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Would any portion of the payments made by BCO to ACO for ACO's services be considered exploration and development overhead expense (CEDOE) so that such portion would be excluded from Canadian exploration expense (CEE) pursuant to ITA s. 66(12.6)(b) and Reg. 1206(4.2) and, thus, could not be renounced by BCO to its flow-through share investors? ... Regarding whether certain non-insurable risks and liabilities (e.g., losses if the survey aircraft crashed) could be considered to be “costs incurred” for these purpose, CRA noted that the “Courts have held that a taxpayer will not be considered to have incurred an expense unless and until the taxpayer has an absolute and unconditional legal obligation to pay an amount” and indicated that It seemed unlikely that such amounts could so qualify. ...

CRA considered that this payment would be a retiring allowance (and thereby presumably excluded from CPP contribution requirements) except for the amount paid in excess of the equivalent of 20 days, which generally would be considered to be employment income given that this excess, in the absence of the termination, would have been paid out to the employee at the end of the year. ...

In order for the taxpayer to be considered to have undertaken the activity in pursuit of profit, i.e. to be considered to be carrying on business, the artistic or literary endeavours must be carried on in a sufficiently commercial or business-like manner. ... A gift of art by a visual artist will be considered to be on income account if the artist created the work with the intention of selling it, but instead donated it- whereas gifts of items such as original manuscripts, letters, memoranda, or similar papers would generally be considered to be of capital property. ...

For tax purposes, a bare trust is considered a non-entity in the sense that a beneficiary as principal, is considered to deal directly with property through the trustee as agent or nominee. ...

Turning to the 12-month test therein, CRA indicated that the two work segments might very well be considered as a single unit, in which case the non-resident would be considered to have a Canadian permanent establishment if the work on the first segment commenced more than 12 months before the completion of the second segment. ...

In the situation where the will bequeathed the Property to a testamentary trust, CRA considered that: [T]o the extent that the testamentary trust is, under applicable private law, a beneficiary of the estate at the time of the transfer or distribution of the Property by the estate, the testamentary trust could be considered a beneficiary or a person beneficially interested in the estate of the deceased individual for the purposes of subsection 70(3). ...

8 May 2018- 12:16am CRA considers that a s. 16.1 election does not cause a leased property to be a capital property Email this Content The operation of the ETA input tax credit rules can turn on whether the registrant is considered to have acquired a “capital property,” largely as defined for ITA purposes. ... CRA noted the general principle in this regard that generally a registrant is not considered to have acquired property for ITC purposes unless ownership of the property has been transferred to it. ...

Headquarters also noted that for s. 162(7) penalty purposes, “an information return that is missing substantial information will be considered invalid and, therefore, will not be considered to have been filed.” ...

9 March 2020- 12:41am CRA indicates that a gross negligence penalty generally should not apply to a genuine misinterpretation of the ETA Email this Content Respecting whether the ETA gross negligence applied where there has been a failure to report taxable revenue, CRA indicated that “Usually, gross negligence penalties are not assessed where it is considered that there was a genuine misinterpretation of the ETA on the part of the registrant and it is reasonable to assume that the registrant did not know whether a particular supply was a taxable supply” and that “Generally speaking, no penalty will be assessed where it appears that the registrant was confused about the reporting of an amount and it is the first time a penalty is being considered.” ...

CRA considered that on this basis “a disposition of an interest in a related segregated fund trust will generally result in capital gains treatment” so that “the interest may be considered a capital property, and accordingly, an eligible property under paragraph 85(1.1)(a) of the Act for purposes of subsection 85(1).” ...