Translations of recent severed letters

Bundle Date Translated severed letter Summaries under Summary descriptor
2005-02-04 2 February 2005 Internal T.I. 2005-0111961I7 F - Reassessment of a Partner Income Tax Act - Section 152 - Subsection 152(1.4) CRA can assess a partner directly to change the partnership income allocable to it rather than being required to make a partnership-level determination under s. 152(1.4)
2005-01-28 19 January 2005 External T.I. 2004-0075601E5 F - Fiducie de fonds commun de placement Income Tax Act - Section 53 - Subsection 53(2) - Paragraph 53(2)(h) - Subparagraph 53(2)(h)(i.1) no ACB reduction from distribution of ordinary income or capital gain (cf. ROC distribution) irrespective whether effected as cash or unit distribution
Income Tax Act - Section 248 - Subsection 248(25.3) cost under s. 248(25.3) for distribution of ordinary income or capital gain made as units distribution
19 January 2005 External T.I. 2004-0081001E5 F - Réserve de valorisation d'une coopérative Income Tax Act - Section 135 - Subsection 135(4) - Allocation in Proportion to Patronage question of fact whether distributions of enhancement reserves are allocations in accordance with patronage
Income Tax Act - Section 181.2 - Subsection 181.2(3) - Paragraph 181.2(3)(b) enhancement reserve of Quebec cooperative added to capital
5 January 2005 External T.I. 2004-0085571E5 F - Art. XXIV de la Convention Canada-France Treaties - Income Tax Conventions - Article 25 Art. 24(1) of Canada-France Convention would provide the principal residence exemption to a Canadian citizen if France accorded the exemption to a French national residing in Canada
6 January 2005 External T.I. 2004-0087221E5 F - Modification de la déclaration d'une société Income Tax Act - Section 53 - Subsection 53(2) - Paragraph 53(2)(h) - Subparagraph 53(2)(h)(i.1) return amendment should be requested where a capital gain has been unreported due to a missed ROC distribution
6 January 2005 External T.I. 2004-0088791E5 F - Paragraphe 4803(2) du Règlement Income Tax Regulations - Regulation 4803 - Subsection 4803(2) Reg. 4803(2) satisfied if any of its paragraphs is satisfied
24 January 2005 External T.I. 2004-0099471E5 F - Convention de retraite pour un actionnaire-employé Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(r) no deduction regarding pre-incorporation services, and longstanding CRA position re shareholder-manager compensation
Income Tax Act - Section 67 81 Roundtable position on shareholder-manager compensation also applies to RCA contributions
Income Tax Act - Section 56 - Subsection 56(1) - Paragraph 56(1)(x) Part XI.3 tax and s. 56(1)(x) income inclusion apply even where RCA contribution is partially or fully non-deductible
Income Tax Act - Section 248 - Subsection 248(1) - Salary Deferral Arrangement a significant reduction in bonus or salary matched by an RCA contribution likely suggests it instead is an SDA
20 January 2005 External T.I. 2004-0104921E5 F - RPDB et déficit cumulé Income Tax Act - Section 147 - Subsection 147(1) - Profit Sharing Plan corporation with an accumulated deficit is not precluded from registering a DPSP
2005-01-21 10 January 2005 Internal T.I. 2004-0091251I7 F - Définition d'automobile Income Tax Act - Section 248 - Subsection 248(1) - Automobile - Paragraph (e) - Subparagraph (e)(iii) exclusion applies even where the occupant is self-employed rather than an employee of the business that owns (or leases) the truck
19 January 2005 External T.I. 2004-0091601E5 F - Incitatif versé - taux d'intérêt réduit Income Tax Act - Section 53 - Subsection 53(2.1) ss. 13(7.4) and 53(2.1) elections unavailable re acquired rental property for cashback received from mortgage lender to offset high interest rate
Income Tax Act - Section 12 - Subsection 12(2.2) s. 12(2.2) election available to reduce mortgage interest, re cashback received from mortgage lender, to reduce extra interest incurred in two initial years
Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(x) - Subparagraph 12(1)(x)(v) s. 12(1)(x) applies (subject to s. 12(2.2) election) to lump-sum mortgage interest rebate except to the extent the amount was reported as s. 9 income
11 January 2005 External T.I. 2004-0091981E5 F - Revenu de placements:Indiens inscrits Other Legislation/Constitution - Federal - Indian Act - Section 87 interest income of status Indians on loans to on-reserve businesses carrying on their business activities off-reserve were not exempted
2005-01-14 10 January 2005 External T.I. 2004-0095361E5 F - Dommages Income Tax Act - Section 56 - Subsection 56(1) - Paragraph 56(1)(a) - Subparagraph 56(1)(a)(i) damages for negligence resulting in not becoming entitled to QPP would not be income under s. 56(1)(a)(i)
Income Tax Act - Section 3 - Paragraph 3(a) courts have preferred to tax on the basis of an identified source
