Translations of recent severed letters

Bundle Date Translated severed letter Summaries under Summary descriptor
2005-04-15 7 April 2005 External T.I. 2004-0099191E5 F - Inventaire d'un artiste Income Tax Act - Section 10 - Subsection 10(6) reporting nil inventory on T2124 form is treated as making the election
Income Tax Act - Section 70 - Subsection 70(2) application of s. 70(2) or (3) to artist’s inventory
Income Tax Act - Section 9 - Capital Gain vs. Profit - Commodities, and commodities futures and derivatives legatee generally acquires a deceased artist’s inventory on capital account
4 April 2005 External T.I. 2004-0099411E5 F - Transfert de contrat de crédit-bail Income Tax Act - Section 68 purchase price for lease with bargain purchase option likely to be allocated to the embedded option
Income Tax Act - Section 49 - Subsection 49(1) CRA position on allocating lease payments to bargain purchase option extended to assignment of the lease agreement
31 March 2005 External T.I. 2004-0101171E5 F - Entreprise de placement déterminée Income Tax Act - Section 125 - Subsection 125(7) - Specified Investment Business - Paragraph (b) para. (b) test can be satisfied if the affiliate provides sufficient part-time employees
7 April 2005 External T.I. 2004-0103551E5 F - Choix - Engagement de non-concurrence Income Tax Act - Section 56.4 - Subsection 56.4(3) - Paragraph 56.4(3)(c) - Subparagraph 56.4(3)(c)(vi) election to be made on form of letter on CRA website
7 April 2005 Internal T.I. 2005-0110991I7 F - Frais de garde d'enfants Income Tax Act - Section 63 - Subsection 63(2) - Paragraph 63(2)(b) - Element C - Subparagraph (i) - Clause (i)(B) - Subclause (i)(B)(I) “period of not less than 2 weeks” refers to 2 consecutive weeks
29 March 2005 Internal T.I. 2005-0111401I7 F - Article 7306 du Règlement Income Tax Regulations - Regulation 7306 referenced taxation year is the individual's calendar year
11 April 2005 External T.I. 2005-0112321E5 F - Price adjustment clause Income Tax Act - Section 51 - Subsection 51(2) CRA may accept a price adjustment clause adjusting of share consideration on s. 51 exchange if genuine attempt to establish FMV and issue of intervening share cancellation is addressed
General Concepts - Effective Date CRA may also accept a price adjustment clause for improving the attributes of the shares received on an exchange so as to equal the exchange price
Income Tax Act - Section 15 - Subsection 15(1) where FMV of pre shares received on estate-freeze s. 51 exchange was less than that of the exchanged common shares, CRA would apply s. 51(2), not s. 15(1)
21 March 2005 Internal T.I. 2005-0119961I7 F - CCPC STATUS General Concepts - Effective Date effective date of transfer of shares (entailing acquisition of control) cannot precede determination of essential contract elements
Income Tax Act - Section 251.2 - Subsection 251.2(2) - Paragraph 251.2(2)(a) moving from one shareholder to 2 equal shareholders generally entails an acquisition of control unless there is deadlock
12 April 2005 External T.I. 2005-0121251E5 F - Temps supplémentaire accumulé Income Tax Act - Section 248 - Subsection 248(1) - Salary Deferral Arrangement question of fact whether ability of employees to bank their overtime was an SDA
2005-04-08 4 April 2005 External T.I. 2005-0110941E5 F - Transfert d'une police d'assurance-vie Income Tax Act - Section 15 - Subsection 15(1) factors relevant to determining FMV of life insurance policy
Income Tax Act - Section 148 - Subsection 148(9) - Adjusted Cost Basis ACB of life insurance policy transferred to shareholder increased by s. 15(1) benefit
2005-04-01 30 March 2005 External T.I. 2004-0102421E5 F - Placement à rendement progressif Income Tax Regulations - Regulation 7000 - Subsection 7000(2) - Paragraph 7000(2)(c) the computation should use the maximum known rate for each period, and assign nil to a period for which no rate is specified
18 March 2005 External T.I. 2004-0070911E5 F - Allocation ou salaire - traitement fiscal Income Tax Act - Section 6 - Subsection 6(1) - Paragraph 6(1)(b) - Subparagraph 6(1)(b)(iii) meaning of representation allowance
18 March 2005 External T.I. 2004-0089661E5 F - Fiducie personnelle-Résidence principale Income Tax Act - Section 54 - Principal Residence - Paragraph (c.1) - Subparagraph (c.1)(ii) the residence being leased to the specified beneficiary does not change that it may be a principal residence to the trust
