Translations of recent severed letters

Bundle Date Translated severed letter Summaries under Summary descriptor
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)
Income Tax Act - Section 69 - Subsection 69(1) - Paragraph 69(1)(b) absence of cost step-up to s. 69(1)(b) transferee does not produce a capital gain on subsequent disposition due to such gain being recapture pursuant to s. 13(7)(e)(iii)
25 May 2001 External T.I. 2001-0067415 F - CONSOLIDATION DE PERTES Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(c) related-person loss transfer transactions must be commercially reasonable to satisfy s. 20(1)(c)
Income Tax Act - Section 111 - Subsection 111(1) - Paragraph 111(1)(a) CCRA loss consolidation policy is available where Profitco’s income is FAPI/ requirements re transactions being commercially reasonable
15 May 2001 External T.I. 2001-0071085 F - FABRICATION AU CANADA Income Tax Regulations - Regulation 5202 - Qualified Activities product development, design and conception work was part of the manufacturing of those products, but such manufacturing took place outside Canada
29 May 2001 External T.I. 2001-0075245 F - SOCIETE DE GESTION DE PENSION Income Tax Act - Section 149 - Subsection 149(1) - Paragraph 149(1)(o.2) - Subparagraph 149(1)(o.2)(i) s. 149(1)(o.2)(i) corporation can be incorporated for the administration of more than one RPP – but cannot be incorporated to provide management services to other RPPs
Statutory Interpretation - Interpretation Act - Subsection 33(2) reference to administration of one pension plan included two or more
23 May 2001 External T.I. 2001-0077855 F - PLACEMENT ADMISSIBLE REER Income Tax Regulations - Regulation 4900 - Subsection 4900(8) did not extend to services rendered in connection with the company’s incorporation
16 May 2001 External T.I. 2001-0080495 F - OPTION D'ACHAT D'ACTIONS Income Tax Act - Section 7 - Subsection 7(1.1) CCPC status tested at time of stock option agreement
2001-05-11 27 April 2001 External T.I. 2000-0057055 F - INTERETS/OBLIGATIONS A COUPONS DETACHES Income Tax Regulations - Regulation 7000 - Subsection 7000(2) - Paragraph 7000(2)(b) application of Reg. 7000(2)(b) to acquisition of bond stripped of interest coupons
18 April 2001 External T.I. 2001-0074995 F - Indemnité journalière de grossesse de France Income Tax Act - Section 3 - Paragraph 3(a) French maternity allowances were taxable
2001-04-27 12 April 2001 External T.I. 2000-0050655 F - ASSURANCE MUTILATION/INVALIDITE Income Tax Act - Section 148 - Subsection 148(9) - Disposition - Paragraph (h) disability benefits under a policy providing life and accidental death and dismemberment insurance could be non-taxable
Income Tax Act - Section 89 - Subsection 89(1) - Capital Dividend Account personal injury amounts received pursuant to life insurance policy not added to CDA
23 March 2001 Internal T.I. 2000-0056097 F - Roulement interne Income Tax Act - Section 84 - Subsection 84(1) s. 84(1) deemed dividend where individual’s low-PUC common shares are exchanged with the corporation for high-PUC preferred shares and there is an s. 85(1) agreed amount at FMV
17 April 2001 External T.I. 2000-0056455 F - AVANTAGE IMPOSABLE-EMPLOYE Income Tax Act - Section 6 - Subsection 6(1) - Paragraph 6(1)(a) the distribution of employer shares to employees as beneficiaries of a discretionary trust is a s. 6(1)(a) benefit if it has the slightest connection to their employment

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