Translations of recent severed letters

Bundle Date Translated severed letter Summaries under Summary descriptor
2004-06-18 8 June 2004 Internal T.I. 2004-0067401I7 F - Dépenses d'une entreprise illégale Income Tax Act - Section 9 - Computation of Profit onus on taxpayer, who did not keep records, to displace the net worth assessment method results
General Concepts - Onus onus on taxpayer, who did not keep records, to displace the net worth assessment results, with documentation or other “acceptable evidence”
Income Tax Act - Section 20 - Subsection 20(16) terminal loss when illegal equipment was forfeited to the Crown by court order
Income Tax Act - Section 13 - Subsection 13(21) - Disposition of Property disposition when illegal equipment was forfeited to the Crown by court order, rather than when it was seized by the RCMP
Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(a) - Legal and other Professional Fees legal fees incurred to defend criminal charges for carrying on an illegal drug business were non-deductible
10 June 2004 Internal T.I. 2004-0073781I7 F - Orphelins et orphelines de Duplessis - intérêts Income Tax Act - Section 3 - Paragraph 3(a) interest earned on tax-free injury award was taxable
11 June 2004 External T.I. 2004-0076291E5 F - Renonciation aux intérêts à recevoir Income Tax Act - Section 12 - Subsection 12(3) renunciation of accrued interest during the year means that there is no inclusion of such interest during the year under s. 12(3) or 12(1)(c)
2004-06-11 18 May 2004 Internal T.I. 2004-0063351I7 F - Double déduction des intérêts et paragraphe 18(6) Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(c) - Subparagraph 20(1)(c)(i) double-dip structure does not preclude access to s. 20(1)(c) deduction
Income Tax Act - Section 18 - Subsection 18(6) thin cap rules not engaged by parent guarantee
28 May 2004 Internal T.I. 2004-0065101I7 F - Tenures à bail - Catégorie 13 et loyers Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(a) - Start-Up and Liquidation Costs rent on premises continued to be deductible after they were vacated
Income Tax Regulations - Regulation 1102 - Subsection 1102(1) - Paragraph 1102(1)(c) vacated leased premises continued to qualify as Class 13 property
Income Tax Act - Section 13 - Subsection 13(7) - Paragraph 13(7)(a) no change of use when premises were vacated
Income Tax Act - Section 13 - Subsection 13(21) - Disposition of Property no disposition when premises were vacated (but not abandoned)
28 May 2004 External T.I. 2004-0065291E5 F - Corp. associated through a third corp.: 256(2) Income Tax Act - Section 256 - Subsection 256(2) “either of the other two corporations" in pre-2016 version interpreted as "both of the other corporations"
31 May 2004 External T.I. 2004-0069681E5 F - Adjusted Cost Base of Real Property Income Tax Act - Section 54 - Adjusted Cost Base legal fees and settlement payment made in connection with disputed legacy of residence might be an addition to its ACB
3 June 2004 Internal T.I. 2004-0072971I7 F - Taxable Benefit - Life Insurance Premiums Income Tax Act - Section 15 - Subsection 15(1) no benefit conferral where corporation pays premiums on policy on life of its shareholder of which it is the policyholder and beneficiary
1 June 2004 Internal T.I. 2004-0078161I7 F - ITCs - Winding-up Income Tax Act - Section 88 - Subsection 88(1) - Paragraph 88(1)(e.3) ITCs incurred by sub only available to parent for post-wind-up years
Income Tax Act - Section 88 - Subsection 88(1) to be “wound up” there must generally be evidence that the sub will soon be dissolved
2004-06-04 27 May 2004 External T.I. 2003-0031231E5 F - Actions visées par règlement-gel successoral Income Tax Regulations - Regulation 6205 - Subsection 6205(2) - Paragraph 6205(2)(a) - Subparagraph 6205(2)(a)(i) test satisfied where the purpose was solely estate-freezing
Income Tax Regulations - Regulation 6205 - Subsection 6205(2) - Paragraph 6205(2)(a) - Subparagraph 6205(2)(a)(ii) - Clause 6205(2)(a)(ii)(A) - Subclause 6205(2)(a)(ii)(A)(II) trusts in which nieces and nephews were beneficiaries nonetheless were deemed NAL for purposes of satisfying Reg. 6205(2)(a)(ii)(A)(II)
31 May 2004 External T.I. 2003-0051971E5 F - Notion de capital aux fins de 20(1)c) de la Loi Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(c) - Subparagraph 20(1)(c)(i) stated capital inadequately measures capital for “filling the hole” purposes where PUC is ground under s. 85(2.1) or stated capital is increased to capitalize consolidated safe income
31 May 2004 External T.I. 2004-0055141E5 F - Vente de bien à un actionnaire Income Tax Act - Section 15 - Subsection 15(1) sale of newly constructed homes to shareholders at cost plus a gross margin did not avoid shareholder benefit issues
28 May 2004 Internal T.I. 2004-0064291I7 F - Paiement de dépenses Income Tax Act - Section 60.1 - Subsection 60.1(2) no need to expressly refer to ss. 56.1(2) and 60.1(2)
3 June 2004 External T.I. 2004-0068081E5 F - Allocation de retraite - Employeurs liés Income Tax Act - Section 60 - Paragraph 60(j.1) - Subparagraph 60(j.1)(v) predecessor employees were with whom service was recognized were related
1 June 2004 External T.I. 2004-0073441E5 F - Transfert d'un REÉR au décès Income Tax Act - Section 146 - Subsection 146(16) s. 146(16) cannot be utilized once one of the spouses has died
Income Tax Act - Section 146 - Subsection 146(8.1) whether s. 148(9.1) could be used to satisfy unpaid support of the deceased
31 May 2004 External T.I. 2004-0074381E5 F - Créance: calcul des intérêts Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(c) discount is not interest where its rate is “similar” to yield on similar bonds
Income Tax Act - Section 20 - Subsection 20(21) overview of s. 20(21)
31 May 2004 Internal T.I. 2004-0077341I7 F - Déduction de 110(1)d) de la Loi Income Tax Act - 101-110 - Section 110 - Subsection 110(1) - Paragraph 110(1)(d) - Subparagraph 110(1)(d)(ii) FMV may depart from the market price of shares
General Concepts - Fair Market Value - Shares market price is a prima facie indication of share FMV
2004-05-28 25 May 2004 External T.I. 2003-0051291E5 F - Formation et croisière Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(b) - Capital Expenditure v. Expense - Know-How and Training deducible cost of cruise that included seminars would not exceed the cost of a comparable domestic course
Income Tax Act - Section 20 - Subsection 20(10) costs of cruise, if not viewed as training, would be non-deductible as they were incurred outside Canada
2004-05-21 13 May 2004 External T.I. 2003-0051951E5 F - Course automobile amateur Income Tax Act - Section 3 - Paragraph 3(a) - Business Source/Reasonable Expectation of Profit if amateur car racing had a personal element, it should be determined whether it was carried on in a sufficiently commercial manner to be a business source
18 May 2004 External T.I. 2004-0069691E5 F - Incorporation des professionnels Income Tax Act - Section 98 - Subsection 98(3) - Paragraph 98(3)(b) WIP subject to s. 34 election is tranferred at nil
Income Tax Act - Section 34 insolvency practice carried on by accountants does not qualify as accountancy
Income Tax Act - Section 40 - Subsection 40(2) - Paragraph 40(2)(a) - Subparagraph 40(2)(a)(ii) only s. 40(2)(a)(ii)(A), not (B) or (C), is potentially engaged where transferor is individual
Income Tax Act - Section 249.1 - Subsection 249.1(2) s. 249.1(2) not engaged by virtue only of no income being allocated to the partner
12 May 2004 External T.I. 2004-0072951E5 F - Ristournes versées dans un REÉR Income Tax Act - Section 135 - Subsection 135(3) no 15% withholding where patronage dividend paid to RRSP or other exempt
2004-05-14 11 May 2004 External T.I. 2004-0069521E5 F - Don de biens culturels Income Tax Act - Section 248 - Subsection 248(32) s. 248(32) inapplicable where contract of sale rather than deed of gift
Income Tax Act - Section 118.1 - Subsection 118.1(1) - Total Cultural Gifts - Paragraph (a) no donation of an object where donation of an interest therein

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