Translations of recent severed letters

Bundle Date Translated severed letter Summaries under Summary descriptor
2005-06-17 7 June 2005 External T.I. 2005-0121551E5 F - Déduction des intérêts - co-emprunteurs Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(c) - Subparagraph 20(1)(c)(i) interest on money borrowed from spouse under line of credit for income-producing purpose is deductible
7 June 2005 External T.I. 2005-0121921E5 F - Paiement à un emphytéote Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(b) - Capital Expenditure v. Expense - Improvements v. Repairs or Running Expense Belgega -finding that inducement paid to prospective emphyteuta (tenant) was capital expenditure - noted
Income Tax Act - Section 9 - Timing notwithstanding Canderel, tenant inducement payment must be amortized under matching principle if incurred for specific purposes of producing identifiable future revenue
9 June 2005 Internal T.I. 2005-0122511I7 F - Créance irrécouvrable dans une OSBL Income Tax Act - Section 39 - Subsection 39(1) - Paragraph 39(1)(c) - Subparagraph 39(1)(c)(iv) loss on interest-bearing loan made by a director to an NPO qualified as BIL if NPO qualified as SBC
Income Tax Act - Section 40 - Subsection 40(2) - Paragraph 40(2)(g) - Subparagraph 40(2)(g)(ii) a debt obligation bearing a reasonable rate of interest satisfies s. 40(2)(g)(ii)
2005-06-10 9 June 2005 External T.I. 2004-0092001E5 F - Droits indivis dans les actions Income Tax Act - 101-110 - Section 110.6 - Subsection 110.6(1) - Qualified Small Business Corporation Share undivided interests in SBC shares on s. 98(3) winding up could qualify as shares of QSBC shares
Income Tax Act - Section 248 - Subsection 248(1) - Share undivided interests in QSBC shares qualify as shares
19 May 2005 External T.I. 2005-0113681E5 F - Dédommagement pour congédiement injustifié Income Tax Act - Section 5 - Subsection 5(1) court-ordered reinstatement order gives rise to employment income
11 May 2005 Roundtable, 2005-0118691C6 F - Certificat américain d'actions étrangères Income Tax Act - Section 181.2 - Subsection 181.2(4) - Paragraph 181.2(4)(a) ADR holder holds shares if such holder has all the attributes of ownership of the shares
11 May 2005 Roundtable, 2005-0118731C6 F - Contrat avec une société d'affacturage Income Tax Act - Section 181.2 - Subsection 181.2(3) - Paragraph 181.2(3)(f) characterization as “loans and advances” and “all other indebtedness” based on legal character
24 May 2005 External T.I. 2005-0121291E5 F - Processing in Canada of ore Income Tax Act - Section 125.1 - Subsection 125.1(3) - Manufacturing or Processing - Paragraph (f) - Subparagraph (f)(i) second crushing of nickel ore at the surface is excluded processing
Income Tax Regulations - Regulation 1204 - Subsection 1204(1) - Paragraph 1204(1)(b) - Subparagraph 1204(1)(b)(iii) - Clause Subparagraph 1204(1)(b)(iii)(A) second crushing of nickel ore at the surface generated gross resource profits
Income Tax Regulations - Schedules - Schedule II - Class 10 - Paragraph 10(k) mobile plant of subcontractor used at mine surface level to further crush ore before its transport qualified under 10(k)
31 May 2005 External T.I. 2005-0122641E5 F - Intérêts courus Income Tax Regulations - Regulation 7000 - Subsection 7000(2) - Paragraph 7000(2)(c.1) Reg. 7000(2)(c.1) applied on December 31 of each year to investment contract issued on January 1
Income Tax Act - Section 12 - Subsection 12(11) - Anniversary Day anniversary day for an investment contract issued on January 1 is December 31
11 May 2005 Roundtable, 2005-0127081C6 F - États financiers - Impôt de la Partie I.3 Income Tax Act - Section 181 - Subsection 181(3) GAAP refers to Canadian GAAP
2005-05-27 16 May 2005 Internal T.I. 2005-0119061I7 F - Montant d'aide-actions Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(x) - Subpargraph 12(1)(x)(viii) funding of film production company by shares rather than loan would not give rise to assistance
Income Tax Act - Section 125.4 - Subsection 125.4(1) - Assistance - Paragraph (a) conversion of loan that was taxable assistance into shares is not itself assistance]
Income Tax Act - Section 80 - Subsection 80(1) - Excluded Obligation - Paragraph (a) conversion of loan that was taxable assistance under s. 12(1)(x) into shares with lower FMV would not give rise to forgiven amount
Income Tax Regulations - Regulation 1106 - Subsection 1106(1) - Excluded Production - Paragraph (a) - Subparagraph (a)(iii) transfer of all the revenues to a film implies a transfer of its copyright
