Translations of recent severed letters

Bundle Date Translated severed letter Summaries under Summary descriptor
2012-01-27 7 October 2011 APFF Roundtable Q. 23, 2011-0412111C6 F - Validity of Price Adjustment Clause General Concepts - Effective Date price adjustment clause does not require filing amended election
Income Tax Act - Section 85 - Subsection 85(7.1) validity of price adjustment clause does not depend on filing an amended election
2012-01-20 13 January 2012 Internal T.I. 2011-0414111I7 F - Deemed Interest Incomes - Exception 17(8) Income Tax Act - Section 17 - Subsection 17(8) - Paragraph 17(8)(a) - Subparagraph 17(8)(a)(ii) CFA 1's purchased debt of CFA 2 did not qualify as a loan or advance
4 January 2012 External T.I. 2011-0414731E5 F - Interaction between 84.1 and 83(2) ITA Income Tax Act - Section 83 - Subsection 83(2) no s. 83(2) election available for s. 84.1(1)(b) deemed dividend paid to non-shareholder
Income Tax Act - Section 84 - Subsection 84(7) s. 84(7) might contradict CRA position that no s. 83(2) election on s. 84.1 dividend to non-shareholder
2012-01-13 16 December 2011 External T.I. 2011-0419211E5 F - Choix à 45(2) Income Tax Act - Section 45 - Subsection 45(2) devisee of changed-use principal residence cannot benefit from s. 45(2) election by estate in years following testator’s death
2011-12-30 21 November 2011 External T.I. 2011-0422191E5 F - Price adjustment clause and redemption of shares General Concepts - Effective Date additional payment, pursuant to price adjustment clause, in year following shares; redemption is recognized then
Income Tax Act - Section 84 - Subsection 84(3) price adjustment payment recognized as s. 84(3) dividend when received
16 December 2011 External T.I. 2011-0412502E5 F - Remboursement - frais de scolarité Income Tax Act - Section 118.1 - Subsection 118.1(5) - Paragraph 118.1(5)(a) - Subparagraph 118.1(5)(a)(iii) credit can be claimed where employee is subsequently required to reimburse employer for employer-paid tuition
Income Tax Act - Section 118.6 - Subsection 118.6(1) - Qualifying Educational Program no benefit denying credit if employee is subsequently required to reimburse employer for employer-paid tuition
2011-12-23 6 December 2011 External T.I. 2011-0423181E5 F - Safe Income Income Tax Act - Section 55 - Subsection 55(2.1) - Paragraph 55(2.1)(c) where Shareholder with high SIOH Class F shares converts its low SIOH Class A shares on rollover basis into Class F shares, there is downward averaging of SIOH per share
12 December 2011 External T.I. 2011-0416801E5 F - Safe Income on Hand - Stub Period Income Tax Act - Section 55 - Subsection 55(2.1) - Paragraph 55(2.1)(c) safe income generally prorated in stub period
15 December 2011 Internal T.I. 2011-0413891I7 F - Récupération d'amortissement-Recapture CCA Income Tax Act - Section 129 - Subsection 129(4) - Income or Loss reasonable to pro-rate recapture of depreciation between active business income and property income based on relative periods of use
Income Tax Act - Section 13 - Subsection 13(1) successive business and property income use of rental property reflected in apportionment of source of ensuing recapture
7 October 2011 Roundtable, 2011-0411971C6 F - Appraisal Fees Deductibility Income Tax Act - Section 53 - Subsection 53(1) - Paragraph 53(1)(n) appraisal fees for valuing capital property for the purpose of its acquisition or disposition are an ACB addition
Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(b) - Capital Expenditure v. Expense - Improvements v. Repairs or Running Expense deductible appraisal fees to revalue fixed assets in accordance with IFRS
7 October 2011 APFF Roundtable Q. 4, 2011-0412071C6 F - Modifying a Capital Dividend Election General Concepts - Effective Date originally declared dividend not altered by subsequent resolution
Income Tax Act - Section 184 - Subsection 184(3) short-cut method for direct assessment of shareholders for excess amount
7 October 2011 APFF Roundtable Q. 29, 2011-0412131C6 F - Subsection 55(2) and Capital Dividend Account Income Tax Act - Section 89 - Subsection 89(1) - Capital Dividend Account - Paragraph (a) - Subparagraph (a)(i) - Clause (a)(i)A) CDA addition from application of s. 55(2)(c) is only available in the following years
