Translations of recent severed letters

Bundle Date Translated severed letter Summaries under Summary descriptor
2005-06-17 9 June 2005 External T.I. 2004-0097451E5 F - Régimes d'assurances collectives Income Tax Act - Section 6 - Subsection 6(1) - Paragraph 6(1)(f) CRA criteria for determining whether there are 2 separate plans (one of which is fully employee-funded)
9 June 2005 Internal T.I. 2004-0105421I7 F - Déductibilité des frais juridiques et d'intérêts Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(b) - Capital Expenditure v. Expense - Damages legal fees to defend against claim for unpaid construction fees on building addition were on capital account
Income Tax Act - Section 13 - Subsection 13(21) - Undepreciated Capital Cost - A legal fees to defend against claim for unpaid construction fees on building addition were not a capital cost addition
Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(c) - Subparagraph 20(1)(c)(ii) interest paid pursuant to a judgment requiring payment of construction fees would be deductible but for s. 18(3.1)
Income Tax Act - Section 18 - Subsection 18(3.1) interest paid pursuant to a judgment requiring payment of construction fees would be capitalized to the construction costs to the extent of accrual during construction period
6 June 2005 External T.I. 2005-0114481E5 F - Division 149(1)o.2)(ii)(C) Income Tax Act - Section 149 - Subsection 149(1) - Paragraph 149(1)(o.2) - Subparagraph 149(1)(o.2)(ii) - Clause 149(1)(o.2)(ii)(B) deferred proceeds receivable for real estate sale do not qualify as real property
Income Tax Act - Section 149 - Subsection 149(1) - Paragraph 149(1)(o.2) - Subparagraph 149(1)(o.2)(ii) - Clause 149(1)(o.2)(ii)(C) loan that funded rental property acquisition may still qualify after partial sale of portfolio/replacement borrowing can also qualify
Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(c) - Subparagraph 20(1)(c)(i) loan that funded rental property acquisition may still qualify as “solely for the purpose of earning income” per s. 149(1)(o.2)(ii)(C) after partial sale of portfolio
9 June 2005 Internal T.I. 2005-0115481I7 F - Avantages imposables/voyages Income Tax Act - Section 6 - Subsection 6(1) - Paragraph 6(1)(a) since the particular shareholder-employees who benefited from trips provided by their employer’s supplier were known, the supplier should issue T4As to them
Income Tax Regulations - Regulation 200 - Subsection 200(2) - Paragraph 200(2)(g) T4As required to be issued to shareholder-employees of customers who were identifiable as receiving free trips – but not for sole proprietor customers
9 June 2005 Internal T.I. 2005-0117851I7 F - Choix du paragraphe 14(1.01) de la Loi Income Tax Act - Section 14 - Subsection 14(1.01) taxpayer could not make s. 14(1.01) election where "exempt gains balance" in respect of his business for the year is not nil
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 - 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

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