28 October 1998 External T.I. E9824835 - RESIDENCE OF A TRUST

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

XXXXXXXXXX 	982483
		Tim Kuss
Attention:  XXXXXXXXXX 

October 28, 1998

Dear Sirs:

Re: XXXXXXXXXX (the "Estate")

This is in reply to your facsimiles dated September 24 and September 29, 1998 regarding the above matter. We also acknowledge our numerous telephone conversations (Kuss/XXXXXXXXXX) related thereto.

We understand that XXXXXXXXXX died intestate on XXXXXXXXXX and that the Probate Court of XXXXXXXXXX (the "Court") has primary jurisdiction over the proceedings. We also understand that XXXXXXXXXX was resident in the U.S. at the time of his death, but that a large portion of his estate consisted of Canadian GIC's with a situs in Ontario. Although the GIC's have since been converted into Government of Canada treasury bills, their situs remains Canada. The Administrator of the Estate (XXXXXXXXXX) is a resident of Canada.

You have told us that a T3 return for the Estate for the taxation year ending XXXXXXXXXX has now been filed. As a result, we suggest that further enquiries regarding the residence of the Estate and its liability for tax in Canada be directed to your local Tax Services Office as it is their responsibility to deal with tax returns that have been filed or assessed.

Nevertheless we are prepared to provide the following general comments.

The appropriate Canadian tax treatment for the income of the Estate is dependent on where the Estate is resident. Generally, an estate or trust is considered resident where the majority of its trustees are resident.

We understand that it is your view that the Estate is resident in the U.S. and that the T3 return was filed on that basis. It is likely that the Tax Services Office where the T3 was filed will request you to make representation to support the claim of U.S. residence. Therefore, we suggest you give further thought as to what evidence is available to support your claim.

Yours truly,

for Director
Reorganizations and International Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch