Translations of recent severed letters

Bundle Date Translated severed letter Summaries under Summary descriptor
2004-11-12 27 October 2004 External T.I. 2004-0088581E5 F - Prêt à un actionnaire Income Tax Act - Section 15 - Subsection 15(2) - Paragraph 15(2)(a) exception continues to apply following cessation of employment
8 November 2004 External T.I. 2004-0092021E5 F - RDTOH: Foreign tax credit under sub. 126(1) Income Tax Act - Section 129 - Subsection 129(4) - Non-Eligible Refundable Dividend Tax on Hand - Paragraph (a) - Subparagraph (a)(i) - Variable B RDTOH was reduced by s. 126(1) credit even where it related to a Canadian business rather than a source of property income
Income Tax Act - Section 126 - Subsection 126(7) - Non-Business-Income Tax foreign tax on royalty income generated from a Canadian business generating IP gave rise to credit under s. 126(1) rather than s. 126(2)]
10 November 2004 External T.I. 2004-0096991E5 F - Shareholders' agreement Income Tax Act - Section 256 - Subsection 256(1.4) - Paragraph 256(1.4)(a) Aco, owned by X, is associated with Zco, owned equally by X and Y, where the shareholders’ agreement provides that either can acquire the other’s shares on the latter’s disability
Income Tax Act - Section 251 - Subsection 251(5) - Paragraph 251(5)(b) - Subparagraph 251(5)(b)(i) s. 256(1.4)(a) applied to a right to acquire the other’s shares even though it was reciprocal
8 October 2004 APFF Roundtable Q. 2, 2004-0085671C6 F - Scission d'entreprise - choix de 86.1 Income Tax Act - Section 86.1 - Subsection 86.1(2) sources of CRA information on s. 86.1
8 October 2004 APFF Roundtable Q. 6, 2004-0090831C6 F - 12(4) L.I.R. et fiducies personnelles Income Tax Act - Section 104 - Subsection 104(24) deemed income (e.g., under Reg. 7000) can be distributed if required by trust terms, or if permitted and trustee unconditionally exercise discretion to do so before year end
2004-11-05 25 October 2004 External T.I. 2004-0077031E5 F - Application de la division 20(1)e.2)(i)(B) Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(e.2) - Subparagraph 20(1)(e.2)(i) - Clause 20(1)(e.2)(i)(B) condition in s. 20(1)(e.2)(i)(B) is satisfied for a year if only a portion of the interest is deductible in that year pursuant to s. 20(1)(c)(iv)
8 October 2004 APFF Roundtable Q. 8, 2004-0090801C6 F - Benefit to Shareholders Income Tax Act - Section 15 - Subsection 15(1) s. 15(1) could apply where corporate funds used to acquire non-participating preferred shares
2004-10-29 15 October 2004 External T.I. 2004-0068421E5 F - Bien de remplacement Income Tax Act - Section 44 - Subsection 44(5) replacement property can be acquired from a related person
Income Tax Act - Section 44 - Subsection 44(5) - Paragraph 44(5)(a.1) rental use is a similar use even if shift from residential to commercial use
18 October 2004 External T.I. 2004-0077151E5 F - Déduction pour gain en capital Income Tax Act - Section 110.6 - Subsection 110.6(14) - Paragraph 110.6(14)(f) - Subparagraph 110.6(14)(f)(ii) no requirement for the combined period of holding to be 24 months
Income Tax Act - Section 110.6 - Subsection 110.6(1) - Qualified Small Business Corporation Share - Paragraph (e) para. (e) effectively requires a combined 24-month holding period for s. 110.6(14)(f)(i) or (iii) transactions
28 September 2004 Internal T.I. 2004-0079801I7 F - Pension alimentaire Income Tax Act - Section 56.1 - Subsection 56.1(4) - Support Amount settlement of support arrears are not deductible or includible
30 September 2004 Internal T.I. 2004-0083301I7 F - Entreprises distinctes Income Tax Act - Section 4 - Subsection 4(1) - Paragraph 4(1)(a) 2 different centres were branches of the same business
30 September 2004 Internal T.I. 2004-0085051I7 F - Intérêts et indemnité additionnelle Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(c) indemnity under CCQ Art. 1619 was pre-judgment interest
Income Tax Act - Section 129 - Subsection 129(4) - Income or Loss interest on damages relating to lost business was active business income
19 October 2004 Internal T.I. 2004-0085711I7 F - Dommages suite à une entente hors cour Income Tax Act - Section 248 - Subsection 248(1) - Retiring Allowance amount received in settlement of grievances and on agreeing to retire was a retiring allowance in the absence of evidence that it was for harassment or unpaid wages
Income Tax Act - Section 8 - Subsection 8(1) - Paragraph 8(1)(n) required repayment of excess amount of wage loss insurance previously received could give rise to s. 8(1)(n) deduction
25 October 2004 External T.I. 2004-0086261E5 F - Ristournes Income Tax Act - Section 135 - Subsection 135(1.1) patronage dividends paid after March 22, 2004 are non-deductible even if reported before then
