Translations of recent severed letters

Bundle Date Translated severed letter Summaries under Summary descriptor
2003-06-13 11 June 2003 External T.I. 2002-0175975 F - TRANSFERT-ENT. EXPLOITEE ACTIVEMENT Income Tax Act - Section 79.1 - Subsection 79.1(6) - Paragraph 79.1(6)(b) meaning of expenses incurred to protect creditor's rights
13 June 2003 External T.I. 2002-0177045 F - BOISSONS OFFERTES AUX EMPLOYES Income Tax Act - Section 6 - Subsection 6(1) - Paragraph 6(1)(a) FMV of free beverages marketed by employer and provided to its employees included in their income
Income Tax Act - Section 67.1 - Subsection 67.1(2) - Paragraph 67.1(2)(d) FMV of free beverages provided to employees included in their income, so that cost of beverages to employer deductible from its income
27 May 2003 Internal T.I. 2003-0005357 F - TRANSFERT DE PROPRIETE EFFECTIVE Income Tax Act - Section 248 - Subsection 248(1) - Disposition - Paragraph (e) whether a preliminary transfer of shares of the target to spouse represented a disposition to her turned on whether there was a transfer of ownership under the Civil Code
15 May 2003 Internal T.I. 2003-0014507 F - DEDUCTIBILITE DES INTERETS Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(c) - Subparagraph 20(1)(c)(i) interest deductible on money borrowed to acquire non-dividend-paying common shares
3 June 2003 Internal T.I. 2003-0181487 F - DEDUCTIBILITE DES INTERETS GARANTIE Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(c) - Subparagraph 20(1)(c)(i) guarantee of wholly-owned corporation’s debt given for income-producing purpose is satisfied with borrowed money on which interest may be deductible
Income Tax Act - Section 20.1 - Subsection 20.1(1) s. 20.1(1)(b)(iv) deductibility where guarantee of wholly-owned corporation’s debt given for income-producing purpose is satisfied with borrowed money and subrogated claim is worthless
2003-06-06 30 May 2003 Internal T.I. 2003-0000117 F - ALLOCATION AUTOMOBLE VERSÉE Income Tax Act - Section 53 - Subsection 53(2) - Paragraph 53(2)(c) - Subparagraph 53(2)(c)(v) allowance, or reimbursement for non-partnership expense, is treated as a distribution reducing the partner’s ACB
Income Tax Act - Section 96 - Subsection 96(1) - Paragraph 96(1)(a) fees, and usually "loan" interest, paid to a partner will be treated as draws rather than deductible expenses
Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(c) - Subparagraph 20(1)(c)(i) a loan by a partner to the partnership may be treated as a loan rather than a contribution of capital in special circumstances
30 May 2003 External T.I. 2003-0006005 F - EQUIVALENT TO SPOUSE Income Tax Act - Section 118 - Subsection 118(1) - Paragraph 118(1)(b) - Subparagarph 118(1)(b)(i) s. 118(1)(b)(i) test unlikely to be satisfied where one of couple is incarcerated
3 June 2003 External T.I. 2003-0012075 F - Safe Income and 104(13.1) Designation Income Tax Act - Section 55 - Subsection 55(2)
Income Tax Act - Section 55 - Subsection 55(2.1) - Paragraph 55(2.1)(c) income retained by a trust under s. 104(13.1) and then distributed to its corporate beneficiary was not included in the latter’s safe income
3 June 2003 Internal T.I. 2003-0019087 F - Calculation of 163(1) Penalty - Capital Gain Income Tax Act - Section 163 - Subsection 163(1) penalty computed on taxable capital gain, not capital gain
30 May 2003 External T.I. 2003-0182145 F - AVANTAGE IMPOSABLE-VOYAGE Income Tax Act - Section 6 - Subsection 6(1) - Paragraph 6(1)(a) no taxable benefit re free trip for a customer’s employee where employee spends at least 50% of the time on business-related activities
2003-05-30 15 April 2003 External T.I. 2002-0139305 F - Immigration Income Tax Act - Section 128.1 - Subsection 128.1(1) - Paragraph 128.1(1)(c) ss. 128.1(1)(b) and (c), unlike former s. 48(3), apply also for CCA/recapture purposes
Income Tax Act - Section 126 - Subsection 126(1) FTC can be generated where recapture of depreciation, and denied capital loss, are realized on a US rental building
Income Tax Act - Section 53 - Subsection 53(1) - Paragraph 53(1)(e) - Subparagraph 53(1)(e)(i) step-up of partnership interest on immigration to Canada neutralized the capital gain on partnership property when partnership wound up
5 May 2003 External T.I. 2002-0140805 F - Arrangements funéraire - Provision de 20(1)m) Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(m) non-refundable prepaid funeral amounts not held in trust were not eligible for the reserve
