Translations of recent severed letters

Bundle Date Translated severed letter Summaries under Summary descriptor
2022-06-15 7 October 2021 APFF Financial Strategies and Instruments Roundtable Q. 10, 2021-0896101C6 F - Death of seg. fund policyholder - income allocatio Income Tax Act - Section 138.1 - Subsection 138.1(1) - Paragraph 138.1(1)(f) accrued income under a segregated fund is not deemed by s. 138.1(1)(f) to be a right or thing
Income Tax Act - 101-110 - Section 104 - Subsection 104(24) deeming of an amount to be payable for s. 104(24) purposes does not create a legal entitlement to it
7 October 2021 APFF Financial Strategies and Instruments Roundtable Q. 11, 2021-0896021C6 - APFF Q.11 - T1135 and situs of cryptocurrencies Income Tax Act - Section 233.3 - Subsection 233.3(1) - Specified Foreign Property - Paragraph (a) CRA is currently reviewing whether and when cryptocurrencies may not be foreign property
2022-06-08 7 October 2021 APFF Roundtable Q. 1, 2021-0900891C6 F - Tax treatment of employee share trust Income Tax Act - Section 7 - Subsection 7(2) s. 7(2) does not deem there to be an agreement to acquire shares
Income Tax Act - Section 248 - Subsection 248(1) - Employee Benefit Plan the EBP rather than s. 7 rules applied to a share plan for employees where share distributions were discretionary
7 October 2021 APFF Roundtable Q. 2, 2021-0900901C6 F - TOSI and scenarios to recuperate the AMT Income Tax Act - Section 120.4 - Subsection 120.4(1) - Split Income - Paragraph (g) - Subparagraph (g)(ii) only amount in excess of reasonable return is not an excluded amount
Income Tax Act - Section 120.4 - Subsection 120.4(1) - Split Income - Paragraph (d) TOSI rules inapplicable to loans to an individual
Income Tax Act - Section 120.4 - Subsection 120.4(1) - Split Income TOSI inapplicable to payment of excessive salary by one spouse’s company to the other spouse
7 October 2021 APFF Roundtable Q. 3, 2021-0900911C6 F - Entreprise exploitée par une fiducie Income Tax Act - Section 216 - Subsection 216(1) delegation of performance of landlord’s servicing responsibilities does not affect whether its rents are from a business or property
7 October 2021 APFF Roundtable Q. 4, 2021-0900921C6 F - Mind and management et statut de SPCC Income Tax Act - Section 123.3 use of foreign corporation with central management and control in Canada to avoid s. 123.3 tax could be GAARable
Income Tax Act - Section 245 - Subsection 245(4) using a foreign corporation with Canadian CMC to produce a lower tax rate on investment income could be GAARable
7 October 2021 APFF Roundtable Q. 5, 2021-0900951C6 F - Safe income and Part IV tax Income Tax Act - Section 55 - Subsection 55(2) Pt. IV and safe income exclusions under s. 55(2) can be doubled up
Income Tax Act - Section 55 - Subsection 55(2.1) - Paragraph 55(2.1)(c) full use can be made of safe income even though there is an immediately subsequent use of Pt. IV tax exclusion
7 October 2021 APFF Roundtable Q. 6, 2021-0900961C6 - APFF Q.6 - Minimum Tax Carryover and TOSI Income Tax Act - Section 120.2 - Subsection 120.2(3) - Paragraph 120.2(3)(b) CRA will not retroactively adjust returns that relied on a form error permitting TOSI to increase additional tax carryforwards
General Concepts - Transitional Provisions and Policies CRA will honour incorrect AMT carryforward balances that arose due to an error in the CRA form
7 October 2021 APFF Roundtable Q. 7, 2021-0900971C6 F - Economic dependence Income Tax Act - Section 251 - Subsection 251(1) - Paragraph 251(1)(c) financial dependence as described in the jurisprudence is indicative but not dispositive of a non-arm’s length relationship
7 October 2021 APFF Roundtable Q. 8, 2021-0900981C6 F - Cost Recovery Method in IT-426R (Archived) Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(g) a limited partnership cannot use a cost recovery earnout
7 October 2021 APFF Roundtable Q. 9, 2021-0901101C6 F - Part IV tax exception vs eligible and non-eligible Income Tax Act - Section 55 - Subsection 55(2) payment of non-eligible dividend by an Opco with both NERDTOH and ERDTOH to Holdco avoids s. 55(2) if the resulting s. 186(1)(b) tax is not refunded as part of the same series
7 October 2021 APFF Roundtable Q. 10, 2021-0901001C6 - Application of subsection 184(3) and 185.1(3) Income Tax Act - Section 184 - Subsection 184(3) CRA generally will accept the concurrence by a share vendor to an s. 184(3) election in advance of the excessive eligible dividend being identified