20 October 2004 Internal T.I. 2004-0086501I7 F - Droits compensateurs Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(vv) posting of bonds for US countervailing duties did not constitute their being “paid” for s. 20(1)(vv) purposes
Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(e) obligation to repay suppliers for extra US countervailing duties charge made to them was contingent until a board decision reversed such duties
8 October 2004 Internal T.I. 2004-0093371I7 F - Crédit d'impôt à l'investissement & impôt minimum Income Tax Act - Section 127 - Subsection 127(5) - Paragraph 127(5)(a) - Subparagraph 127(5)(a)(ii) carryback of ITCs from year where the taxpayer was subject to minimum tax
19 October 2004 Internal T.I. 2004-0094971I7 F - Programme de formation admissible Income Tax Act - Section 118.6 - Subsection 118.6(1) - Qualifying Educational Program “period” referred to the times at which the individual was receiving income from employment
8 October 2004 APFF Roundtable Q. 1, 2004-0085551C6 F - Application de la division 20(1)e.2)(i)(B)
8 October 2004 APFF Roundtable Q. 4, 2004-0088411C6 F - Prêt à une société de personnes par une société Income Tax Act - Section 15 - Subsection 15(2) Gillette not followed: s. 15(2) applicable where a corporation makes a loan to a partnership equally owned by its 2 equal shareholders
8 October 2004 APFF Roundtable Q. 11, 2004-0090791C6 F - Maladies graves et soins de longue durée Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(a) - Income-Producing Purpose premiums for critical illness policies and individual long-term care policies for senior employees are deductible
Income Tax Act - Section 6 - Subsection 6(1) - Paragraph 6(1)(a) - Subparagraph 6(1)(a)(i) sickness plan can comprise individual critical illness policies
Income Tax Act - Section 6 - Subsection 6(1) - Paragraph 6(1)(f) periodic payments under long-term care insurance are not taxable
2004-10-22 19 October 2004 External T.I. 2004-0085561E5 F - Régime de droit à la plus-value des actions Income Tax Act - Section 248 - Subsection 248(1) - Salary Deferral Arrangement right under phantom plan to receive the appreciation, on employment termination, as an annuity could engage the SDA rules
23 September 2004 External T.I. 2004-0088801E5 F - Stop-Loss Provisions -- Grandfathering Income Tax Act - Section 112 - Subsection 112(3.2) s. 248(5)(b) did not deem stock dividend shares to be the same shares as those on which the dividend was paid for transitional relief purposes
Income Tax Act - Section 248 - Subsection 248(5) - Paragraph 248(5)(b) s. 248(5)(b) does not deem the substituted shares to have been owned for so long as were the underlying shares
29 September 2004 External T.I. 2004-0092261E5 F - Acquisition of control Income Tax Act - Section 256 - Subsection 256(7) - Paragraph 256(7)(d) s. 256(7)(d) applied where two individuals transferred their equal shareholdings of Opco to a joint Holdco
Income Tax Act - Section 256 - Subsection 256(7) - Paragraph 256(7)(a) - Subparagraph 256(7)(a)(i) - Clause 256(7)(a)(i)(A) no acquisition of control where the two equal shareholders of Opco transfer their respective shareholdings to respective holding companies
8 October 2004 APFF Roundtable Q. 5, 2004-0089141C6 F - Compte de dividendes en capital Income Tax Act - Section 148 - Subsection 148(9) - Adjusted Cost Basis - Element E ACB of policy immediately before death reduced by policy loan
Income Tax Act - Section 89 - Subsection 89(1) - Capital Dividend Account - Paragraph (d) amount net of policy loan added to CDA
2004-10-15 24 September 2004 External T.I. 2004-0055421E5 F - Frais de déplacement Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(h) a hospital could be a place of work if a regular work schedule there, even if no dedicated office there
29 September 2004 Internal T.I. 2004-0067311I7 F - Bureau à domicile Income Tax Act - Section 18 - Subsection 18(12) s. 18(12) does not alter the result where common expenses are allocated pro rata to the business and personal space in a home
27 September 2004 External T.I. 2004-0067721E5 F - Frais de garde d'enfants Income Tax Act - Section 63 - Subsection 63(3) - Child Care Expense - Paragraph (d) presumption that expenses incurred prior to kindergarten age are not educational
5 October 2004 External T.I. 2004-0067741E5 F - Indemnités aux jurés Income Tax Act - Section 3 - Paragraph 3(a) juror and witness compensation includible in income - but not allowances to cover reasonable expenses

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