Translations of recent severed letters

Bundle Date Translated severed letter Summaries under Summary descriptor
2007-08-10 23 July 2007 Internal T.I. 2007-0234691I7 F - Foreign Exchange Gains/Losses and CDA Income Tax Act - Section 39 - Subsection 39(2) FX losses sustained on the maturity of commercial paper deemed under s. 39(2) to be realized at year end, so that CDA deduction deferred until then
Income Tax Act - Section 89 - Subsection 89(1) - Capital Dividend Account - Paragraph (a) - Subparagraph (a)(ii) s. 39(2) capital losses not deducted until year end
29 June 2007 Internal T.I. 2007-0229431I7 F - Excessive Capital Dividend Income Tax Act - Section 184 - Subsection 184(3) - Paragraph 184(3)(d) proration approach applied where dividend not fully paid
2007-07-20 10 July 2007 External T.I. 2006-0177881E5 F - Allégement transitoire Income Tax Act - Section 112 - Subsection 112(3) transitional relief not lost on s. 85(1) exchange
11 July 2007 External T.I. 2006-0192101E5 F - Disposition d'actions par un non-résident Income Tax Act - Section 212.1 - Subsection 212.1(1) relief under the 1998 federal budget was not implemented – deemed dividend where NR individual effects pipeline transaction
11 July 2007 External T.I. 2006-0206391E5 F - Choix du paragraphe 70(6.2) - société de personnes Income Tax Act - Section 70 - Subsection 70(6.2) s. 70(6.2) election not available for part of a partnership interest, whereas it is made for particular shares
Income Tax Act - Section 248 - Subsection 248(1) - Property each share, unlike a partnership unit, is a distinct property
12 July 2007 Internal T.I. 2007-0240681I7 F - Indiens - Cotisations à un RPA Income Tax Act - Section 147.2 - Subsection 147.2(4) - Paragraph 147.2(4)(a) s. 8(1)(m) deduction prorated based on percentage of work performed on the reserve
2007-07-13 9 July 2007 External T.I. 2006-0200791E5 F - Actions sous entiercement Income Tax Act - Section 248 - Subsection 248(1) - Small Business Corporation shares of public-company franchisor could be used in the franchisee’s business if required to be held by it
4 July 2007 Internal T.I. 2007-0237631I7 F - Frais de repas - Secteur du taxi Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(h) ss. 18(1)(h) and (a) less restrictive than s. 8(4) but does not permit deduction of self-employed tax driver’s lunch expenses
4 July 2007 Internal T.I. 2007-0238391I7 F - Crédit pour stage en milieu de travail Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(x) Quebec job tax credit included under s. 12(1)(x) if not a wage expense reduction
Income Tax Act - Section 12 - Subsection 12(2.1) inclusion under s. 12(2.1) where Quebec job credit received by partnership members
2007-07-06 30 May 2007 External T.I. 2006-0183851E5 F - Paragraphs 83(2) and 84.1(1) Income Tax Act - Section 83 - Subsection 83(2) s. 83(2) election can be made on a s. 84.1 deemed dividend
Income Tax Act - Section 84.1 - Subsection 84.1(1) - Paragraph 84.1(1)(b) s. 84.1(1) dividend is payable per s. 84(7) so that s. 83(2) election available
29 May 2007 Internal T.I. 2007-0223381I7 F - Capital Dividend Account Income Tax Act - Section 87 - Subsection 87(2) - Paragraph 87(2)(z.1) s. 87(2)(z.1) causes subsidiary CDA balances to flow through to the parent
14 June 2007 Internal T.I. 2007-0229311I7 F - Capital Dividend Account Income Tax Act - Section 89 - Subsection 89(1) - Capital Dividend Account - Paragraph (b) recording of dividend payable and dividend receivable between sub and parent was insufficient to constitute the payment of a capital dividend, so that there was no CDA addition
General Concepts - Payment & Receipt making accounting entries does not constitute payment of a dividend
Income Tax Act - Section 184 - Subsection 184(3) invalid payment of capital dividend (because no payment) was subject to Pt. III tax (given valid s. 83(2) election) for which no s. 184(3) election could be made as no payment
General Concepts - Effective Date a declared dividend cannot be revoked
3 July 2007 External T.I. 2007-0236551E5 F - Crédit d'impôt pour études Income Tax Act - Section 118.6 - Subsection 118.6(1) - Qualifying Student post-doctoral fellow is not a student
2007-06-29 21 June 2007 External T.I. 2005-0157861E5 F - Cotisation professionnelle Income Tax Act - Section 8 - Subsection 8(1) - Paragraph 8(1)(i) - Subparagraph 8(1)(i)(i) membership in a municipal employees’ association was not necessary for the maintenance of a professional status
