Translations of recent severed letters

Bundle Date Translated severed letter Summaries under Summary descriptor
2021-09-08 1 June 2021 External T.I. 2020-0865201E5 F - Sale of property for POD less than FMV Income Tax Act - Section 251 - Subsection 251(1) - Paragraph 251(1)(c) sale of 2 properties by 50-50 corp at a knowing undervalue to the respective shareholders’ own corporations likely was non-arm’s length
Income Tax Act - Section 56 - Subsection 56(2) sale of 2 properties by 50-50 corp at a knowing undervalue to the respective shareholders’ own corporations could engage s. 56(2)
2021-09-01 21 June 2021 External T.I. 2019-0815871E5 F - 83(2)b) and cost Income Tax Act - Section 54 - Adjusted Cost Base promissory note issued in satisfaction of a capital dividend has full cost
Income Tax Act - Section 52 - Subsection 52(1) s. 52(1) is unnecessary to establishing full cost for a note transferred in satisfaction of a capital dividend
2021-06-23 4 February 2021 Internal T.I. 2020-0872991I7 F - Revenu d'emploi d'un Indien en travail à domicile Other Legislation/Constitution - Federal - Indian Act - Section 87 Indian working from home office on reserve during COVID generated exempt employment income
2021-06-16 5 March 2021 External T.I. 2017-0713041E5 F - Allocation pour usage d’un véhicule à moteur Income Tax Act - Section 6 - Subsection 6(1) - Paragraph 6(1)(b) - Subparagraph 6(1)(b)(x) it can be acceptable to cap the kilometres for which a car allowance is paid
Income Tax Act - Section 6 - Subsection 6(1) - Paragraph 6(1)(b) - Subparagraph 6(1)(b)(vii.1) unreasonably low allowance may be taxable
17 February 2021 External T.I. 2018-0768051E5 F - Contrat de crédit-bail Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(c) - Subparagraph 20(1)(c)(ii) leasing contract cannot be recharacterized as a secured loan funding an acquisition of depreciable property
Income Tax Act - Section 68 lease payments for vehicle lease with bargain purchase option are allocated between ACB of option and deductible lease payments
Income Tax Act - Section 49 - Subsection 49(3) a portion of the lease payments under a lease with a bargain purchase option recharacterized as consideration for the option
Income Tax Act - Section 13 - Subsection 13(5.2) acquisition of leased vehicle pursuant to bargain purchase option followed by sale of vehicle could engage s. 13(5.2)
Income Tax Act - Section 16.1 - Subsection 16.1(1) truck tractor is prescribed property
General Concepts - Substance lease payments, but not the lease itself, could be recharacterized
23 February 2021 External T.I. 2018-0769891E5 F - 125(7) "revenu de société déterminé" Income Tax Act - Section 251 - Subsection 251(1) - Paragraph 251(1)(c) presumption that two 50% shareholders act together to control the corporation
Income Tax Act - Section 125 - Subsection 125(7) - Specified Corporate Income - Paragraph (a) - Subparagraph (a)(i) - Clause (a)(i)(B) - Subclause (a)(i)(B)(I) services income from multiple private corporations referenced in s. (a)(i)(A) can be bad income for purposes of the substantially all test
Income Tax Act - Section 125 - Subsection 125(1) - Paragraph 125(1)(a) - Subparagraph 125(1)(a)(i) - Clause 125(1)(a)(i)(B) services income from multiple investee private corporations can be bad income for purposes of the specified corporate income - s. (a)(i)(B) safe harbour
2021-06-02 14 April 2021 External T.I. 2018-0785921E5 F - alinéa 87(1)a) Income Tax Act - Section 87 - Subsection 87(1) - Paragraph 87(1)(a) a statutory amalgamation satisfied s. 87(1)(a) notwithstanding a distribution of cash on the amalgamation
2021-05-26 2021 Ruling 2020-0868661R3 F - Section 84.1 – Leveraged Buyout Income Tax Act - Section 84.1 - Subsection 84.1(1) s. 84.1 did not apply to a leveraged buyout financed by the target
Income Tax Act - Section 251 - Subsection 251(1) - Paragraph 251(1)(c) ruling that buyout was an arm’s length transaction
2021-04-14 7 October 2020 APFF Roundtable Q. 15, 2020-0852271C6 F - Corporate attribution rules Income Tax Act - Section 74.4 - Subsection 74.4(2) s. 74.4(2) could apply to a s. 51 estate freeze-style reorganization by two spouses in favour of two discretionary trusts for them and their spouse
