Translations of recent severed letters

Bundle Date Translated severed letter Summaries under Summary descriptor
2011-12-16 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 - 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 - 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
2011-12-02 21 November 2011 External T.I. 2011-0416881E5 F - Late-filed designation - paragraph 88(1)(d) Income Tax Act - Section 88 - Subsection 88(1) - Paragraph 88(1)(d) provided year of property disposition not-statute-barred, CRA generally will accept a late designation allocating s.88(1)(d) excess pro rata amongst the eligible properties
31 October 2011 External T.I. 2011-0422981E5 F - Whether property is eligible for a bump Income Tax Act - Section 88 - Subsection 88(1) - Paragraph 88(1)(c) - Subparagraph 88(1)(c)(v) properties not bumpable as the subsidiary control was deemed by s. 88(1)(d.2) to be acquired at the same time as it acquired the properties
Income Tax Act - Section 88 - Subsection 88(1) - Paragraph 88(1)(c) - Subparagraph 88(1)(c)(vi) bump unavailable given previous non-arm's length acquisition
Income Tax Act - Section 88 - Subsection 88(1) - Paragraph 88(1)(d.2) properties not bumpable as not owned at subsidiary's formation by related person
24 November 2011 External T.I. 2011-0416791E5 F - Shareholder Benefit Income Tax Act - Section 15 - Subsection 15(1) payment by Opco of whole life insurance premiums on policy of which it is beneficiary, but sole shareholder is holder, generates s. 15 benefit – but not policy loan advance
22 November 2011 External T.I. 2011-0420451E5 F - Canadian resource property Income Tax Act - Section 66.2 - Subsection 66.2(5) - Canadian development expense - Paragraph (e) farm-in policy inapplicable where an option that might not be exercised: CDE addition as cash and exploration expenditures made
2011-11-25 7 October 2011 Roundtable, 2011-0411911C6 F - Exploitation entreprise par SP Income Tax Act - Section 96 Quebec partnership need not carry on business
Income Tax Regulations - Regulation 2601 - Subsection 2601(1) property income of partnership is taxable only to partner (as to its share) in its province of residence
7 October 2011 Roundtable, 2011-0411831C6 F - Définition du mot mois Income Tax Act - Section 110.6 - Subsection 110.6(1) - Qualified Small Business Corporation Share - Paragraph (b) individual required to have held shares for 24 months plus one day to and including day of the determination time
Statutory Interpretation - Interpretation Act - Section 35 24-month period preceding time on Date X interpreted as extending back 24 months from the day before Date X
7 November 2011 Internal T.I. 2011-0424641I7 F - Right to cut Christmas trees Income Tax Act - Section 13 - Subsection 13(21) - Timber Resource Property right to cut Christmas trees was not a timber resource property
Income Tax Regulations - Regulation 1100 - Subsection 1100(1) - Paragraph 1100(1)(e) Christmas trees are not “timber”
Income Tax Regulations - Schedules - Schedule II - Class 14 right to cut Christmas trees with 10-year term was a Class 14 property
7 October 2011 Roundtable, 2011-0412091C6 F - Late Filed Paragraph 55(5)(f) Designation Income Tax Act - Section 55 - Subsection 55(5) - Paragraph 55(5)(f) CRA practice to only treat excess of taxable dividend over safe income as subject to s. 55(2)
7 October 2011 Roundtable, 2011-0411891C6 F - Dépenses- EPSP - négociant en vente Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(p) - Subparagraph 18(1)(p)(iii) s. 18(1)(p)(iii) deduction limited to commission income
Income Tax Act - Section 8 - Subsection 8(13) home office of a PSP corporation’s employee could qualify
7 October 2011 Roundtable, 2011-0411871C6 F - Employé constitué en société Income Tax Act - Section 125 - Subsection 125(7) - Personal Services Business PSB can have two spouses as incorporated employees
7 October 2011 Roundtable, 2011-0411841C6 F - Succession Income Tax Act - Section 104 - Subsection 104(1) estate could cease when assets converted to cash and liabilities settled
2011-11-18 4 November 2011 Internal T.I. 2011-0413341I7 F - Bien agricole admissible Income Tax Act - Section 248 - Subsection 248(1) - Farming nursery qualifies as farming if focused on growing rather than selling
Income Tax Act - Section 110.6 - Subsection 110.6(1) - Share of the Capital Stock of a Family Farm or Fishing Corporation - Paragraph (a) - Subparagraph (a)(i) meaning of “actively engaged on a regular and continuous basis” requirement
Income Tax Act - Section 110.6 - Subsection 110.6(1.3) - Paragraph 110.6(1.3)(c) s. 110.6(19) election effected a post-1987 acquisition
Income Tax Act - Section 70 - Subsection 70(10) - Child extended meaning of "child"
Income Tax Act - Section 73 - Subsection 73(3) - Paragraph 73(3)(c) rollover unavailable where taxpayer rented out the land to a farmer
8 November 2011 Internal T.I. 2011-0416651I7 F - Crédit d'impôt pour frais médicaux Income Tax Act - Section 118.2 - Subsection 118.2(2) - Paragraph 118.2(2)(a) interest expense on loan to finance surgery cannot qualify
2011-11-11 27 October 2011 Internal T.I. 2010-0382161I7 F - CPN-144 - remises et ristournes Income Tax Act - Section 9 - Computation of Profit purchase price rebates earned after purchase are income rather than inventory cost reduction
Income Tax Act - Section 10 - Subsection 10(1) change in methodology for determining cost does not require CRA approval
2 November 2011 External T.I. 2011-0413641E5 F - CIEE Income Tax Act - Section 122.3 - Subsection 122.3(1) - Paragraph 122.3(1)(b) qualifying activities determined by reference to the employer’s business rather than employee’s activities
2011-11-04 7 October 2011 Roundtable, 2011-0411951C6 F - Retenues à la source - options d'achat d'actions Income Tax Regulations - Regulation 6204 - Subsection 6204(1) - Paragraph 6204(1)(a) conferral on employer of share repurchase right to set off against source deduction obligation engages the exclusion

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