Translations of recent severed letters

Bundle Date Translated severed letter Summaries under Summary descriptor
2018-12-12 5 October 2018 APFF Roundtable Q. 11, 2018-0768821C6 F - Tax on Split Income Income Tax Act - Section 120.4 - Subsection 120.4(1) - Excluded Amount - Paragraph (e) - Subparagraph (e)(i) dividends derived from stock portfolio of Holdco excluded because stock portfolio not a related business or not a business
Income Tax Act - Section 120.4 - Subsection 120.4(1) - Related Business - Paragraph (a) - Subparagraph (a)(i) stock market investing business of child's holdco not a related business as father not involved
5 October 2018 APFF Roundtable Q. 12, 2018-0768831C6 F - Tax on Split Income and Partnership Income Tax Act - Section 120.4 - Subsection 120.4(1) - Split Income - Paragraph (a) - Subparagraph (a)(i) family partnership investing in designated stock exchange shares not subject to TOSI rules
Income Tax Act - 101-110 - Section 103 - Subsection 103(1.1) having non-contributing children as members of a family stock market partnership is subject to challenge under s. 103
Income Tax Act - Section 96 - Subsection 96(1.8) having non-contributing children in a family portfolio investment partnership subject to potential challenge under ss. 74.1 and 96(1.8)
5 October 2018 APFF Roundtable Q. 13, 2018-0778661C6 F - Tax on Split Income Income Tax Act - Section 120.4 - Subsection 120.4(1) - Excluded Shares returns to a spouse and older children from a Holdco in which they reinvested their Opco capital gains exemption could qualify as excluded amounts
Income Tax Act - Section 120.4 - Subsection 120.4(1) - Arm's Length Capital no exclusion for arm’s length capital contribution where contribution derived from capital gain from related business
Income Tax Act - Section 120.4 - Subsection 120.4(1) - Excluded Amount - Paragraph (e) - Subparagraph (e)(i) amounts not derived from a business were excluded amounts
5 October 2018 APFF Roundtable Q. 14, 2018-0768851C6 F - Avantage imposable découlant de l’utilisation d’un aéronef Income Tax Act - Section 15 - Subsection 15(1) shareholder benefit from corporate aircraft reduced by an interest-free loan made by the shareholder to fund its purchase
5 October 2018 APFF Roundtable Q. 15, 2018-0768861C6 F - Share exchange and statute of limitation Income Tax Act - Section 152 - Subsection 152(4) a price adjustment clause can operate re statute-barred transactions to affect a tax attribute that is used in the current year
General Concepts - Effective Date retroactive ACB adjustment under PAC to statute-barred transaction may be taken into account in a current relevant transaction
5 October 2018 APFF Roundtable Q. 16, 2018-0768871C6 F - Dépenses de bureau à domicile et d’automobile Income Tax Act - Section 13 - Subsection 13(7) - Paragraph 13(7)(g) example of proration of capped s. 13(7)(g) capital cost
Income Tax Act - Section 13 - Subsection 13(21) - Undepreciated Capital Cost - A capital cost of co-ownership interest
Income Tax Act - Section 13 - Subsection 13(21) - Depreciable Property depreciable property must be owned
Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(a) - Incurring of Expense payment of expenses of taxpayer by another does not preclude “incurring” by taxpayer
Income Tax Act - Section 9 - Nature of Income payment of taxpayer’s expenses by another might give rise to s. 9 or 80 inclusion
5 October 2018 APFF Roundtable Q. 17, 2018-0768881C6 F - entreprise exploitée activement – revenu de location Income Tax Act - Section 125 - Subsection 125(7) - Active Business Carried On by a Corporation question of fact whether a CCPC with too many employees to have a specified investment business carries on a business
Income Tax Act - Section 125 - Subsection 125(7) - Specified Investment Business principal purpose means main or chief objective
5 October 2018 APFF Financial Strategies and Financial Instruments Roundtable Q. 1, 2018-0761521C6 F - Life insurance policy as share redempt. proceeds Income Tax Act - Section 148 - Subsection 148(7) more gain will be realized if an appreciated life insurance policy is distributed as redemption proceeds rather than a dividend-in-kind
5 October 2018 APFF Financial Strategies and Instruments Roundtable Q. 2, 2018-0765791C6 F - Tax on Split Income Income Tax Act - Section 120.4 - Subsection 120.4(1) - Excluded Shares - Paragraph (a) - Subparagraph (a)(i) shares of a rental property company potentially may qualify as excluded shares for TOSI purposes
