Translations of recent severed letters

Bundle Date Translated severed letter Summaries under Summary descriptor
2014-01-15 11 October 2013 APFF Roundtable, 2013-0495671C6 F - Déduction d'une partie d'une créance irrécouvrable Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(p) - Subparagraph 20(1)(p)(i) 20(1)(p)(i) deduction for trade debts of a customer are determined on a receivable by receivable basis
Income Tax Act - Section 50 - Subsection 50(1) comparison of 20(1)(p)(i) and 50(1): latter requires full uncollectibility
2014-01-08 10 December 2013 External T.I. 2013-0480771E5 F - Winding-Up of a Corporation Income Tax Act - Section 88 - Subsection 88(2) deemed year end under s. 88(2)(a)(iv) is only for surplus computation purposes
2013-12-18 26 November 2013 External T.I. 2012-0449631E5 F - Amount deductible under paragraph 20(1)(e.2) Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(e.2) reduction of deductible premium amount re pledged policy where net cost of pure insurance (“NCPI”) is lower than premiums
15 November 2013 Internal T.I. 2013-0478621I7 F - Transfer of intangibles - TP adjustments Income Tax Act - Section 247 - New - Subsection 247(2) group sale with Canco not charging for intangibles should engage s. 247(2)
Income Tax Act - Section 56 - Subsection 56(2) secondary adjustment re group sale with Canco not charging for intangibles
Income Tax Act - Section 69 - Subsection 69(4) s. 69(4) inapplicable where grandchild Canco undercharges for asset sale, enhancing sales proceeds received by ultimate U.S. parent
2013-12-11 18 November 2013 Internal T.I. 2011-0399581I7 F - Application of section 212(1)(d) ITA Income Tax Act - Section 212 - Subsection 212(1) - Paragraph 212(1)(d) - Subparagraph 212(1)(d)(i) seriatim benchmark lump sums, although not royalties, came within s. 212(1)(d)
Income Tax Act - Section 212 - Subsection 212(1) - Paragraph 212(1)(d) - Subparagraph 212(1)(d)(viii) cost-sharing agreement with catch-up payment provisions qualified
Treaties - Income Tax Conventions - Article 12 contingent payments came within broad Treaty definition of royalty
10 July 2013 Internal T.I. 2013-0475501I7 F - Amounts returned to trustee/beneficiary Income Tax Act - 101-110 - Section 104 - Subsection 104(13) family trust income distributed to children but repaid as reimbursement to father for family expenses was income to him, not them
Income Tax Act - 101-110 - Section 104 - Subsection 104(24) distributions to children immediately paid to father
Income Tax Act - 101-110 - Section 104 - Subsection 104(6) distributions to children immediately paid to father were deductible even though received by children as his agents
Income Tax Act - 101-110 - Section 105 - Subsection 105(1) payment of income distributions by children to father not a benefit under the trust
Income Tax Act - Section 56 - Subsection 56(4) payment of distributed family trust income by children to father did not engage s. 56(4) as it was only potential income to him
11 October 2013 APFF Roundtable Q. 18, 2013-0495851C6 F - Safe income adjustments Income Tax Act - Section 54 - Adjusted Cost Base downward adjustment under price adjustment clause reduces shares' ACB
Income Tax Act - Section 55 - Subsection 55(2.1) - Paragraph 55(2.1)(c) CRA post-closing reassessment of Target's pre-closing income changes its SIOH
2013-12-04 19 November 2013 External T.I. 2012-0455731E5 F - Interprovincial income allocation Income Tax Regulations - Regulation 402 - Subsection 402(3) where franchisor takes over Ontario franchisee's operations, its royalties from other Ontario franchisees are not assimilated to the Ontario PE
19 November 2013 External T.I. 2011-0414201E5 F - Coop, ristournes, société de personne Income Tax Act - Section 135 - Subsection 135(1) a Coop dealing with an LP of which it is a partner has the LP as its customer, and not the LP customers
Income Tax Act - Section 96 - Subsection 96(1) - Paragraph 96(1)(a) customers of LP rather than of members
11 October 2013 Roundtable, 2013-0495801C6 F - Dividend Paid to Trust and Schedule 3 of T2 Income Tax Act - 101-110 - Section 104 - Subsection 104(19) s. 104(19) designation is not effective until year end of trust
