Translations of recent severed letters

Bundle Date Translated severed letter Summaries under Summary descriptor
2003-03-28 26 March 2003 External T.I. 2003-0008645 F - Non-Arm's Length Sale of Shares Income Tax Act - Section 251 - Subsection 251(1) - Paragraph 251(1)(c) family relationship (e.g., uncle/nephew) are more likely to give rise to NAL transaction
2003-03-21 19 March 2003 External T.I. 2002-0151015 F - ALLOCATION DU COUT EN CAPITAL Income Tax Regulations - Schedules - Schedule II - Class 16 - Paragraph 16(e) the short-term use requirement in 16(e) must continue to be met following the acquisition
Income Tax Act - Section 13 - Subsection 13(5) Class 16 automobile must be moved to another class when it ceases to be used for short-term rentals
19 March 2003 External T.I. 2002-0171825 F - DEDUCTION POUR INSOLVABILITE LIQUIDATION Income Tax Act - Section 61.3 - Subsection 61.3(1) winding-up in year does not preclude the s. 61.3 deduction
10 March 2003 Internal T.I. 2002-0172187 F - DEDUCTIBILITE DES INTERET Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(c) - Subparagraph 20(1)(c)(i) interest on debenture issued in payment of interest, was non-deductible
Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(f) premium (termed additional interest”) was payable even if no early repayment, and qualified under s. 20(1)(f)
Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(c) reiteration of position re deductibility of participating interest post-Sherway
Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(a) - Legal and other Professional Fees legal fees re repaying debt were non-deductible
Income Tax Act - Section 248 - Subsection 248(1) - Dividend premium payable on debenture repayment based in part on the quantum of debtor’s equity was not a dividend
11 March 2003 External T.I. 2002-0179095 F - Issuance-Discretionary Shares non-Consid. Income Tax Act - Section 15 - Subsection 15(1) a benefit can be conferred on a taxpayer even where no net economic benefit
Income Tax Act - Section 69 - Subsection 69(1) - Paragraph 69(1)(b) issuance of shares at less than FMV to joint Holdco of current shareholders could generate a deemed gain under s. 69(1)(b)
Income Tax Act - Section 56 - Subsection 56(2) s. 56(2) inapplicable to discretionary-dividend shares
13 March 2003 External T.I. 2003-000009B F - UNE BANDE SANS RESERVE Other Legislation/Constitution - Federal - Indian Act - Section 87 remission where lands not yet a reserve
14 March 2003 External T.I. 2003-0001385 F - Capital Dividend Account Income Tax Act - Section 89 - Subsection 89(1) - Capital Dividend Account - Paragraph (a) no adjustments for change in capital gains inclusion rates
Income Tax Act - Section 256 - Subsection 256(9) amalgamation and acquisition of control on successive days created 1-day short taxation year
14 March 2003 External T.I. 2003-0002465 F - Usu-droit privé franc.- nu- prop. Canadien Income Tax Act - Section 45 - Subsection 45(1) - Paragraph 45(1)(a) change of use to bare owner when usufruct over French rental property was extinguished
Income Tax Regulations - Regulation 1102 - Subsection 1102(1) - Paragraph 1102(1)(c) rental property of bare owner was not eligible for CCA, as rental income was that of French usufructuary
14 March 2003 Internal T.I. 2003-0182977 F - 40(3.5)(c) Income Tax Act - Section 40 - Subsection 40(3.5)
Income Tax Act - Section 40 - Subsection 40(3.5) - Paragraph 40(3.5)(c) deeming rule in s. 40(5)(c) applies for purposes of the preconditions in s. 40(3.3) as to whether s. 40(3.4) applies
2003-03-14 26 February 2003 External T.I. 2002-0163625 F - FONDS RESERVES GARANTIS AU DECES Income Tax Act - Section 146 - Subsection 146(8.8) FMV of RRSP’s segregated fund assets was not less than the amount guaranteed by the insurer
14 February 2003 External T.I. 2002-0173195 F - Transfer of Shares Income Tax Act - Section 6 - Subsection 6(1) - Paragraph 6(1)(a) s. 6(1)(a) generally applicable to gift of shares by majority owner to key employee, but not to employee son
Income Tax Act - Section 69 - Subsection 69(1) - Paragraph 69(1)(b) s. 69(1)(b) rather than s. 6(1)(a) generally applicable to gift of majority ownership of CCPC to employee son
