Translations of recent severed letters

Bundle Date Translated severed letter Summaries under Summary descriptor
2009-09-25 8 September 2009 External T.I. 2008-0299771E5 F - Gain on Disposition of Debt Income Tax Act - Section 9 - Computation of Profit partial repayment of low-cost debt generates business income if held on income account
17 September 2009 External T.I. 2009-0310251E5 F - Interaction between sections 89 and 55 Income Tax Act - Section 89 - Subsection 89(1) - Capital Dividend Account - Paragraph (a) addition to CDA from redemption engaging s. 55(2) occurs at redemption time
28 August 2009 External T.I. 2009-0325881E5 F - Application of Subsection 89(8) Income Tax Act - Section 89 - Subsection 89(8) no deduction under element C for loss of target incurred in the year after the change of control
2009-09-04 20 August 2009 Internal T.I. 2009-0326941I7 F - Intérêts, Taxe sur le capital, déductibilité Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(a) - Income-Producing Purpose provincial capital tax and interest thereon generally is deductible/income taxes are not
2009-08-28 20 August 2009 External T.I. 2008-0294531E5 F - Placement admissible REÉR - Parts privilégiées RIC Income Tax Act - Section 146 - Subsection 146(5) premium can be paid in kind with contribution of shares, if validly issued
2009-08-14 21 July 2009 Internal T.I. 2009-0322591I7 F - Déduction des intérêts Income Tax Act - Section 248 - Subsection 248(1) - Disposition replacement of note and capitalized interest by new note with increased amount did not constitute payment by novation of the old debt
General Concepts - Payment & Receipt replacement of note with capitalized note with note for full amount did not constitute payment by novation
Income Tax Act - Section 212 - Subsection 212(1) - Paragraph 212(1)(b) issuance of replacement promissory note for amount of previous principal plus capitalized interest was not a crediting of such interest
2009-08-07 29 June 2009 External T.I. 2008-0296371E5 F - Capital dividends Income Tax Act - Section 129 - Subsection 129(1.2) s. 87(2)(aa) would apply to eliminate RDTOH of predecessor given the absence of an s. 83(2.4) equivalent to exempt the predecessor’s notional dividend
Income Tax Act - Section 83 - Subsection 83(2.1) s. 83(2.1) would apply to acquisition and amalgamation with shell corp. with CDA unless s. 83(2.4) exceptions applied
Income Tax Act - Section 87 - Subsection 87(2) - Paragraph 87(2)(z.1) s. 87(2)(z.1) would apply to eliminate CDA of predecessor if the s. 83(2.4) exceptions did not prevent the application of s. 83(2.1) to the notional dividend paid by that predecessor
29 July 2009 External T.I. 2008-0297011E5 F - Conversion de participations dans une SNC Income Tax Act - Section 248 - Subsection 248(1) - Disposition no disposition if new partnerships interests exchanged for old interests that in totality are not substantially distinguishable
Income Tax Act - Section 97 - Subsection 97(2) s. 97(2) rollover not available if new partnerships interests exchanged for old interests are not in totality substantially distinguishable
Income Tax Act - Section 96 - Subsection 96(1.01) s. 96(1.01) inapplicable where only income interest and not capital interest disposed of
Income Tax Act - Section 43 - Subsection 43(1) where only income interest and not capital interest in a partnership disposed of, there is part disposition of partnership interest with resulting reduced ACB for remainder interest
30 June 2009 External T.I. 2008-0304311E5 F - Période admissible - CIEE Income Tax Act - Section 122.3 - Subsection 122.3(1) meaning of “more than six consecutive months”
29 July 2009 External T.I. 2009-0314611E5 F - Résidence pour membres du clergé à la retraite Income Tax Act - Section 8 - Subsection 8(1) - Paragraph 8(1)(c) provision of manse to retired Minister is not taxable employment benefit – so that no s. 8(1)(c) deduction
2009-07-31 7 July 2009 External T.I. 2008-0267941E5 F - Pompiers volontaires Income Tax Act - Section 81 - Subsection 81(4) “volunteer” in s. 81(4) references its broader meaning under provincial standards legislation, and is initially applied by the employer municipality
Income Tax Act - Section 5 - Subsection 5(1) someone normally is a “volunteer” rather than employee if any compensation is too small to be motivating
20 July 2009 External T.I. 2009-0312541E5 F - Allocation pour usage d'un véhicule à moteur Income Tax Act - Section 6 - Subsection 6(1) - Paragraph 6(1)(b) - Subparagraph 6(1)(b)(x) car allowance bifurcated into 2 allowances: reasonable per-kilometre allowance; and unreasonable minimum allowance
Income Tax Act - Section 8 - Subsection 8(1) - Paragraph 8(1)(h.1) T2200 can be prepared where car allowance bifurcated into 2 allowances, one of which is taxable