General Concepts - Ownership transfer of the economic benefit of copyright entails transfer of its ownership
Income Tax Act - Section 53 - Subsection 53(1) - Paragraph 53(1)(c) subscription for shares of sub at overvalue constitutes a contribution of capital, generating a s. 53(1)(c) basis bump
2005-05-20 26 April 2005 External T.I. 2004-0107761E5 F - Aide à domicile/SAAQ Income Tax Act - Section 3 - Paragraph 3(a) - Business Source/Reasonable Expectation of Profit Maurice inapplicable where the adult, mentally capable, victim receives the insurance himself and pays it as compensation for his wife’s care services
Income Tax Act - Section 9 - Timing amount not business income until the entitlement thereto was determined
25 April 2005 Internal T.I. 2004-0108301I7 F - Coût d'une automobile Income Tax Act - Section 6 - Subsection 6(2) - Element C cost of automobile acquired pursuant to exercise of bargain purchase option increased under s. 49(3) by portion of each preceding lease payment treated as an option premium
Income Tax Act - Section 49 - Subsection 49(3) each car lease payment contained an embedded premium referable to the bargain purchase option, which was added under s. 49(3)
2 May 2005 External T.I. 2005-0115461E5 F - Résidence des membres du clergé Income Tax Act - Section 8 - Subsection 8(1) - Paragraph 8(1)(c) RC pastoral workers did not qualify
6 May 2005 External T.I. 2005-0116981E5 F - Rollover under section 85 of an ECP Income Tax Act - Section 14 - Subsection 14(1) - Paragraph 14(1)(a) “exempt gains balance" is of no utility in calculating the amount to be included in income under … 14(1)(a)"
29 April 2005 External T.I. 2005-0117371E5 F - Ristourne payée à une société de personnes Income Tax Act - Section 135 - Subsection 135(3) partnership is a look-though entity for patronage dividend withholding tax purposes
4 May 2005 Internal T.I. 2005-0121761I7 F - Déduction des intérêts - améliorations locatives Income Tax Act - Section 18 - Subsection 18(3.1) - Paragraph 18(3.1)(a) s. 18(3.1) generally inapplicable to borrowing by tenant to make leasehold improvements
13 May 2005 External T.I. 2005-0126531E5 F - Capital Gain Strip/Significant Increase Income Tax Act - Section 55 - Subsection 55(3) - Paragraph 55(3)(a) - Subparagraph 55(3)(a)(ii) subscription by employees for shares of employeeco was part of series of transactions resulting in the redemption of shares held in employeeco, so that s. 55(3)(a)(ii) exclusion applied
Income Tax Act - Section 55 - Subsection 55(3) - Paragraph 55(3)(a) - Subparagraph 55(3)(a)(v) employees’ subscription for shares of employeeco and redemption years later of employeeco preferred shares held by parentco engaged the s. 55(3)(a)(v) exclusion
13 May 2005 Internal T.I. 2005-0127041I7 F - Revisions of CCA and non-capital loss claims Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(a) - Revising Claims permissible to revise return to increase CCA and decrease NCL carryforward to that year
2005-05-13 11 April 2005 External T.I. 2004-0091721E5 F - Usufruit d'un bien immeuble situé en France Income Tax Act - Section 248 - Subsection 248(3) - Paragraph 248(3)(a) usufructuary of rental property received the rental income under s. 108(5)(a) as deemed trust income beneficiary
18 April 2005 External T.I. 2004-0093821E5 F - Fiducie créée par testament Income Tax Act - Section 70 - Subsection 70(6) - Paragraph 70(6)(b) spouse electing not to receive income, so that it is added to corpus, does not taint spouse trust status
Income Tax Act - 101-110 - Section 108 - Subsection 108(1) - Testamentary Trust - Paragraph (c) - Subparagraph (c)(i) beneficiary electing not to receive income before it becomes payable does not taint the trust (cf. renouncing income already payable)
18 April 2005 External T.I. 2004-0096231E5 F - Déduction de l'impôt payable - emploi à l'étranger Income Tax Act - Section 122.3 - Subsection 122.3(1) - Paragraph 122.3(1)(a) severance allowance not employment income until year of receipt
22 March 2005 External T.I. 2004-0098591E5 F - Application de l'alinéa 212(9)d) proposé Income Tax Act - Section 212 - Subsection 212(9) - Paragraph 212(9)(d) extension to provincial regulatory authority under review
13 April 2005 Internal T.I. 2004-0109071I7 F - Partie XIII et revenus locatifs Income Tax Act - Section 215 - Subsection 215(3) property manager required to withhold on the gross rents collected absent a s. 216(4) election
Income Tax Act - Section 216 - Subsection 216(4) services provided by property manager to tenant were sufficiently limited to permit making the s. 216(4) election

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