Translations of recent severed letters

Bundle Date Translated severed letter Summaries under Summary descriptor
2005-05-20 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 - 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
3 May 2005 Internal T.I. 2005-0120021I7 F - Pension de retraite provenant de la France Treaties - Income Tax Conventions - Article 18 pension exemption under French Treaty continues to apply in the hands of surviving spouse
4 May 2005 External T.I. 2005-0120271E5 F - Change of Control - CDA & RDTOH Income Tax Act - Section 256 - Subsection 256(7) - Paragraph 256(7)(a) - Subparagraph 256(7)(a)(i) - Clause 256(7)(a)(i)(A) s. 256(7)(a)(i)(A) applied where taxpayer acquired shares of CCPC from his sister
2005-05-06 20 April 2005 External T.I. 2005-0110421E5 F - ACB BUMP on an AMALGAMATION Income Tax Act - Section 88 - Subsection 88(1) - Paragraph 88(1)(c) - Subparagraph 88(1)(c)(iii) land included in timber limit is ineligible property
Income Tax Act - Section 13 - Subsection 13(21) - Depreciable Property land included in timber limit is depreciable property
2 May 2005 Internal T.I. 2005-0113941I7 F - Reassessment in the Extended Reassessment Period Income Tax Act - Section 152 - Subsection 152(4) - Paragraph 152(4)(b) - Subparagraph 152(4)(b)(i) notwithstanding Agazarian, CRA may allow a consequential reallocation of the SBD where it reassesses under s. 152(4)(b)(i) to reduce a loss carryback (and will also adjust M&P credit)
2 May 2005 Internal T.I. 2005-0119971I7 F - CDA - Excessive Election & Late Filed Election Income Tax Act - Section 184 - Subsection 184(3) where the corporation failed to file s. 83(2) election, CRA should assess Pt. III tax first, then assess any s. 184(3) taxable dividends, without normal reassessment period limitation
Income Tax Act - Section 83 - Subsection 83(3.1) where no s. 83(2) election filed for statute-barred year, CRA should request late election under s. 83(3.1) or, failing which, assess a taxable dividend under s. 184(4)(b)(ii)
3 May 2005 Internal T.I. 2005-0120711I7 F - Subsection 104(2) of Regulations Income Tax Regulations - Regulation 104 - Subsection 104(2) - Paragraph 104(2)(b) no Reg. imposes withholding on a retiring allowance paid to a non-resident
2005-04-22 20 April 2005 External T.I. 2004-0101461E5 F - Péninsule de Gaspé"-"comté" Income Tax Act - Section 127 - Subsection 127(9) - Gaspé Peninsula “Kamouraska County” refers to the regional county municipality of Kamouraska
14 April 2005 External T.I. 2004-0107991E5 F - Participation à des études cliniques Income Tax Act - Section 3 - Paragraph 3(a) - Business Source/Reasonable Expectation of Profit amounts paid to individuals for participating in pharmaceutical clinical trials were income to them
20 April 2005 External T.I. 2005-0119901E5 F - Associated Corporations - Shareholders' Agreement Income Tax Act - Section 256 - Subsection 256(1.4) - Paragraph 256(1.4)(a) presumption of the referenced shares being issued and outstanding is relevant only re treasury shares and does not multiply already-issued shares
2005-04-15 31 March 2005 External T.I. 2004-0093651E5 F - Primes d'assurance-vie et d'assurance-invalidité Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(e.2) guarantee respecting another aspect of a loan by a government fund does not preclude deductibility of premiums on life policy assigned as security to bank
Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(b) - Capital Expenditure v. Expense - Financing Expenditures premiums on disability policy required by lender are capital expenditures
1 April 2005 External T.I. 2004-0097171E5 F - Item gagné lors d'un tirage Income Tax Act - Section 6 - Subsection 6(1) - Paragraph 6(1)(a) prize won in raffle by employee was includible in employee’s income to the extent of the portion of its value that was funded by the employer rather than fellow employees
Income Tax Act - Section 3 - Paragraph 3(a) position on exempt lottery winnings did not apply to extent prize was indirectly funded by employer
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

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