23 April 2003 External T.I. 2002-0155125 F - Rétribution Questionnaires - Actionnaires Income Tax Act - Section 67 scenario including non-resident corporation did not comply with ITTN No. 22
23 May 2003 External T.I. 2002-0172205 F - FIDUCIE DE BIEN-RE&S Income Tax Act - Section 18 - Subsection 18(9) - Paragraph 18(9)(a) - Subparagraph 18(9)(a)(iii) s. 18(9)(a)(iii) likely applies where employer makes a payment to a trust which uses insurance to fund employee health services
27 May 2003 External T.I. 2002-0176485 F - regime d'assurance-salaire Income Tax Act - Section 15 - Subsection 15(1) s. 15(1) benefit (e.g., from corporation paying premiums under wage loss replacement plan for shareholder) cannot be reduced by the shareholder repaying the benefit
26 May 2003 External T.I. 2002-0180455 F - MODIFICATION D'UNE POLICE EXONEREE Income Tax Regulations - Regulation 306 - Subsection 306(1) question of fact for insurer whether splitting a policy terminates its exempt status
21 May 2003 Internal T.I. 2003-0001407 F - DISPOSITIONS SUBJECT TO WARRANTY Income Tax Act - Section 42 s. 42 applied to payment of claim of purchaser based on latent defect in property and to legal fees
26 May 2003 Internal T.I. 2003-0002297 F - Fonds commun de placement-Dépenses gén. Income Tax Act - Section 104 - Subsection 104(6) allocation of expenses permitted to maximize dividend tax credits of MFT beneficiaries
Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(bb) s. 20(1)(bb) deductibility does not turn on the evaluated security being acquired
2003-05-23 15 May 2003 External T.I. 2002-0168445 F - frais de location-voiture Income Tax Act - Section 67.3 - Paragraph 67.3(d) “manufacturer's list price" references "manufacturer's suggested retail price," and does not include federal and provincial sales tax
13 May 2003 Internal T.I. 2003-0001787 F - CHOIX-IMPACT SUR FNACC Income Tax Act - Section 13 - Subsection 13(7) - Paragraph 13(7)(e.1) notwithstanding Finance’s intent, s. 104(19) election resulted in subsequent recapture
Statutory Interpretation - Ordinary Meaning clearly expressed legislative text to be followed, even though contrary to more favourable Finance intent
13 May 2003 Internal T.I. 2003-0002167 F - TRAVAIL TEMPORAIRE Income Tax Act - Section 6 - Subsection 6(6) - Paragraph 6(6)(a) - Subparagraph 6(6)(a)(i) test of work of a temporary nature not met where appointment as a director could be readily renewed through re-election
21 May 2003 Internal T.I. 2003-0009897 F - COUT DES ACTIONS Income Tax Act - Section 112 - Subsection 112(5.2) - Variable B “cost” in B refers to the original cost (computed without reference to s. 142.5(2)(b))
15 May 2003 Internal T.I. 2003-0010237 F - COUT EN MAIN-D'OEUVRE Income Tax Regulations - Regulation 5202 - Salaries and Wages “salaries and wages” do not include tips
14 May 2003 External T.I. 2003-0015625 F - Convertible Debenture - Safe Income Income Tax Act - Section 55 - Subsection 55(2.1) - Paragraph 55(2.1)(c) holder of convertible debenture could be attributed safe income respecting the common shares into which it subsequently converted
14 May 2003 Internal T.I. 2003-0181477 F - DEDUCTIBILITE DES INTERETS Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(c) deductible interest is reduced by amortization of premium arising from loan’s deliberate issuance at above-market interest rate
Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(c) - Subparagraph 20(1)(c)(i) taxpayer discretion re attributing use of commingled funds does not apply where tracing is possible
2003-05-16 13 May 2003 External T.I. 2002-0176525 F - CHANTIER DE CONSTRUCTION Income Tax Act - Section 6 - Subsection 6(6) W2 amounts likely not an appropriate basis for establishing proper s. 6(6) allowance amounts
16 May 2003 External T.I. 2002-0178685 F - CALCUL DU COUT D'UN TITRE DE CREANCE Income Tax Act - Section 53 - Subsection 53(2) - Paragraph 53(2)(l) accrued interest initially included in ACB
Income Tax Act - Section 20 - Subsection 20(14) overview of s. 20(14) and s. 53(2)(l)
2003-05-09 7 May 2003 External T.I. 2002-0164995 F - SENS DE ENSEMBLE DES BENEFICIE Income Tax Act - Section 108 - Subsection 108(1) - Beneficiary whether meaning of “beneficiary” outside ss. 104-108 includes those in the class who have not been designated depends on the context
Income Tax Act - Section 110.6 - Subsection 110.6(14) - Paragraph 110.6(14)(c) - Subparagraph 110.6(14)(c)(ii) “all of the beneficiaries” only references those of the potential class who have been designated as beneficiaries

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