Income Tax Act - Section 107 - Subsection 107(4) application of s. 107(4) to spouse trust respecting residence turned on whether such trust was terminated by such income interest being distributed to the capital beneficiary during the spouse’s lifetime or on her death
Income Tax Act - Section 106 - Subsection 106(2) s. 106(2) engaged where income interest renounced in favour of capital beneficiary, but not where extinguishment on death
23 March 2005 Internal T.I. 2005-0113931I7 F - Safe income on hand calculation: Life Insurance Income Tax Act - Section 55 - Subsection 55(2.1) - Paragraph 55(2.1)(c) non-deductible life insurance premiums reduced SIOH
18 March 2005 External T.I. 2005-0117691E5 F - Significant increase in interest in any corp Income Tax Act - Section 55 - Subsection 55(3) - Paragraph 55(3)(a) - Subparagraph 55(3)(a)(ii) preliminary transfer of Opco shares to Holdco preliminary to a spin-off engaged the s. 55(3)(a)(ii) exclusion
17 March 2005 External T.I. 2005-0118601E5 F - Sale of Shares-Transfer of Family Business Income Tax Act - Section 84.1 - Subsection 84.1(2) - Paragraph 84.1(2)(a.1) - Subparagraph 84.1(2)(a.1)(ii) preliminary s. 85(1)(g) exchange transaction for crystallized preferred shares avoided application of s. 84.1(2)(a.1)(ii)
Income Tax Act - Section 245 - Subsection 245(4) GAAR could apply where previous capital gains crystallization transaction indirectly generated a capital loss on a pref redemption transaction
2005-03-25 22 March 2005 External T.I. 2005-0112081E5 F - Convention de retraite - lettre de crédit Income Tax Act - Section 207.7 - Subsection 207.7(2) where LC used to secure RCA benefits and refundable tax generated on funding of LC fees, refundable tax not recoverable based on paying the benefits
Income Tax Act - Section 207.5 - Subsection 207.5(1) - Refundable Tax use of letter of credit to secure RCA benefits
Income Tax Act - Section 207.5 - Subsection 207.5(2) election not available to custodian holding an LC
22 March 2005 Internal T.I. 2005-0115451I7 F - Extinction d'une remise de dette Income Tax Act - Section 80 - Subsection 80(1) - Forgiven Amount no deduction where forgiven debt is subsequently restored pursuant to improved fortunes clause
Income Tax Act - Section 80.01 - Subsection 80.01(10) repayment deduction under s. 80.01(10)
General Concepts - Effective Date CRA assesses based on the state of affairs at year end
2005-03-18 1 February 2005 External T.I. 2004-0083921E5 F - Société mandataire, gain & CIÉ Income Tax Act - Section 126 - Subsection 126(7) - Non-Business-Income Tax US taxes paid by a corporation based on falsely representing that the related gain was its gain could generate a FTC to the Canadian shareholder for which it in fact was agent
4 February 2005 External T.I. 2004-0085361E5 F - Changement de résidence: émigration Income Tax Act - Section 122.6 - Eligible Individual - Paragraph (c) required repayment of CCB if received after departure from Canada
31 January 2005 External T.I. 2004-0091301E5 F - Déductions à la source-avantage autre qu'en argent Income Tax Act - Section 153 - Subsection 153(1) - Paragraph 153(1)(a) no source deductions required where a non-cash benefit is the sole remuneration
Income Tax Act - Section 153 - Subsection 153(1.1) no source deductions required where free accommodation was the intern's only benefit
4 February 2005 External T.I. 2004-0093611E5 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) - Clause 39(1)(a)(i.1)(B) s. 39(1)(a)(i.1) unavailable where capital gain realized under s. 104(4)
15 March 2005 Internal T.I. 2004-0108721I7 F - Don d'une licence Income Tax Act - Section 118.1 - Subsection 118.1(1) - Total Charitable Gifts gift of a non-exclusive software licence was a gift of property
Income Tax Act - Section 248 - Subsection 248(1) - Property excepting WIP, definition of property is no broader than term’s ordinary meaning
2005-03-11 3 March 2005 External T.I. 2004-0096371E5 F - Revenu tiré d'un emploi et 110(1)f)(iii) Income Tax Act - Section 110 - Subsection 110(1) - Paragraph 110(1)(f) - Subparagraph 110(1)(f)(iii) no special tests under s. 110(1)(f)(iii) for determining whether the individual is self-employed

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