13 June 2007 External T.I. 2007-0226261E5 F - Convention Émirats Arabes Unis Treaties - Income Tax Conventions - Article 4 meaning of “substantially all” in UAE Convention informed by its meaning under ITA
Treaties - Income Tax Conventions - Article 3 undefined term in Convention informed by its domestic interpretation by CRA
Income Tax Regulations - Regulation 5907 - Subsection 5907(11.2) - Paragraph 5907(11.2)(a) FA required to have its central management and control in the Treaty country in addition to satisfying the Treaty residence test
18 June 2007 Internal T.I. 2007-0231861I7 F - Principale place d'affaires Income Tax Act - Section 8 - Subsection 8(13) - Paragraph 8(13)(a) - Subparagraph 8(13)(a)(i) “principally performed” test references the proportion of time spent at the home office
21 June 2007 Internal T.I. 2007-0239681I7 F - perte sur prêts irrécouvrables Income Tax Act - Section 40 - Subsection 40(2) - Paragraph 40(2)(g) - Subparagraph 40(2)(g)(ii) acquisition of shares through an RRSP can establish an income-producing purpose re a non-interest loan made directly to the corp
2007-06-22 13 June 2007 External T.I. 2006-0178031E5 F - Biens détenus par des fiducies testamentaires Income Tax Act - Section 104 - Subsection 104(2) property settled on a spousal trust that, on the spouse/s death, passes to testamentary trusts for the testator’s children, originates from him for s. 104(2)(a) purposes
14 June 2007 External T.I. 2006-0198341E5 F - L'EXPRESSION "VIT DANS UNE RELATION CONJUGALE" Income Tax Act - Section 248 - Subsection 248(1) - Common-Law Partner meaning of "cohabits… in a conjugal relationship
14 June 2007 External T.I. 2006-0209341E5 F - Utilisation d'un bien d'une société de personnes Income Tax Act - Section 103 - Subsection 103(1) personal use of property is a factor going to the reasonableness of the profit-sharing arrangements
Income Tax Act - Section 96 - Subsection 96(2.2) - Paragraph 96(2.2)(d) personal use of property could engage s. 96(2.2)(d)
Income Tax Act - Section 246 - Subsection 246(1) conferral-of-benefit provisions do not apply to a partner’s personal use of partnership property other than car
Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(a) - Income-Producing Purpose partner’s use of partnership property is addressed by denying partnership income deductions and under s. 103, rather than through benefit-conferral provisions
2007-06-15 5 June 2007 External T.I. 2006-0174521E5 F - Avantages imposables - Ordinateur et Internet Income Tax Act - Section 6 - Subsection 6(1) - Paragraph 6(1)(a) 85% personal use of employer-funded home computer does not generate taxable benefit if computer is essential to performance of employment duties
29 May 2007 Internal T.I. 2006-0217401I7 F - 110(1)d): Moment de la conclusion de la convention Income Tax Act - Section 110 - Subsection 110(1) - Paragraph 110(1)(d) - Subparagraph 110(1)(d)(ii) - Clause 110(1)(d)(ii)(A) where options previously granted were not exercisable until an employer “Exercise Notice,” the stock option agreement was made at such notice time
Income Tax Act - Section 7 - Subsection 7(5) not giving exercise notice to employees who are not shareholders (so that they cannot exercise their options) may engage s. 7(5)
7 June 2007 External T.I. 2007-0228831E5 F - Pénalité au rachat d'une obligation Income Tax Act - Section 40 - Subsection 40(1) - Paragraph 40(1)(a) - Subparagraph 40(1)(a)(i) bond redemption premium entered into computation of capital gain or loss of bondholder notwithstanding withholding of premium from accrued interest
2007-06-08 9 May 2007 External T.I. 2006-0189931E5 F - Renonciation à une fiducie par un conjoint Income Tax Act - Section 69 - Subsection 69(1) - Paragraph 69(1)(b) renunciation of interest in spousal trust not a disposition to the family beneficiaries
Income Tax Act - Section 248 - Subsection 248(1) - Disposition extinguishment of trust interests on their renunciation is a disposition of the renounced interest, but resulting variation of trust to accelerate distribution entitlements is not
Income Tax Act - Section 104 - Subsection 104(4) - Paragraph 104(4)(a) variation of spousal trust, following renunciation by spouse, to accelerate distribution entitlement of residuary beneficiaries would not engage s. 104(4) until distribution
Income Tax Act - Section 70 - Subsection 70(6) variation of spousal trust, following renunciation by spouse, to accelerate distribution entitlement of residuary beneficiaries would not deny s. 70(6) rollover

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