Translations of recent severed letters

Bundle Date Translated severed letter Summaries under Summary descriptor
2017-06-21 10 May 2017 External T.I. 2017-0687051E5 F - Addition to ACB of a partnership interest Income Tax Act - Section 53 - Subsection 53(1) - Paragraph 53(1)(e) - Subparagraph 53(1)(e)(i) no s. 53(1)(e) addition for s. 34.2(2) stub period income inclusion
Income Tax Act - Section 34.2 - Subsection 34.2(2) no partnership-interest ACB addition for inclusion
11 May 2017 External T.I. 2016-0679751E5 F - TFSA - Exempt Contribution Income Tax Act - Section 207.01 - Subsection 207.01(1) - Exempt Contribution - Paragraph (b) a “survivor payment” can be made out of the deceased’s TFSA even where this occurs in the executor’s discretion
Income Tax Act - Section 248 - Subsection 248(8) - Paragraph 248(8)(a) legacy made by executor exercising discretion conferred under will occurred because of death
12 May 2017 External T.I. 2016-0649841E5 F - Dividend Refund to Private Corporation Income Tax Act - Section 129 - Subsection 129(1) - Paragraph 129(1)(a) CRA automatically pays available dividend refunds even when not claimed (or wanted)
2017-06-07 21 November 2016 Internal T.I. 2016-0641961I7 F - DSU Plan Income Tax Regulations - Regulation 6801 - Paragraph 6801(d) - Subparagraph 6801(1)(d)(i) potential change-of-control redemption trigger (and Code s. 409A triggers) were offside
Income Tax Act - Section 6 - Subsection 6(11) recognition in income of full value of deferred units issued under offside plan
15 May 2017 External T.I. 2015-0580461E5 F - Life insurance policy held in an RCA trust Income Tax Act - Section 207.5 - Subsection 207.5(3) s. 207.7(2) refund might be generated where an RCA trust distributes a life insurance policy to its employee beneficiary
Income Tax Act - Section 207.5 - Subsection 207.5(1) - RCA Strip holding of life insurance policy could entail RCA strip
2017-05-31 30 March 2017 External T.I. 2015-0609951E5 F - Article 18 of the Canada-Turkey Income Tax Convention Treaties - Income Tax Conventions - Article 18 capital portion of s. 56(1)(d) is not excluded as an annuity under Canada-Turkey Treaty/RRSP annuity payments are pensions
Other Legislation/Constitution - Federal - Income Tax Conventions Interpretation Act - Section 5 - Pension RRSP annuity payments to Turkish resident were subject to Pt XIII tax as pension payments
Income Tax Act - Section 56 - Subsection 56(1) - Paragraph 56(1)(d) capital components are not deduction of cost
2017-05-24 2 May 2017 External T.I. 2016-0663781E5 F - Meaning of retained earnings/calculation of capital Income Tax Act - Section 181 - Subsection 181(3) - Paragraph 181(3)(b) - Subparagraph 181(3)(b)(i) GAAP meant ASPE if ASPE followed by the corporation
Income Tax Act - Section 181.2 - Subsection 181.2(3) - Paragraph 181.2(3)(a) appraisal increment in acordance with ASPE increased a corporation’s retained earnings
20 April 2017 External T.I. 2016-0672501E5 F - Usufruct and Use of capital of a trust by a spouse Income Tax Act - Section 70 - Subsection 70(6) - Paragraph 70(6)(b) - Subparagraph 70(6)(b)(ii) right of the bare owner of property, subject to a usufruct in favour of a surviving spouse, to dispose of his bare ownership does not preclude a spousal trust
Income Tax Act - Section 248 - Subsection 248(3) - Paragraph 248(3)(a) deemed spousal trust created through will
19 April 2017 External T.I. 2016-0625841E5 F - Gift of equitable interest in a trust Income Tax Act - Section 118.1 - Subsection 118.1(5.1) s. 118.1(5.1) does not apply where a GRE donates a capital interest in a charitable residual trust created by will
Income Tax Act - Section 118.1 - Subsection 118.1(1) - Total Charitable Gifts - Paragraph (c) - Subparagraph (c)(ii) - Clause (c)(ii)(B) (c)(ii)(A) rather than (c)(ii)(B) applies where a GRE charitably donates a capital interest in a charitable residual trust created by will
2017-04-26 14 March 2017 External T.I. 2016-0656101E5 F - Death Benefit Income Tax Act - Section 248 - Subsection 248(1) - Death Benefit sole shareholder who did not receive salary every year could receive a death benefit/staggered payment
2017-04-19 14 March 2017 External T.I. 2016-0627311E5 F - Deduction of contribution to an IPP or RCA Income Tax Act - Section 248 - Subsection 248(1) - Salary Deferral Arrangements a mooted RCA providing supplementary pension benefits must be similar to the IPP which it supplements
Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(q) non-deductibility if supplementary benefits do not merely proportionately top-up IPP benefits