7 October 2020 APFF Roundtable Q. 16, 2020-0867071C6 F - APFF Q.16 - Withholding tax on swap payment Income Tax Act - Section 16 - Subsection 16(1) interest is no longer imputed on mismatched cross-border swap payments
Income Tax Act - Section 9 - Capital Gain vs. Profit - Swaps all amounts payable or receivable under a swap are on income account
7 October 2020 APFF Roundtable Q. 17, 2020-0845821C6 F - Part IV tax and trust Income Tax Act - 101-110 - Section 104 - Subsection 104(19) various applications of proposition that an s. 104(19) designation is not effective until the trust’s year end
Income Tax Act - Section 186 - Subsection 186(2) s. 104(13), unlike s. 104(19), can apply contemporaneously with a trust dividend distribution, and ss. 186(2) and 251(1)(b) can apply synergistically
Income Tax Act - 101-110 - Section 104 - Subsection 104(24) under the ordinary meaning of payable, an amount is payable at a time if it is paid then
2021-04-07 27 August 2020 Internal T.I. 2016-0675801I7 F - Prestations de maternité complémentaires Income Tax Act - Section 6 - Subsection 6(1) - Paragraph 6(1)(a) Quebec supplementary maternity benefits subsidized childcare centres are taxable, but may not be subject to EI deductions
4 February 2021 External T.I. 2020-0875231E5 F - Revenu d’emploi d’un Indien en travail à domicile Other Legislation/Constitution - Federal - Indian Act - Section 87 an Indian who is now working at a home office on the reserve for COVID reasons has become exempt from the resulting employment earnings
7 October 2020 APFF Roundtable Q. 1, 2020-0852131C6 F - Meaning of reasonable error Income Tax Act - Section 204.1 - Subsection 204.1(4) meaning of "reasonable error"
Income Tax Act - Section 207.06 - Subsection 207.06(1) examples of what CRA has accepted as a “reasonable error” in making an RRSP or TFSA over-contribution
7 October 2020 APFF Roundtable Q. 2, 2020-0852141C6 F - APFF 2020 Roundtable Q2 - Request for Information Income Tax Act - Section 231.1 - Subsection 231.1(1) CRA may request personal bank statements when conducting indirect reviews
7 October 2020 APFF Roundtable Q. 3, 2020-0852151C6 F - Safe income Income Tax Act - Section 55 - Subsection 55(2.1) - Paragraph 55(2.1)(c) repayment of loan, that had funded a dividend creating a safe income deficit, out of subsequent earnings reduced SIOH
7 October 2020 APFF Roundtable Q. 4, 2020-0852161C6 F - Election Income Tax Act - Section 164 - Subsection 164(6) CRA will not follow the ARQ in allowing a s. 164(6) loss carryback claim on a terminal return before the GRE’s T3 return is assessed
7 October 2020 APFF Roundtable Q. 5, 2020-0852171C6 F - Usufruct of a principal residence Income Tax Act - Section 54 - Principal Residence - Paragraph (c.1) a deemed s. 248(3) testamentary usufruct trust might access the principal residence exemption on the spousal usufructuary’s death or on her surrendering her interest
Income Tax Act - 101-110 - Section 107 - Subsection 107(4) application of s. 107(4) to termination of deemed s. 248(3)(a) spousal trust
Income Tax Act - Section 70 - Subsection 70(6) - Paragraph 70(6)(b) - Subparagraph 70(6)(b)(ii) s. 70(6)(b)(ii) not satisfied where residence of deceased passes to a usufruct for his surviving spouse for a fixed term of years
Income Tax Act - Section 248 - Subsection 248(3) application of s. 248(3) to usufruct created by will and terminated by death of usufructuary or surrender by her, or assignment or death by bare owner
7 October 2020 APFF Roundtable Q. 6, 2020-0852181C6 F - Par. 5(2)(b) of the Employment Insurance Act Other Legislation/Constitution - Federal - Employment Insurance Act - Section 5 - Subsection 5(2) - Paragraph 5(2)(b) CRA now applies a “proportionate attribution approach” in applying the s. 5(2)(b) test of “control … of … voting shares”
7 October 2020 APFF Roundtable Q. 7, 2020-0852191C6 F - Capital dividend and series of shares Income Tax Act - Section 83 - Subsection 83(2) capital dividends can be paid on one series and not the other
Income Tax Act - Section 83 - Subsection 83(2.1) s. 83(2.1) “should be considered” where one of the main purposes of a reorganization is to stream capital dividends
7 October 2020 APFF Roundtable Q. 8, 2020-0852201C6 F - Acheminement du CDC / CDA Streaming Income Tax Act - Section 83 - Subsection 83(2.1) s. 83(2.1) does not generally apply to the streaming of capital dividends to one of the original shareholders

Pages