Translations of recent severed letters

Bundle Date Translated severed letter Summaries under Summary descriptor
2002-11-08 15 November 2002 Internal T.I. 2002-0162427 F - Price Adjustment Clause & 85(7.1) Income Tax Act - Section 85 - Subsection 85(1) - Paragraph 85(1)(e.2) significant FMV shortfall suggested that a benefit was desired to be conferred
General Concepts - Effective Date large FMV discrepancy suggested lack of bona fide valuation so that price adjustment clause need not be applied/ if applied, s. 85(1) election must be amended
Income Tax Act - Section 85 - Subsection 85(7) amended s. 85(1) election must be filed if price-adjustment clause applied
14 November 2002 Internal T.I. 2002-0169957 F - "Exercice" - Effet de 134.2 Income Tax Act - Section 134.2 - Subsection 134.2(2) s. 134.2 election has no effect on corporation’s fiscal period
Income Tax Act - Section 249.1 - Subsection 249.1(1) s. 134.2 election affects only the corporation's current taxation year and not its fiscal period
6 November 2002 External T.I. 2002-0170545 F - Section 55(3)(a) - Exception55(3)(a) Income Tax Act - Section 55 - Subsection 55(4) s. 55(4) inapplicable where parent retained de jure control primarily for protection of their economic interest
2002-10-25 14 November 2002 External T.I. 2002-0136485 F - REVENU D'ENTREPRISE ET REVENU DE BIEN Income Tax Act - Section 129 - Subsection 129(4) - Income or Loss long-term rental of excess space unlikely to be assimilated to business income
21 November 2002 External T.I. 2002-0141455 F - TITRES DETENUS PAR UN FIDUCIAIRE Income Tax Act - Section 108 - Subsection 108(1) - Trust - Paragraph (a.1) exclusion of s. 7(2) trusts for greater certainty
30 October 2002 Internal T.I. 2002-0146787 F - PRET SANS INTERET A UNE FILIALE Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(c) - Subparagraph 20(1)(c)(i) interest incurred to make interest-free loans to non-resident subsidiary was deductible if an expectation of income from its shares
5 November 2002 External T.I. 2002-0160815 F - CDC HYPOTHEQUE Income Tax Act - Section 89 - Subsection 89(1) - Capital Dividend Account - Paragraph (d) change in policy re CDA credit for life insurance proceeds paid to creditor is retroactive re the computation
5 November 2002 External T.I. 2002-0161695 F - CDC HYPOTHEQUE Income Tax Act - Section 89 - Subsection 89(1) - Capital Dividend Account - Paragraph (d) no credit to CDA of creditor on receiving life insurance proceeds pursuant to pledged policy of debtor
7 November 2002 External T.I. 2002-0168795 F - REER TRANSFERT D'ACTIONS AU RENTIER Income Tax Act - Section 146 - Subsection 146(8) shares can be distributed out of RRSP to annuitant – but with their FMV being included as a benefit
14 November 2002 Internal T.I. 2002-0171377 F - REER PLACEMENT ADMISSIBLE Income Tax Act - Section 204 - Qualified Investment - Paragraph (a) money means currency
2002-10-11 28 October 2002 External T.I. 2002-0117595 F - REVENU EXPERT-COMPTABLE Income Tax Act - Section 9 - Nature of Income accountants required to individually recognize professional income earned by them as employees of an NPO corporation
30 October 2002 External T.I. 2002-0126045 F - TRANSFERT A UN MINEUR Income Tax Act - Section 248 - Subsection 248(1) - Specified Member contributions of the specified member to the partnership business must be instrumental to its success
30 October 2002 External T.I. 2002-0132745 F - RENOVATION A UN IMMEUBLE Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(b) - Capital Expenditure v. Expense - Improvements v. Repairs or Running Expense expenditure to restore a building to its original condition may be a current expense
30 October 2002 Internal T.I. 2002-0134077 F - ATTRIBUTION DES GAINS EN CAPITAL Income Tax Act - Section 74.2 - Subsection 74.2(1) indirect transfer where individuals transfer shares to their Holdcos, who transfer such shares to the individuals’ respective spouses
Income Tax Act - Section 74.5 - Subsection 74.5(6) presence of indirect transfer through Holdcos for s. 74.5(1) purposes reinforced by s. 74.5(6)
28 October 2002 External T.I. 2002-0134785 F - Partitioning of Shares Income Tax Act - Section 248 - Subsection 248(21) s. 248(21) could apply to partitioning a share if the corporation could issue fractional shares on the partition satisfying the FMV test, and similarly for partitioning MFT units (viewed as a single property)
Income Tax Act - Section 98 - Subsection 98(3) partners not permitted to receive divided interest in shares on s. 98(3) wind-up