Income Tax Act - Section 185.1 - Subsection 185.1(3) concurrence can be given to the election in a share sale agreement before the excessive eligible dividend designation is identified
7 October 2021 APFF Roundtable Q. 11, 2021-0901011C6 F - Application of subsection 98(3) Income Tax Act - Section 98 - Subsection 98(5) a post-wind up drop down transaction would preclude the application of s. 98(5)
Income Tax Act - Section 98 - Subsection 98(3) s. 98(3) could apply to wind-up of partnership with substantial goodwill
7 October 2021 APFF Roundtable Q. 14, 2021-0901041C6 F - Meaning of Any consideration received by Donee Income Tax Act - Section 118.1 - Subsection 118.1(13) - Paragraph 118.1(13)(c) “consideration … received” in s. 118.1(13)(c) includes a s. 84(3) deemed dividend
7 October 2021 APFF Roundtable Q. 15, 2021-0901051C6 F - Exemption pour résidence principale Income Tax Act - Section 40 - Subsection 40(2) - Paragraph 40(2)(g) the s. 40(2)(g) formula can be prejudicial where there is delayed home construction on vacant land
7 October 2021 APFF Roundtable Q. 16, 2021-0901061C6 F - 2021 APFF Q.16 - Disclosure of a counter letter Income Tax Act - Section 116 - Subsection 116(3) CRA may be willing to issue a letter confirming that no s. 116 certificate is required because the true vendor is a resident
Income Tax Act - Section 152 - Subsection 152(4) - Paragraph 152(4)(a) - Subparagraph 152(4)(a)(i) failure to disclose a counter agreement is neglect or carelessness
7 October 2021 APFF Roundtable Q. 17, 2021-0901071C6 - Application of section 120.4 Income Tax Act - Section 120.4 - Subsection 120.4(1) - Arm's Length Capital - Paragraph (c) a capital dividend from a related business was not a source of arm’s length capital
Income Tax Act - Section 120.4 - Subsection 120.4(1) - Excluded Amount - Paragraph (e) - Subparagraph (e)(i) exclusion where business from which the dividend was derived had ceased in a prior year
7 October 2021 APFF Roundtable Q. 18, 2021-0901091C6 - TOSI continuity rule for inherited property Income Tax Act - Section 120.4 - Subsection 120.4(1.1) - Paragraph 120.4(1.1)(b) - Subparagraph 120.4(1.1)(b)(ii) a dividend on shares that were distributed by an inter vivos trust, as directed in a will 15 years previously, can be excluded by s. 120.4(1.1)(b)(ii)
Income Tax Act - Section 120.4 - Subsection 120.4(1) - Excluded Amount - Paragraph (e) - Subparagraph (e)(ii) s. 120.4(1.1)(b)(ii) can apply to shares distributed by inter vivos trust but as directed in will, so that (e)(ii) exclusion can apply
7 October 2021 APFF Roundtable Q. 19, 2021-0901121C6 F - APFF – ITR Remissions General Concepts - Audit, Filing and Assessment Procedure rate increase for rulings work
7 October 2021 APFF Roundtable Q. 20, 2021-0910491C6 F - ITRD internal evaluation process
2022-05-11 2021 Ruling 2020-0865901R3 F - Post-mortem Hybrid Pipeline Income Tax Act - Section 84 - Subsection 84(2) pipeline involving a deferred distribution of portfolio assets from the corporation held on death
2022-04-20 16 July 2020 Internal T.I. 2019-0817271I7 F - Indemnités reçues à la suite de la négociation Income Tax Act - Section 54 - Proceeds of Disposition - Paragraph (e) compensation for loss of value to lands left after the government agreed to purchase a portion thereof, would constitute proceeds of disposition of such remainder
Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(x) compensation paid to land owners for their restoration of the portion of their lands not sold to the government would be a s. 12(1)(x) receipt
Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(f) compensation for damages to depreciable property would be included under s. 12(1)(f) rather than under proceeds of disposition, but the related repaid expenses would be deductible
2020 Ruling 2020-0848081R3 F - Subsection 104(4) and pipeline transaction Income Tax Act - Section 84 - Subsection 84(2) pipeline transaction implemented after a discretionary inter vivos trust voluntarily realizes capital gains on its 21st anniversary
2022-04-06 2017 Ruling 2017-0696791R3 F - Reduction of PUC/capital Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(c) - Subparagraph 20(1)(c)(i) interest on money borrowed by Subco for distribution of share-capital account to its parent is deductible if the Subco property continues generating business income
Income Tax Act - Section 51 - Subsection 51(1) s. 51(1) will apply where convertible note, that was issued as boot, will be converted to shares
2019 Ruling 2017-0696792R3 F - Internal reorganization

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