Translations of recent severed letters

Bundle Date Translated severed letter Summaries under Summary descriptor
2001-06-22 21 June 2001 External T.I. 2001-0086285 F - Disposition transitoire à 112(3) Income Tax Act - Section 248 - Subsection 248(1) - Share condition re financing the redemption of a preferred share included part of a preferred share
General Concepts - Transitional Provisions and Policies transitional provision re “share” to be applied on a share-by-share basis
2001-06-08 18 May 2001 External T.I. 2000-0040405 F - Revenu protégé - options Income Tax Act - Section 55 - Subsection 55(2.1) - Paragraph 55(2.1)(c) ACB increase to options as a result of s. 52(1) reduced the safe income otherwise allocable to the shares acquired on the options’ exercise
Income Tax Act - Section 52 - Subsection 52(1) s. 15(1) benefit on stock option grant added to options’ cost under s. 52(1)
4 June 2001 External T.I. 2000-0047145 F - Revenu protégé - crédit impôt investis Income Tax Act - Section 55 - Subsection 55(2.1) - Paragraph 55(2.1)(c) investment tax credit does not reduce safe income
5 June 2001 External T.I. 2000-0055765 F - Revenu gagné en main Income Tax Act - Section 55 - Subsection 55(2.1) - Paragraph 55(2.1)(c) s. 85(1) exchange of common shares for preferred shares transferred the safe income on hand to the pref
Income Tax Act - Section 248 - Subsection 248(1) - Small Business Corporation purification transaction accords with object and spirit of Act
10 May 2001 Internal T.I. 2001-0065677 F - SIGNIFICATION DE "MOMENT DONNÉ" Income Tax Act - Section 6 - Subsection 6(21) choice of time to calculate the loss is generally that of the taxpayer
28 May 2001 Internal T.I. 2001-0066147 F - ALIMENTS - MACHINES DISTRIBUTRICES Income Tax Act - Section 67.1 - Subsection 67.1(2) - Paragraph 67.1(2)(c) s. 67.1(2)(c) exception would apply to food and beverages sold by employer through vending machines
31 May 2001 External T.I. 2001-0066215 F - Clause de survie Income Tax Act - Section 70 - Subsection 70(6) 30- or 60-day survivorship clause in will does not preclude application of s. 70(6)
1 June 2001 Internal T.I. 2001-0066297 F - CREDIT EQUIVALENT - PENSION ALIMENTAIRE Income Tax Act - Section 118 - Subsection 118(5) legal determination would be required as to whether a subsequent agreement which purported to eliminate a support obligation for a child under a court order, had that effect
1 June 2001 External T.I. 2001-0075455 F - Remaniement et capital versé Income Tax Act - Section 86 - Subsection 86(2.1) PUC reduction under s. 86(2.1) of new shares to PUC of old shares
Income Tax Act - Section 84 - Subsection 84(5) no s. 84(3) deemed dividend on s. 86 reorg by virtue of ss. 86(2.1) and 84(5)
22 May 2001 Internal T.I. 2001-0083987 F - EMPLOYEUR PAYE IMPOT POUR EMPLOYÉ Income Tax Act - Section 6 - Subsection 6(1) - Paragraph 6(1)(a) employers’ reimbursement of employees’ reassessments for participating in employer’s scheme were a taxable benefit
2001-05-25 10 May 2001 Internal T.I. 2001-0065737 F - ÉCHANGE DE BIEN - 13(4) Income Tax Act - Section 13 - Subsection 13(4) - Paragraph 13(4)(d) s. 13(4)(d) provides that the recapture which was avoided, is subtracted from the UCC of the replacement property, and does not eliminate class continuity
22 May 2001 External T.I. 2000-0021095 F - DEMUTULISATION NON-RESIDENT Income Tax Act - Section 139.1 - Subsection 139.1(16) non-resident interest person needs to make the election for s. 139.1(16) to apply – if so, per s. 139.1(16)(k), no Part XIII tax applicable to individual re the cash payment
Income Tax Act - Section 139.1 - Subsection 139.1(15) potential application of Pt. XIII tax to premiums paid by non-resident corporation
22 May 2001 External T.I. 2000-0047245 F - Divorce Income Tax Act - Section 251 - Subsection 251(1) - Paragraph 251(1)(c) reciprocal transactions completed after divorce would be non-arm’s length
Income Tax Act - Section 84.1 - Subsection 84.1(1) sale of ex-wife’s shares of Opco (acquired in marriage settlement) to new Holdco of her ex-husband for Holdco note would engage s. 84.1 if these were “reciprocal transactions”
16 May 2001 External T.I. 2000-0053145 F - BIEN ETRANGER MEME JOUR VENTE/ACHAT Income Tax Act - Section 54 - Adjusted Cost Base no technical limitation on increasing ACB in investments through selling and buying on same day