Income Tax Act - Section 186 - Subsection 186(1) - Paragraph 186(1)(b) s. 104(19)-designated dividend is not received for s. 186(1)(b) purposes until year end of trust
11 October 2013 APFF Roundtable, 2013-0495811C6 F - De Facto Control Income Tax Act - Section 256 - Subsection 256(5.1) statutory right of chair to tie-breaking vote does not per se confer de facto control
2013-11-27 11 October 2013 Roundtable, 2013-0495281C6 F - Question 9 - APFF Round Table Income Tax Act - Section 212 - Subsection 212(1) - Paragraph 212(1)(l) transfer to RRSP or RRIF of surviving non-resident spouse: SIN required; payment can be made directly to RRSP/RRIF of surviving spouse in accordance with joint instructions even where no specific non-will designation is made
Income Tax Act - Section 146 - Subsection 146(8.1) deemed receipt of refund of premiums for amount paid to executor, with deemed benefit to recipient spouse
Income Tax Act - Section 146.3 - Subsection 146.3(6.1) transfer of RRIF by executor to RRIF of surviving spouse
Income Tax Act - Section 212 - Subsection 212(1) - Paragraph 212(1)(q) direct transfer to RRIF of surviving non-resident spouse
29 October 2013 External T.I. 2013-0489771E5 F - Internal Reorganization - 55(3)(a) Income Tax Act - Section 248 - Subsection 248(10) estate distribution of corporation followed by transfer of assets from related corporation could be part of same series
Income Tax Act - Section 55 - Subsection 55(3.2) - Paragraph 55(3.2)(d) s. 55(3.2)(d) application to estate distribution of corporation to 3 sibling beneficiaries does not deem them to be related to each other
Income Tax Act - Section 55 - Subsection 55(3) - Paragraph 55(3)(a) - Subparagraph 55(3)(a)(v) relief under s. s. 256(7)(a)(i)(C) or (D) is relevant to s. 55(3.1)(b)(ii), but not to ss. 55(3)(a)(i) to (v)
11 October 2013 APFF Roundtable, 2013-0493651C6 F - Affiliated persons and de facto control Income Tax Act - Section 256 - Subsection 256(5.1) holding of relatively large note where debtor has a iliquid business could give rise to de facto control
Income Tax Act - Section 40 - Subsection 40(3.61) exception unavailable for inter vivos trust
11 October 2013 APFF Roundtable, 2013-0495781C6 F - GRIP Exceeds Safe Income Income Tax Act - Section 89 - Subsection 89(1) - Excessive Eligible Dividend Designation detailed review required to determine whether creation of preferred share dividend to flow out GRIP in excess of SIOH generatd EEDD
11 October 2013 APFF Roundtable, 2013-0495861C6 F - Question 20 - APFF Round Table Income Tax Act - Section 248 - Subsection 248(1) - Specified Member specified member status determined re involvement in daily management or activities
Income Tax Act - Section 40 - Subsection 40(3.14) - Paragraph 40(3.14)(a) not a limited partner if unlimited liability to third parties
11 October 2013 APFF Roundtable, 2013-0492791C6 F - Gift by will Income Tax Act - Section 118.1 - Subsection 118.1(5) potential executor discretion re corporate/estate split of gift might preclude as "gift"
11 October 2013 APFF Roundtable, 2013-0495721C6 F - APFF 2013- Round table question 7 Income Tax Act - Section 75 - Subsection 75(2) Sommerer FMV sale exception maintained with price adjustment clause
General Concepts - Fair Market Value - Shares FMV is a question of fact within TCC's discretion
11 October 2013 APFF Roundtable, 2013-0493671C6 F - Testamentary trust beneficiary of inter vivos trust Income Tax Act - 101-110 - Section 108 - Subsection 108(1) - Testamentary Trust testamentary trust will lose its status if it is designated as the beneficiary of an inter vivos trust
2013-11-20 7 October 2013 External T.I. 2013-0500941E5 F - Actif utilisé dans une entreprise active Income Tax Act - 101-110 - Section 110.6 - Subsection 110.6(1) - Qualified Small Business Corporation Share rental property of partnership leased as to 15% to an active business partner did not qualify as active business asset

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