13 January 2005 External T.I. 2004-0097911E5 F - Crédit d'impôt pour études Income Tax Act - Section 118.6 - Subsection 118.6(1) - Qualifying Educational Program education credit unavailable where the course consisted of discrete 4-day sessions separated by a month or more – but tuition credit may be available
6 January 2005 Internal T.I. 2004-0100241I7 F - Imposition des rentes au décès Income Tax Act - Section 148 - Subsection 148(2) - Paragraph 148(2)(b) no disposition of PAC under s. 148(2)(b) – but disposition if estate elects to commute
Income Tax Act - Section 148 - Subsection 148(9) - Proceeds of the Disposition - Paragraph (d) disposition gain based on accumulating fund
13 January 2005 External T.I. 2004-0101701E5 F - Bien substitué Income Tax Act - Section 248 - Subsection 248(5) - Paragraph 248(5)(b) substituted property definition in s. 248(5)(b) does not apply for the purposes of s. 7(1.1)
Statutory Interpretation - Interpretation/Definition Provisions deeming provision only engaged when the referenced term is used
Income Tax Act - Section 7 - Subsection 7(1.1) s. 248(5)(b) inapplicable to s. 7(1.1)
13 January 2005 External T.I. 2004-0103281E5 F - dons et avantages Income Tax Act - Section 248 - Subsection 248(32) value of advantage should be based on FMV and ignore sales tax and tips
2005-01-07 21 December 2004 External T.I. 2004-0085481E5 F - Titres détenus par une compagnie d'assurance Income Tax Act - Section 142.2 - Subsection 142.2(1) - Mark-to-Market Property MFT units not mark-to-market property
Income Tax Act - Section 248 - Subsection 248(1) - Inventory per Friesen, securities held on income account are inventory
21 December 2004 External T.I. 2004-0091011E5 F - Déductibilité-primes d'assurance-responsabilité Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(a) - Start-Up and Liquidation Costs premiums for professional liability coverage incurred after the cessation of practice for continued coverage re that practice, are deductible
21 December 2004 External T.I. 2004-0093361E5 F - Report de l'impôt minimum de remplacement-décès Income Tax Act - Section 120.2 - Subsection 120.2(2) if the tax generated in the terminal year is insufficient to recover the AMT paid in the preceding year, the deceased individual can no longer utilize a s. 120.2(2) carryback
21 December 2004 Internal T.I. 2004-0096211I7 F - Remise de dettes Income Tax Act - Section 80.01 - Subsection 80.01(4) no need for s. 80.01(4) election if assets of sub in the amount of the debt owing to the parent are distributed on the winding up in payment of that debt
13 December 2004 Internal T.I. 2004-0097931I7 F - Définition de Divertissement - 67.1(4) Income Tax Act - Section 67.1 - Subsection 67.1(4) - Paragraph 67.1(4)(b) no application of s. 67.1 where employer operates a fitness centre for its employees
16 December 2004 Internal T.I. 2004-0098631I7 F - Déduction - Résidence des membres du clergé Income Tax Act - Section 8 - Subsection 8(1) - Paragraph 8(1)(c) based on Noseworthy, RC lay pastoral workers (in one case, authorized to baptize on occasion) were not regular ministers
16 December 2004 Internal T.I. 2004-0100891I7 F - Prestations d'assistance sociale Income Tax Act - Section 81 - Subsection 81(1) - Paragraph 81(1)(h) government and user-funded assistance with accommodation and care while attending psychiatric day hospital was exempted
2004-12-31 20 December 2004 External T.I. 2004-0092871E5 F - Arm's Length: de facto control Income Tax Act - Section 256 - Subsection 256(5.1) Silicon Graphics has not changed the CRA view that the holder of a large demand note can have de facto control
17 December 2004 External T.I. 2004-0095331E5 F - Déductibilité des intérêts Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(c) - Subparagraph 20(1)(c)(i) where 1/3 of property, that had appreciated after being acquired with borrowed money, is sold and used for personal purposes, 1/3 of the interest ceases to have an eligible current use
2004-12-17 1 December 2004 Internal T.I. 2004-0065131I7 F - Sécurité sociale des États-Unis Income Tax Act - Section 56 - Subsection 56(1) - Paragraph 56(1)(a) - Subparagraph 56(1)(a)(i) US disability benefits under the US Social Security Act converted at age 62 to retirement benefits are includible under s. 56(1)(a)(i)
17 November 2004 External T.I. 2004-0067981E5 F - Fiducie de fonds commun de placement Income Tax Act - Section 132.11 - Subsection 132.11(6) s. 132.11(6) income must be pushed out to the unitholders in order to generate a s. 132.11(7) deduction
16 December 2004 External T.I. 2004-0070341E5 F - Déduction des intérêts sur un deuxième emprunt Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(c) - Subparagraph 20(1)(c)(i) interest on money borrowed to pay interest on an interest-deductible loan is deductible

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