Principal Issues: Impact of an amalgamation of corporations or the winding-up of a corporation on the calculation of the CDA.

Position: See below.

Reasons: See below.

9 OCTOBER 2015 FEDERAL TAX ROUNDTABLE
2015 APFF CONFERENCE

Question 6 Impact of an amalgamation or winding-up on the calculation of the capital dividend account ("CDA")

In a structure such as this:

Principal Issues: 1) Can the CRA confirm that the Additional Subsidized Childcare Contribution in Quebec is deductible in computing an individual's income; 2) If yes, can the CRA confirm in which year an individual may deduct this additional contribution; 3) What documents should an individual provide to justify the deduction claimed with regard to the additional contribution on his/her income tax return?

Principal Issues: When applying ss. 18(3.1), will the CRA follow the reasoning adopted in the Janota case?

Position: General comments. It is primarily a question of fact whether certain expenses must be capitalized under ss. 18(3.1).

Principal Issues: (1) Whether CRA’s comments on the meaning of "actively engaged on a regular and continuous basis" expressed in the context of the business of farming (IT-349R3 and IT-268R4) may apply to interpret the meaning of "actively engaged on a regular basis" used in the definition of "split income" in subsection 120.4(1) of the Act. (2) Whether a real estate trust managed by an entity dealing at arm’s length with the specified individual is subject to the kiddie tax.

Position: (1) General comments provided. (2) General comments provided.

Principal Issues: Can the remaining balance of financing fees be written off in a taxation year where the borrowing to which they relate is extinguished, in four different scenarios?

Position: Only in the first scenario.

Reasons: Scenarios two to four would all be part of a series of borrowings or other transactions and repayments.

9 OCTOBER 2015 FEDERAL TAX ROUNDTABLE
2015 APFF CONFERENCE

Question 1

Principal Issues: Is a taxpayer considered to be performing duties of a temporary nature for the purpose of subparagraph 6(6)(a)(i)?

Position: Yes until XXXXXXXXXX.

Reasons: Question of fact.

December 15, 2014

Western Quebec Tax Services Office
Tax Rulings Directorate
Section I
Business and Employment Income
For the attention of Sylvie Guérette, I. Landry, M. Fisc.
Trust Accounts Compliance Officer

2014-054412

Special work site- temporary work

Principal Issues: 1. Does the payment qualify as a royalty prepayment ? 2. Should the payment be included into income as per paragraph 12(1)(a) or subsection 9(1) ?

Position: 1. Question of fact. 2. Both provisions (whether 12(1)(a) or 9(1)) could apply.

Principal Issues: In a particular situation, Aco holds all of the issued and outstanding shares of the capital stock of Bco. Both corporations are TCCs and CCPCs. On January 1, 20X0 Aco becomes indebted to Bco in the amount of US$1,000,000. On January 1, 20X0, the US dollar is at par with the Canadian dollar. On January 1, 20X5, control of Aco (and of Bco) is acquired. No election is made under subsection 256(9) with respect of the acquisition of control. The exchange rate in effect immediately before the acquisition of control is US$1 = CAN$1.10.

Principal Issues: 1) Whether a family season ski and snowboard pass offered by an employer to his/her employees is a taxable benefit in a given situation? 2) If so, can the value of the family season ski pass be established at cost for the employer?

Position: 1) Question of fact. 2) No.