025-12-17

Technical Interpretation - External

4 December 2025 External T.I. 2025-1072361E5 - CANADIAN PARTNERSHIPS AND U.S. LLC UNDER CBCR RUL

Unedited CRA Tags
102(1); 233.8 OF THE ACT; SECTION 47 OF THE GMTA

Principal Issues: Given the importance of the CbCR under the GMTA, can you clarify if 1) a Canadian partnership should be considered a stateless entity or resident in Canada for purposes of the CbCR; and 2) a U.S. limited liability company that is wholly owned by a U.S. corporation and is considered a disregarded entity for U.S. tax purposes should be considered a stateless entity or resident in the U.S. for purposes of the CbCR ?

Position: 1) A Canadian partnership should generally be considered a stateless entity for the purpose of the CbCR.
2) A disregarded U.S. limited liability company that is wholly owned by a U.S. corporation should generally be considered resident in the U.S. for the purpose of the CbCR.

Reasons: 1) Status of Canadian partnerships under the Income Tax Act.
2) Treatment of U.S. limited liability companies under U.S. tax law, in particular for purposes of the U.S. CbCR rules.

24 November 2025 External T.I. 2025-1073271E5 - GMTA - amended CbC report for TCSH

Principal Issues: In determining eligibility for the transitional CbCR safe harbour (TCSH), whether an amended country-by-country (CbC) report is considered as having been filed in accordance with relevant CbC reporting regulations, as defined in section 43 of the Global Minimum Tax Act (GMTA), and if so, whether there is a time limit within which such an amendment should be filed.

Position: A CbC report will not be precluded from having been filed in accordance with "relevant CbC reporting regulations" merely for the reason that it is an amended CbC report. As such, it can be relied on for the purposes of the TCSH to the extent that it meets the requirements of the definition of a "qualified CbC report" in subsection 47(1) of the GMTA and it is filed before the GIR for that fiscal year has been filed. A CbC report that is amended after the GIR for that fiscal year has been filed could require an amendment to the GIR.

Reasons: Based on GIR and CbC reporting rules and guidance.

10 April 2025 External T.I. 2025-1050641E5 - LOSSES ON OBSOLETE CRYPTO INVENTORY

Unedited CRA Tags
10; 248(1) "INVENTORY", "PROPERTY"

Principal Issues: FOR CRYPTO-ASSETS PURCHASED FOR SALE THAT HAVE BECOME OBSOLETE AND WORTHLESS 1. GIVEN THEIR CLASSIFICATION AS INVENTORY, CAN THE TAXPAYER WRITE DOWN THE OBSOLETE CRYPTO-ASSETS UNDER SECTION 10 OF THE ACT? 2. IF A WRITE-DOWN OF THE OBSOLETE CRYPTO-ASSETS IS NOT PERMITTED UNDER SUBSECTION 10(1) OF THE ACT, CAN THE TAXPAYER REALIZE A LOSS ON THE OBSOLETE CRYPTO-ASSETS BY "BURNING" THEM, SUCH AS BY TRANSFERRING THEM TO A "BURN ADDRESS"? 3. WHAT ARE EXAMPLES OF DOCUMENTATION THE TAXPAYER SHOULD BE PREPARED TO PROVIDE IN SUPPORT OF A DEDUCTION IN RESPECT OF THE OBSOLETE CRYPTO-ASSETS, EITHER UNDER THE INVENTORY VALUATION RULES IN SECTION 10 OF THE ACT OR AS A RESULT OF "BURNING" THE OBSOLETE CRYPTO-ASSETS

Position: 1. OBSOLETE CRYPTO-ASSETS THAT ARE INVENTORY CAN BE WRITTEN DOWN IN ACCORDANCE WITH THE INVENTORY VALUATION RULES IN SECTION 10 OF THE ACT. 2. YES, PROVIDED THAT "BURNING" THE OBSOLETE CRYPTO-ASSETS RESULTS IN THEM BEING PERMANENTLY REMOVED FROM THE CIRCULATING SUPPLY. 3. SEE COMMENTS.

Reasons: 1. SECTION 10 OF THE ACT. 2. GENERAL APPLICATION OF THE "REALIZATION PRINCIPLE". 3. SEE COMMENTS

Technical Interpretation - Internal

26 September 2025 Internal T.I. 2022-0923881I7 - Subsection 45(3) Election

Unedited CRA Tags
20(1); 40(4); 45(1); 45(2); 45(3); 45(4); 54- definition of principal residence; 70(5); 70(6); 112(5.1); 112(5.2); 128.1(1); 150(1); 220(3.2); 220(3.3) 220(3.5); 249(1); Reg 600; 5907(13)

Principal Issues: 1) Whether a taxpayer can file an election under subsection 45(3) of the Income Tax Act (“Act”) in a particular year that is subsequent to the year of the property’s change in use (from income producing to a principal residence) without it being considered late filed. 2) Whether a taxpayer can rescind a subsection 45(3) election in a particular situation. 3) Whether a letter received by a particular taxpayer is considered a demand to file as contemplated by paragraph 45(3)(a) of the Act. 4) If the subsection 45(3) election had not yet been filed by the Taxpayer, what would be the latest filing due date for the election in the situation where the Taxpayer died in 2019 (assuming that the rollover under subsection 70(6) does not apply) and the estate or other recipient of the property disposed of the property in 2021.

Position: 1) Yes. 2) No, but it may be possible to have the election revoked with CRA’s permission. 3) Question of fact, but likely no. 4) The filing due date of the deceased's 2019 income tax return.

Reasons: 1) The due date is the earlier of the dates indicated in paragraphs 45(3)(a) and (b). 2) Subsection 45(3) does not provide the ability for a taxpayer to rescind the election. However, permission to revoke may be requested pursuant to subsection 220(3.2). 3) It is expected that a demand to file would include a clear statement the taxpayer must file the election. 4) This is the date that the principal residence designation must be filed.