11 March 2003 Internal T.I. 2002-0180997 F - CONGE A TRAITEMENT DIFFERE Income Tax Regulations - Regulation 6801 - Paragraph 6801(a) - Subparagraph 6801(a)(v) timing of taxation from breaking Reg. 6801(a)(vi) depends on timing of break decision/ full-timer must return to full-time work
Income Tax Regulations - Regulation 6801 - Paragraph 6801(a) - Subparagraph 6801(a)(iv) employee can reduce the leave in order to reduce the resumed-work requirement
13 March 2003 Internal T.I. 2003-0183697 F - FRAIS DE GARDE Income Tax Act - Section 63 - Subsection 63(3) - Child Care Expense child care expenses can include liquidated damages for early termination of daycare contract
2003-03-07 4 March 2003 External T.I. 2002-0150985 F - TRANSFERT-RESIDENCE PRINCIPALE Income Tax Act - Section 40 - Subsection 40(2) - Paragraph 40(2)(b) s. 40(2)(b) deduction available on transfer of residence to wholly-owned corporation
28 February 2003 External T.I. 2002-0163425 F - LEGS PARTICULIER AVEC CHARGE ET REER Income Tax Act - Section 146 - Subsection 146(1) - Refund of Premiums particular legacy paid out of RRSP of deceased annuitant can qualify as refund of premiums even if it is charged with another legacy
6 March 2003 External T.I. 2002-0166855 F - CADEAU EN QUASI-SPECES Income Tax Act - Section 6 - Subsection 6(1) - Paragraph 6(1)(a) cash equivalent exclusion from accommodation of employee gifts and awards
5 February 2003 External T.I. 2002-0178395 F - PARTIE 1.3 AIDE GOUVERNEMENTAL/SURPLUS Income Tax Act - Section 181.2 - Subsection 181.2(3) - Paragraph 181.2(3)(a) government assistance disclosed in the notes as being applied to reduce capital property cost, is not surplus
5 February 2003 External T.I. 2002-0178405 F - PARTIE 1.3 CHEQUE DEPOT EN CIRCULATION Income Tax Act - Section 181.2 - Subsection 181.2(3) - Paragraph 181.2(3)(c) bank overdrafts increase the bank deposit balance or reduce the bank overdraft/ outstanding cheques, although not amounts paid, are reflected to the extent in balance sheet
5 February 2003 External T.I. 2002-0178415 F - PARTIE 1.3 AVANCES SUR CONTRAT Income Tax Act - Section 181.2 - Subsection 181.2(3) - Paragraph 181.2(3)(c) deferred revenue included in capital only to the extent of actual advances
5 February 2003 External T.I. 2003-0183055 F - PARTIE 1.3 ACTIF UTILISE Income Tax Act - Section 181.4 - Paragraph 181.4(a) future income tax asset is not an asset used or held by the corporation
5 February 2003 External T.I. 2003-0183065 F - FASB 143 ET PARTIE 1.3 Income Tax Act - Section 181.4 - Paragraph 181.4(a) US accounting standards can potentially be taken into account
2003-02-21 19 February 2003 Internal T.I. 2002-0169967 F - ARREARAGES-PENSION ALIMENTAIRE Income Tax Act - Section 56.1 - Subsection 56.1(4) - Support Amount settlement payment of past and future support payments was not a support amount
18 February 2003 External T.I. 2003-0182325 F - RAP LIEN PRINCIPAL DE RESIDENCE Income Tax Act - Section 146.01 - Subsection 146.01(2) - Paragraph 146.01(2)(a.1) individual co-owning a residence that was leased to her and spouse was disqualified if it was used as her principal place of residence, i.e., it had exclusive kitchen, bathroom and bedroom
2003-02-14 11 December 2002 External T.I. 2002-0146465 F - Article XVI Canada-E.U. Treaties - Income Tax Conventions - Article 16 income earned by S Corp. of US athlete was taxable under Art. 16
28 January 2003 External T.I. 2002-0147405 F - Crédit d'impôt pour emploi à l'étranger Income Tax Act - Section 122.3 - Subsection 122.3(1) leave periods in Canada count towards the period of 6 months’ employment under foreign project if not terminated before leave commences
Income Tax Act - Section 115 - Subsection 115(1) - Paragraph 115(1)(a) - Subparagraph 115(1)(a)(i) leave period in Canada counted towards the 6-month period required under s. 122.3(1) of employment on performing services on foreign project
30 January 2003 Internal T.I. 2002-0157307 F - Article 86.1 et fractions d'action Income Tax Act - Section 86.1 - Subsection 86.1(2) - Paragraph 86.1(2)(b) distribution of fractional shares and their immediate cash sale complied with s. 86.1(2)(b)
27 January 2003 External T.I. 2002-0169385 F - Un serveur et l'établissement stable Treaties - Income Tax Conventions - Article 5 Canadian servers of Swiss company would not be a PE if sales of its product not made through the website

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