Translations of recent severed letters

Bundle Date Translated severed letter Summaries under Summary descriptor
2005-12-02 4 November 2005 External T.I. 2004-0108271E5 F - Frais juridiques-105(2) Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(a) - Legal and other Professional Fees legal fees costs incurred to defend the right of use of the property were capital expenditures
17 November 2005 External T.I. 2005-0118101E5 F - Disposition réputée Income Tax Act - Section 128.1 - Subsection 128.1(4) - Paragraph 128.1(4)(b) deemed disposition is not to an arm’s length person, so that no business investment loss can result
Income Tax Act - Section 39 - Subsection 39(1) - Paragraph 39(1)(c) - Subparagraph 39(1)(c)(ii) no BIL can arise from a deemed disposition and reacquisition
17 November 2005 External T.I. 2005-0118181E5 F - Signification "was applicable" vs "s'est appliqué" Income Tax Act - 101-110 - Section 107 - Subsection 107(4.1) - Paragraph 107(4.1)(b) s. 75(2) “was applicable” even where there was no income to attribute
4 November 2005 External T.I. 2005-0131741E5 F - Don par testament d'un bien culturel Income Tax Act - Section 39 - Subsection 39(1) - Paragraph 39(1)(a) - Subparagraph 39(1)(a)(i.1) s. 39(1)(a)(i.1) extended to gift by spousal trust
2005-11-18 15 November 2005 External T.I. 2005-0154801E5 F - Service Contract Payments - Filing of T1204 Income Tax Regulations - Regulation 237 - Subsection 237(2) T4A required where no T1204 filing required
2005-11-11 2 November 2005 External T.I. 2004-0093601E5 F - Fiducie au profit d'un mineur Income Tax Act - 101-110 - Section 104 - Subsection 104(18) - Paragraph 104(18)(c) can be discretion regarding distribution of capital other than accumulated income
Income Tax Act - 101-110 - Section 104 - Subsection 104(18) - Paragraph 104(18)(d) there can be discretion to delay payment, but not as to the share
1 November 2005 External T.I. 2004-0100001E5 F - Revenu d'une fiducie réputé payable Income Tax Act - 101-110 - Section 104 - Subsection 104(18) - Paragraph 104(18)(c) trust can become discretionary once all beneficiaries have attained 21
Income Tax Act - 101-110 - Section 104 - Subsection 104(24) position in ITTN No. 11 re payment of summer camp fees etc. also applies to non-discretionary trusts
27 October 2005 External T.I. 2004-0103431E5 F - Crédit d'impôt étranger-Gain en capital Income Tax Act - Section 126 - Subsection 126(1) claiming of principal residence exemption or capital loss carryforwards would generally preclude FTC for related US capital gains tax
2005-11-04 20 September 2005 External T.I. 2005-0140601E5 F - Ristournes - Coop de travailleurs actionnaire Income Tax Act - Section 135 - Subsection 135(1) s. 135(1) can apply to payments to worker members of a shareholder worker co-operative
28 October 2005 External T.I. 2005-0145891E5 F - Redemption of Shares - Balance of Purchase Price Income Tax Act - Section 84 - Subsection 84(3) amount of deemed dividend arose on redemption date based on amount of covenanted future redemption payments
2005-10-28 17 October 2005 External T.I. 2005-0139031E5 F - Activités exercées en dehors de la réserve Income Tax Act - Section 149 - Subsection 149(1) - Paragraph 149(1)(d.6) timber royalties derived from timber cutting off the reserve had non-reserve situs
Income Tax Act - Section 149 - Subsection 149(1.2) timber royalties derived from agreement with provincial government but paid by 3rd party operator did not qualify
2005-10-21 29 August 2005 External T.I. 2005-0125811E5 F - Actions prescrites: 6204(1)b) du Règlement Income Tax Regulations - Regulation 6204 - Subsection 6204(1) - Paragraph 6204(1)(b) likelihood that employees’ stock option shares would be immediately repurchased meant they were not prescribed shares
Income Tax Act - Section 248 - Subsection 248(28) s. 248(28) does not preclude the application of s. 84(3) on the exercise of employee stock options and the immediate redemption of the acquired shares
18 October 2005 Internal T.I. 2005-0133411I7 F - Penalty for repeated failures to report income Income Tax Act - Section 163 - Subsection 163(1) simultaneous filing of returns for three successive years, each with unreported income, did not engage s. 163(1) (if no unreported income in prior years)
8 September 2005 Internal T.I. 2005-0133721I7 F - Crédit d'impôt - fonds de travailleurs Income Tax Act - Section 211.8 - Subsection 211.8(1) no s. 211.8(1) tax where shares of provincially regulated LSVCC are redeemed and where there is no acquisition of replacement shares