5 October 2018 APFF Financial Strategies and Financial Instruments Roundtable Q. 3, 2018-0765801C6 F - Tax on Split Income Income Tax Act - Section 120.4 - Subsection 120.4(1) - Split Income - Paragraph (e) - Subparagraph (e)(ii) deemed s. 104(21) capital gains retained their character as stock market gains
Income Tax Act - Section 120.4 - Subsection 120.4(1) - Related Business - Paragraph (a) - Subparagraph (a)(ii) related business if children manage investment business of trust whose interest income is distributed to mother
Income Tax Act - Section 120.4 - Subsection 120.4(1.1) - Paragraph 120.4(1.1)(c) - Subparagraph 120.4(1.1)(c)(ii) s. 120.4(1.1)(c)(ii) exclusion where investment portfolio business of spousal trust had been carried on directly by deceased husband
5 October 2018 APFF Financial Strategies and Instruments Roundtable Q. 4, 2018-0765811C6 F - Tax on Split Income Income Tax Act - Section 120.4 - Subsection 120.4(1) - Split Income - Paragraph (c) - Subparagraph (c)(ii) - Clause (c)(ii)(D) no TOSI on net rental income of spousal trust on properties managed by son if excluded amounts
Income Tax Act - Section 120.4 - Subsection 120.4(1.1) - Paragraph 120.4(1.1)(c) - Subparagraph 120.4(1.1)(c)(ii) exclusion where rental portfolio of spousal trust was a directly-conducted business of deceased husband
5 October 2018 APFF Financial Strategies and Instruments Roundtable Q. 5, 2018-0761561C6 F - Rachat de parts en cas d’invalidité Income Tax Act - Section 55 - Subsection 55(2.1) - Paragraph 55(2.1)(b) purpose of dividend is determined based on facts respecting the series
5 October 2018 APFF Financial Strategies and Instruments Roundtable Q. 7, 2018-0761511C6 F - Rollover to spousal trust on death Income Tax Act - Section 70 - Subsection 70(6) - Paragraph 70(6)(b) - Subparagraph 70(6)(b)(ii) tainting effect of the payment by a spousal trust of premiums on its policy on the lives of the children
5 October 2018 APFF Financial Strategies and Instruments Roundtable Q. 8, 2018-0761541C6 F - HBP withdrawals straddling two calendar years Income Tax Act - Section 146.01 - Subsection 146.01(2) - Paragraph 146.01(2)(d) factors considering in extending period for making backdated withdrawals
5 October 2018 APFF Financial Strategies and Instruments Roundtable Q. 10, 2018-0761551C6 F - Attribution rules and promissory note Income Tax Act - Section 74.5 - Subsection 74.5(2) - Paragraph 74.5(2)(b) accrued interest cannot be “paid” for s. 74.7 purposes by issuing a promissory note
General Concepts - Payment & Receipt promissory note could not be issued as payment in context of income attribution rules
5 October 2018 APFF Financial Strategies and Instruments Roundtable Q. 11, 2018-0761571C6 F - Missing info on disposition of principal residence Income Tax Act - Section 54 - Principal Residence - Paragraph (c) CRA is only waiving penalties for late-filed principal residence dispositions for 2017 and 2016 returns
Income Tax Act - Section 40 - Subsection 40(2) - Paragraph 40(2)(b) description of filing requirements
5 October 2018 APFF Financial Strategies and Instruments Roundtable Q. 12, 2018-0761581C6 F - Foreign Tax Credits related to mutual funds Income Tax Act - Section 126 - Subsection 126(1) CRA is no longer requesting country-by-country breakdowns of income derived from mutual funds in its FTC audits
2018-11-28 17 September 2018 External T.I. 2018-0751571E5 F - Adjusted cost base of property Income Tax Act - Section 66.3 - Subsection 66.3(3) s. 66.3(3) does not apply to the cost of shares received on a ss. 85(2) and (3) wind-up of a flow-through share partnership
Income Tax Act - Section 85 - Subsection 85(3) - Paragraph 85(3)(f) operation of s. 85(3)(f) on wind-up of flow-through LP not affected by s. 63.3(3)
2018-10-17 27 June 2018 External T.I. 2018-0745681E5 F - Wind-up of a partnership Income Tax Act - Section 84 - Subsection 84(3) no s. 84(3) dividend on cancellation of preferred shares of Opco held by partnership on its wind-up into Opco
Income Tax Act - Section 98 - Subsection 98(5) s. 98(5) inapplicable on simultaneous dissolving transfer of partnership interests
Income Tax Act - Section 28 - Subsection 28(1) - Paragraph 28(1)(f) application of s. 28(1)(f) on partnership wind-up
2018-10-10 27 June 2018 External T.I. 2018-0742881E5 F - Royalties under Canada Petroleum Resources Act Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(a) - Income-Producing Purpose Canadian Petroleum royalties generally deductible
2018-07-18 1 May 2018 External T.I. 2017-0709101E5 F - Travaux en cours Income Tax Act - Section 10 - Subsection 10(5) - Paragraph 10(5)(a) cost of professional practice WIP includes variable overheads and all related payroll costs, but not partner or shareholder-manager time

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