2009-07-24 15 July 2009 External T.I. 2009-0315221E5 F - Crédit d'impôt pour la rénovation domiciliaire Income Tax Act - Section 118.04 - Subsection 118.04(1) - Qualifying Expenditure cost of replacing residential septic system for principal residence (e.g., a cottage) generally qualifies
15 July 2009 External T.I. 2009-0316451E5 F - Crédit d'impôt pour la rénovation domiciliaire Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(b) - Capital Expenditure v. Expense - Improvements v. Repairs or Running Expense cost of replacing septic tank and drainage field of an enduring nature
13 July 2009 Internal T.I. 2009-0328161I7 F - Personne entièrement à charge non-résidente Income Tax Act - Section 118 - Subsection 118(1) - Paragraph 118(1)(b) individual living outside Canada with dependant child can claim s. 118(1)(b) credit if a deemed s. 250(1) resident
2009-07-17 26 May 2009 External T.I. 2009-0318441E5 F - Bâtiment non-résidentiel admissible Income Tax Regulations - Regulation 1104 - Subsection 1104(2) - Eligible Non-Residential Building hotel but not a seniors’ residence qualifies as “non-residential”
2009-07-10 2 July 2009 External T.I. 2009-0319211E5 F - T5008 : Contrat d'opération à terme (Futures) Income Tax Regulations - Regulation 230 - Subsection 230(2) amount to be entered on T5008 as "proceeds of disposition or payments" is net gain or loss on closing out futures contract
Income Tax Act - Section 9 - Computation of Profit gain or loss on futures contract determined when closed out on establishing opposite position and not affected by maintenance margin
23 June 2009 External T.I. 2009-0322551E5 F - Commission scolaire, Organisme public Income Tax Act - Section 149.1 - Subsection 149.1(1) - Qualified Donee - Paragraph (a) - Subparagraph (a)(iii) school board performs a function of government
2009-07-03 26 June 2009 Internal T.I. 2009-0319501I7 F - Résidence reçue en héritage - PBR Income Tax Application Rules - Subsection 26(3) ACB of property inherited before December 31, 1971 to be determined as of that date
26 June 2009 External T.I. 2009-0323711E5 F - Commissions à des travailleurs indépendants Income Tax Regulations - Regulation 200 - Subsection 200(1) T4A requirement applies equally where payee is a partnership
25 June 2009 Internal T.I. 2009-0328171I7 F - Pénalité pour omission - 163(1) Income Tax Act - Section 163 - Subsection 163(1) s. 163(1) cannot apply where the previous year’s failure was in claiming bogus expenses rather than failing to report revenues
2009-06-26 11 May 2009 External T.I. 2008-0276761E5 F - Class 43.1 and 43.2 Income Tax Regulations - Schedules - Schedule II - Class 43.1 wood waste fuelled heat production system and ground source heat pump likely could qualify
Income Tax Regulations - Regulation 1104 - Subsection 1104(13) - Eligible Waste Fuel wood pellets are wood waste
12 June 2009 Internal T.I. 2008-0294921I7 F - Montant reçu à l'égard d'un surplus actuariel Income Tax Act - Section 9 - Nature of Income lump sum paid to asset vendor for actuarial surplus in transferred pension plan was s. 9 income under Ikea expense-adjustment principle
Income Tax Act - Section 248 - Subsection 248(1) - Superannuation or Pension Benefit transfer of a pension plan assets and liabilities to the asset purchaser with regulatory approval entailed a plan “modification” rendering actuarial surplus compensation taxable
27 May 2009 External T.I. 2008-0296731E5 F - Rachat d'actions: 20(1)c) Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(c) corporation must allocate contributed capital of redeemed shares proportionately to borrowed money and redemption notes, but can disproportionately allocate its accumulated profits
12 June 2009 External T.I. 2009-0316511E5 F - Charges sociales et autres retenues France Treaties - Income Tax Conventions - Article 18 list of pension plans recognized for French tax purposes re Art. XXIX(5) of French Treaty
Income Tax Act - Section 126 - Subsection 126(7) - Non-Business-Income Tax social security contributions do not qualify as income taxes – but French "contribution sociale généralisée" and "contribution pour le remboursement de la dette sociale" so qualify
2009-06-19 4 May 2009 External T.I. 2008-0299841E5 F - Garantie pour l'impôt de départ Income Tax Act - Section 220 - Subsection 220(4.5) posting of security for departure tax can generate refund of instalments paid in excess of regular tax
Income Tax Act - Section 164 - Subsection 164(7) refund of instalments paid in excess of Part I tax for year ignoring s. 128.1(4) departure tax permitted where s. 220(4.5) security posted for such departure tax

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