16 May 2001 External T.I. 2000-0053585 F - IGS SOCIETE DE PERSONNES Income Tax Act - Section 181.2 - Subsection 181.2(1) corporation would calculate its capital re a partnership that was a securities trader under s. 181.2 rather than s. 181.3
29 May 2001 External T.I. 2000-0055915 F - DEDUCTIBILITE DES COMMISSIONS - ASSURANCE Income Tax Act - Section 18 - Subsection 18(9.02) background to s. 18(9.02)
14 May 2001 Internal T.I. 2001-0065687 F - VENTE CREANCE A ESCOMPTE Income Tax Act - Section 248 - Subsection 248(1) - Disposition - Paragraph (b) - Subparagraph (b)(i) blended monthly payments of interest and principal received pursuant to a mortgage acquired at a discount each gave rise to a capital gain
Income Tax Act - Section 43 - Subsection 43(1) apportioned ACB of discounted mortgage that is disposed of with each blended payment is determined by apportioning the discount
Income Tax Act - Section 9 - Computation of Profit holder on income account of a mortgage can choose to recognize the discount only after he has recovered his purchase price through the blended principal payments
Income Tax Act - Section 20 - Subsection 20(14) application of s. 20(14) to acquisition of mortgage
10 May 2001 Internal T.I. 2001-0065697 F - SOCIÉTÉ EXERCANT UNE PROFESSION LIBERALE General Concepts - Illegality where profession is carried on in a corporation contrary to the regulatory requirements, the corporate income is earned by the professional
Income Tax Act - Section 9 - Nature of Income income earned by a professional corporation contrary to the professional rules is personal income of the professional
10 May 2001 External T.I. 2001-0065705 F - DEDUCTION Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(c) - Subparagraph 20(1)(c)(i) interest deductible to the extent of preferred shares dividends received, but not deductible at all for bonds acquired at a negative spread
Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(c) s. 12(1)(c) requires the full inclusion of interest on bond acquired at a higher rate of interest, without an interest deduction
14 May 2001 Internal T.I. 2001-0065717 F - PAIEMENT INCITATIF REVENUE DE LOCATION Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(b) - Capital Expenditure v. Expense - Current expense vs. capital acquisition capital expenditures made by the landlord as tenant inducements are not deductible as capital expenditures
10 May 2001 Internal T.I. 2001-0065727 F - AVANTAGE - FONCTIONNEMENT AUTOMOBILE Income Tax Act - Section 6 - Subsection 6(1) - Paragraph 6(1)(l) s. 6(1)(l) can include a benefit relating to the operation of an automobile in the income of an employee of a member of a partnership
Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(y) unlike standby benefit, operating benefit for an employee of a partnership member is addressed by s. 6(1)(l)
10 May 2001 Internal T.I. 2001-0065817 F - WEB SITE - SITE INTERNET Income Tax Regulations - Schedules - Schedule II - Class 8 - Paragraph 8(i) general (non-software or computer) capital expenditures on website development generally includible in Class 8(i)
10 May 2001 Internal T.I. 2001-0065827 F - FINES + PENALTIES - INTÉRETS ET PÉNALITÉS Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(t) s. 18(1)(t) enacted for greater certainty
Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(a) - Income-Producing Purpose criteria of public policy and inevitability in IT-104R2 no longer applicable re fines and penalties/ provincial interest and penalties are non-deductible
10 May 2001 Internal T.I. 2001-0066047 F - CRITERES RÉSIDENCES D'ACCUEIL Income Tax Act - Section 81 - Subsection 81(1) - Paragraph 81(1)(h) taxpayer must ordinarily reside at the place as a principal residence
10 May 2001 Internal T.I. 2001-0066067 F - SOCIÉTÉ DE PERSONNES - PARTAGE REVENU Income Tax Act - Section 53 - Subsection 53(2) - Paragraph 53(2)(c) - Subparagraph 53(2)(c)(v) salary paid to partners is treated as drawings and is an ACB deduction rather than an income deduction
Income Tax Act - Section 96 - Subsection 96(1) - Paragraph 96(1)(f) partner salaries are non-deductible
10 May 2001 Internal T.I. 2001-0066107 F - TABLE RONDE - QUESTION 32 Income Tax Act - Section 39 - Subsection 39(1) - Paragraph 39(1)(a) parenthetical exclusion prevents double taxation to a NAL transferee otherwise arising from the deemed high capital cost under s. 13(7)(e)(iii) but with no ACB step-up under s. 69(1)(b)

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