30 August 2005 External T.I. 2005-0134081E5 F - Transfert d'un REER entre conjoints de fait Income Tax Act - Section 146 - Subsection 146(16) - Paragraph 146(16)(b) application to RRSP transfer between two separated common-law partners pursuant to written separation agreement
17 August 2005 External T.I. 2005-0135911E5 F - REEE- Établissement d'enseignement à l'étranger Income Tax Act - Section 146.1 - Subsection 146.1(1) - Post-Secondary Educational Institution a foreign educational institution that is listed in the American Council on Education's Accredited Institutions of Postsecondary Education will be recognized as a "post-secondary educational institution"
6 October 2005 External T.I. 2005-0146061E5 F - Coop de travailleurs actionnaire - montants versés Income Tax Act - Section 82 - Subsection 82(1) - Paragraph 82(1)(a) interest on a preferred share was a dividend
Income Tax Act - Section 136 - Subsection 136(2) workers shareholder cooperative qualified
Income Tax Act - Section 135 - Subsection 135(4) - Allocation in Proportion to Patronage patronage dividend based on volume of work performed
11 October 2005 External T.I. 2005-0148281E5 F - Déductibilité de dépenses Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(a) - Legal and other Professional Fees accounting fees in preparing consolidated financial statements generally deductible
Income Tax Act - Section 248 - Subsection 248(24) s. 248(24) does not affect deductibility of fees for preparing consolidated financials
Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(b) - Capital Expenditure v. Expense - Improvements v. Repairs or Running Expense periodic (every 3 years) required actuarial valuations were currently deductible
13 September 2005 External T.I. 2005-0148831E5 F - REÉR - retenues à la source Income Tax Act - Section 153 - Subsection 153(1) - Paragraph 153(1)(j) no discretion (otherwise than under s. 153(1.1)) to relieve from withholding for an in-kind distribution
4 October 2005 External T.I. 2005-0149671E5 F - Congé à traitement différé Income Tax Regulations - Regulation 6801 - Paragraph 6801(a) - Subparagraph 6801(a)(v) returning to pre-retirement leave is not returning to “regular” employment
2005-10-07 30 September 2005 External T.I. 2004-0093661E5 F - Revenu d'une fiducie et droit acquis par un mineur Income Tax Act - 101-110 - Section 104 - Subsection 104(6) a specific clause allocating taxable portion of capital gains to income beneficiary and non-taxable portion to capital beneficiary can be recognized
Income Tax Act - 101-110 - Section 104 - Subsection 104(24) written trustee resolution may be necessary to establish that an amount of income has become payable
26 August 2005 Internal T.I. 2005-0131171I7 F - Alinéa 18(1) e) de la LIR Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(a) - Incurring of Expense no expense incurred for maintenance obligation until contractual obligation to someone
Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(e) no specific contractual obligation regarding maintenance obligation
2005-09-16 12 September 2005 External T.I. 2005-0134631E5 F - Superficial Loss - Realization of Latent Loss Income Tax Act - Section 54 - Superficial Loss loss could be realized by 4 unrelated individuals transferring their equal shareholdings of Opco to Newco
Income Tax Act - Section 251 - Subsection 251(1) - Paragraph 251(1)(c) 4 unrelated individuals transferring their equal shareholdings of Opco to Newco could be a NAL transaction
2005-09-09 31 August 2005 External T.I. 2005-0114421E5 F - Frais de garde d'enfants Income Tax Act - Section 63 - Subsection 63(3) - Child Care Expense fees for breach of contract can qualify but not educational fees
26 August 2005 Internal T.I. 2005-0121871I7 F - Assurance-vie commissions reçues par une société Income Tax Act - Section 9 - Nature of Income exemption for life insurance commissions on broker’s own life inapplicable where commission is assigned to his corporation carrying on the business
31 August 2005 Internal T.I. 2005-0134831I7 F - Capital Gains Exemption Strip Income Tax Act - Section 84.1 - Subsection 84.1(1) - Paragraph 84.1(1)(a) s. 84.1 did not apply to transferring crystallized preferred shares’ ACB to common shares under s. 40(3.6)(b), with those shares exchanged for high-PUC prefs of new Holdcos for cash redemption
Income Tax Act - Section 245 - Subsection 245(4) the use of s. 40(3.6)(b) for surplus-stripping purposes would be referred to the GAAR Committee
Income Tax Act - Section 40 - Subsection 40(3.6) individuals holding high-ACB/low-PUC prefs and low ACB/PUC common shares preserved that ACB under s. 40(3.6)(b) for surplus-stripping purposes on their prefs’ redemption

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