Income Tax Act - Section 55 - Subsection 55(2) - Paragraph 55(2)(c) dividend paid in contemplation of subsequent arm’s length share sale is part of proceeds of that sale
2011-12-16 8 October 2010 Roundtable, 2010-0373291C6 F - Tuck-Under Transactions - Safe Income Extractions Income Tax Act - Section 245 - Subsection 245(4) Vaillancourt-Tremblay did not validate all tuck-under transactions
Income Tax Act - Section 84 - Subsection 84(2) CRA accepts use of tuck-under transactions to extract safe income
Income Tax Act - Section 55 - Subsection 55(2.1) - Paragraph 55(2.1)(c) safe income can be extracted using tuck-under
7 October 2011 Roundtable, 2011-0412121C6 F - Interaction between S. 84.1 and S. 85(2.1) Income Tax Act - Section 84.1 - Subsection 84.1(1) s. 84.1 can "apply" and thereby prevail over s. 85(2.1) even where there is no s. 84.1 grind
Income Tax Act - Section 85 - Subsection 85(2.1) s. 85(2.1) does not apply where s. 84.1(1) applies even if there is no grind under the s. 84.1(1)(a) formula
6 December 2011 External T.I. 2010-0384701E5 F - Décès contribuable - Immobilisation admissible Income Tax Act - Section 70 - Subsection 70(5.1) application of s. 70(5.1) to bequest of goodwill
General Concepts - Effective Date CRA policy of price adjustment clauses inapplicable where deferred sale price subsequently adjusted
Income Tax Act - Section 152 - Subsection 152(4.2) CRA policy for adjusting a statute-barred year for a reduction in the 5th year of staged-proceeds sale
9 December 2011 External T.I. 2011-0429321E5 F - Changement d'usage Income Tax Act - Section 45 - Subsection 45(1) - Paragraph 45(1)(a) FMV is measured at the time of change of use
21 November 2011 External T.I. 2011-0426481E5 F - Actions admissibles de petite entreprise Income Tax Act - 101-110 - Section 110.6 - Subsection 110.6(14) - Paragraph 110.6(14)(f) - Subparagraph 110.6(14)(f)(ii) - Clause 110.6(14)(f)(ii)(A) “substantially all” (meaning 90% or more) test satisfied even though only leasehold interest in real estate transferred
9 December 2011 Internal T.I. 2011-0399641I7 F - Bien agricole admissible et un lotissement Income Tax Act - 101-110 - Section 110.6 - Subsection 110.6(1.3) - Paragraph 110.6(1.3)(c) - Subparagraph 110.6(1.3)(c)(ii) 5-year “used principally” test was satisfied where a single lot was used 60% in farming
Income Tax Act - Section 45 - Subsection 45(1) - Paragraph 45(1)(a) subdivision does not by itself convert capital property to inventory
17 November 2011 External T.I. 2011-0414811E5 F - Frais médicaux- fins esthétiques Income Tax Act - Section 118.2 - Subsection 118.2(2.1) qualifying breast surgery expenses
8 December 2011 External T.I. 2011-0427451E5 F - Statut de résidence fiscale Income Tax Act - Section 2 - Subsection 2(1) Rulings Directorate does not determine residency
15 November 2011 External T.I. 2011-0415881E5 F - Pension alimentaire pour enfants Treaties - Income Tax Conventions - Article 18 taxpayer not entitled to deduct child support payments upon becoming a non-resident
2011-12-09 16 November 2011 External T.I. 2011-0423861E5 F - paragraph 53(1)b) Income Tax Act - Section 53 - Subsection 53(1) - Paragraph 53(1)(b) example of application of s. 53(1)(b) on dirty s. 85 exchange of common shares with partial SIOH for high PUC/ACB prefs and low PUC/ACB common shares
Income Tax Act - Section 89 - Subsection 89(1) - Capital Dividend Account - Paragraph (a) - Subparagraph (a)(i) - Clause (a)(i)A) example of capital gain for CDA purposes being less than the s. 40 capital gain
22 November 2011 External T.I. 2011-0404021E5 F - Revenu des entrepreneurs Income Tax Act - Section 9 - Timing renovation, and sewage system work, does not qualify as "construction" eligible for completion method
24 November 2011 External T.I. 2011-0424631E5 F - Subsection 256(2) Income Tax Act - Section 181.1 - Subsection 181.1(4) s. 256(2) election causes Aco and Bco not be associated with Cco for s. 125(5.1), but not ss. 181.1(2) and (4), purposes
Income Tax Act - Section 256 - Subsection 256(2) - Paragraph 256(2)(b) - Subparagraph 256(2)(b)(ii) s. 256(2)(b)(ii) election inapplicable for ss. 181.1(2) and (4) purposes

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