13 March 2017 External T.I. 2016-0626641E5 F - Election - Subsection 1101(5b.1) Reg. Income Tax Regulations - Regulation 1101 - Subsection 1101(5b.1) only one Reg. 1101(5b.1) election is required where work on an addition to a non-residential building extends over more than one year
Income Tax Regulations - Regulation 1102 - Subsection 1102(23) further work on an addition does not fall into a separate class
2017-04-12 3 February 2017 External T.I. 2015-0589821E5 F - Change of Use of duplex Income Tax Act - Section 45 - Subsection 45(1) - Paragraph 45(1)(c) substantially renovating the personal-use portion of a rental property (without changing floor areas) generally would not engage the change-of-use rules
24 March 2017 External T.I. 2016-0662381E5 F - Control - unanimous shareholders agreement Income Tax Act - Section 251 - Subsection 251(5) - Paragraph 251(5)(b) - Subparagraph 251(5)(b)(i) highly contingent secondary call right of a non-resident on shares of minority residents undercuts for CCPC purposes their USA right to appoint half the board
Income Tax Act - Section 251 - Subsection 251(5) - Paragraph 251(5)(b) - Subparagraph 251(5)(b)(ii) no application if non-resident under USA cannot control board decision to redeem residents’ shares – applies if automatic redemption requirement
Income Tax Act - Section 125 - Subsection 125(7) - Canadian-Controlled Private Corporation non-resident would control notwithstanding USA board appointment right of residents due to its secondary call right on their shares or right to require corp to honour automatic redemption clause
2017-03-29 20 February 2017 External T.I. 2014-0534341E5 F - Partnership change of fiscal period Income Tax Act - Section 249.1 - Subsection 249.1(4) a partnership of individuals can change with CRA’s permission to a different non-calendar year end
Income Tax Act - Section 249.1 - Subsection 249.1(7) requirement for serious commercial reason for change in non-calendar year end
2017-03-15 2 February 2017 Quebec CPA Individual Taxation Roundtable Q. 1.1, 2016-0674221C6 F - General deduction from tax - 123.4 Income Tax Act - Section 123.4 - Subsection 123.4(1) - Full Rate Taxable Income income on which the SBD was not claimed nonetheless is not eligible for the general rate deduction
2 February 2017 Quebec CPA Individual Taxation Roundtable Q. 1.2, 2017-0682711C6 F - Dedicated Telephone Service for Income Tax Service Income Tax Act - Section 152 - Subsection 152(1) telephone service for those with complex technical tax issues will initially be limited to Ontario and Quebec CPAs
2 February 2017 Quebec CPA Individual Taxation Roundtable Q. 1.3, 2016-0674821C6 F - Individuals separated living under the same roof Income Tax Act - Section 122.6 - Cohabiting Spouse or Common-Law Partner couple under the same roof can be living separate and apart
Income Tax Act - Section 248 - Subsection 248(1) - Common-Law Partner meaning of living "separate and apart"
2 February 2017 Quebec CPA Individual Taxation Roundtable Q. 1.4, 2016-0674831C6 F - Changement d'usage - duplex Income Tax Act - Section 45 - Subsection 45(1) - Paragraph 45(1)(c) substantially renovating the personal-use portion of a rental property (without changing floor areas) generally would not engage the change-of-use rules
Income Tax Act - Section 4 - Subsection 4(1) - Paragraph 4(1)(a) apportionment of operating expenses of duplex used both personally and for rental income
Income Tax Act - Section 248 - Subsection 248(1) - Property duplex is single property
2 February 2017 Quebec CPA Individual Taxation Roundtable Q. 1.5, 2016-0674801C6 F - Allocation et frais d'une automobile Income Tax Act - Section 6 - Subsection 6(1) - Paragraph 6(1)(b) - Subparagraph 6(1)(b)(vii.1) general reasonability of a car allowance rate of $0.54/$0.48 per kilometre including for electric vehicles
Income Tax Act - Section 6 - Subsection 6(1) - Paragraph 6(1)(k) - Subparagraph 6(1)(k)(v) electric vehicles treated the same
2 February 2017 Quebec CPA Individual Taxation Roundtable Q. 1.6, 2016-0674861C6 F - Wholly dependent person tax credit Income Tax Act - Section 118 - Subsection 118(1) - Paragraph 118(1)(b) - Subparagraph 118(1)(b)(ii) meaning of support/legal custody not required/ITA is silent on number of days child must spend with parent
2 February 2017 Quebec CPA Individual Taxation Roundtable Q. 1.7, 2016-0674811C6 F - Allocations automobiles & dépenses afférentes Income Tax Act - Section 8 - Subsection 8(1) - Paragraph 8(1)(h.1) if vehicle allowance is too low, employee can include the allowance and deduct the vehicle expenses/T2200 production expected

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