Income Tax Act - Section 248 - Subsection 248(1) - Property interest in trust is a single property even if held as units
Income Tax Act - Section 248 - Subsection 248(20) s. 248(20) might apply if a partition results in the issuance of whole shares
2 October 2002 Internal T.I. 2002-0135807 F - Lumpsum Somme Forfaitaire Reg 102 / 103 Income Tax Regulations - Regulation 103 - Subsection 103(4) - Paragraph 103(4)(c) withholding on retiring allowance paid in periodic instalments determined under Reg. 102(1)
29 October 2002 External T.I. 2002-0135815 F - BONI CADEAUX RECOMPENSES Income Tax Act - Section 6 - Subsection 6(1) - Paragraph 6(1)(a) bonus received by employees under a profit-sharing program not covered by gifts exclusion in ITTN No. 22
25 October 2002 External T.I. 2002-0137705 F - Butterfly Income Tax Act - Section 85 - Subsection 85(1) - Paragraph 85(1)(e) CCRA will permit UCC to be split on a pro rata basis under s. 85(1)(e)(i) where the butterfly entails s. 85(1) drop-downs to Newco subs of DC followed by their transfers to TCs
31 October 2002 External T.I. 2002-0141265 F - NATURE D'UN BIEN APRES ROULEMENT Income Tax Act - Section 9 - Capital Gain vs. Profit - Real Estate property does not change its character as capital property where transferred to related corporation under s. 85(1) for immediate sale
Income Tax Act - Section 69 - Subsection 69(11) no GAAR abuse where transfer of appreciated capital property to affiliated Lossco for immediate sale
4 November 2002 External T.I. 2002-0158885 F - Alloc. of Safe Inc. & Disc. Div. Shares Income Tax Act - Section 55 - Subsection 55(2.1) - Paragraph 55(2.1)(c) payment of dividends on discretionary dividend shares with no liquidation entitlement would not result in a significant reduction
4 November 2002 Internal T.I. 2002-0160697 F - REPARTITION DU PLAFOND Income Tax Act - Section 125 - Subsection 125(5) - Paragraph 125(5)(a) s. 125(5)(a) did not apply to a CCPC for its 2nd 2000 taxation year resulting from an acquisition of control causing it to be associated with a different CCPC
22 October 2002 External T.I. 2002-0162835 F - Recbles Recd. after Disp. of Farm. Bus. Income Tax Act - Section 28 - Subsection 28(5) income stabilization amounts that were receivable at the time of s. 85(1) drop-down of cash-method farming business were deemed to be income when subsequently received
2002-09-27 17 October 2002 External T.I. 2002-0130915 F - PAIEMENT FORFAITAIRE RETROACTIF Income Tax Act - Section 110.2 - Subsection 110.2(1) - Qualifying Amount - Paragraph (a) - Subparagraph (a)(i) out-of-court settlement did not qualify
24 October 2002 Internal T.I. 2002-0140527 F - PENSION ALIMENTAIRE Income Tax Act - Section 56.1 - Subsection 56.1(4) - Support Amount no discretion as to use of cheques if required to endorse them back to the payor
17 October 2002 Internal T.I. 2002-0159107 F - SALAIRE PAYE D'AVANCE Income Tax Act - Section 5 - Subsection 5(1) good argument that an advance to be repaid out of the final pay was advance wages rather than a loan
24 October 2002 External T.I. 2002-0160715 F - ASSURANCE-VIE IMPOSITION AUX TROIS ANS Income Tax Act - Section 12.2 - Subsection 12.2(3) determination of exempt policy status within bailiwick of insurer
18 October 2002 External T.I. 2002-0163615 F - Waiver of Capital Dividend Income Tax Act - Section 56 - Subsection 56(2) s. 56(2) inapplicable to waiver of capital dividend
2002-09-13 31 July 2002 Internal T.I. 2002-0136937 F - Placement Français "Assurance-salaire-vie Treaties - Income Tax Conventions - Article 18 withdrawal from French employee-contribution plan (assurance-salaire-vie) was not a “pension”
Income Tax Act - Section 233.3 - Subsection 233.3(1) - Reporting Entity cost amount of foreign retirement plan may have been stepped up under s. 128.1(1)
4 October 2002 Internal T.I. 2001-010564A F - PENSION ALIMENTAIRE-ARRERAGES Income Tax Act - Section 60 - Paragraph 60(b) lump sum payment in settlement of periodic support payments in arrears is an amount payable on a periodic basis
General Concepts - Payment & Receipt set-off does not constitute payment unless the parties so agree
2 October 2002 External T.I. 2002-0118815 F - DIABETE JUVENILE Income Tax Act - Section 118.3 - Subsection 118.3(1) - Paragraph 118.3(1)(a.1) child with juvenile diabetes does not generate the infirm credit, including under para. (a.1)

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