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17 May 1990 Income Tax Severed Letter ACC9098- Remission of Tax Return signed copy to: YS 9341016 Technical Review Section 9352002 Technical Publications Division Room 1016, Cumberland Place May 17, 1990 19(1) I am replying to your letter of December 5, 1989, with respect to the tax problems encountered by your constituent, 19(1) I apologize for the length of time taken to complete 19(1) review that was necessary in this matter. 19(1) case was thoroughly reviewed and considered with the guidelines for recommending remissions. ...

Under the provisions of subsection 20(2.1) of the Act, interest on a policy loan is only considered to be "interest" for the purposes of paragraphs 20(1)(c) and (d) of the Act, if it is paid in the year and is not added to the adjusted cost basis to the taxpayer of his interest in the policy. ...

In our opinion this same issue must also be considered with respect to the power to appoint or replace trustees or any other provision relevant to a transaction or series of transactions undertaken for the purpose of creating a trust. ...

Our Comments It is the Department's position that short sale security transactions are considered an adventure in the nature of trade and as a result are of an income nature. ...

There is no provision in the Act that would exempt the payment from tax, nor could it be considered as a reimbursement of a necessary relocation expense. ...

XXXX As stated in paragraph 9 of IT-441 it is our position that the clause "day of its first commercial use" in subsection 1104(2) of the Regulations normally refers to the first day of commercial, theatrical or television showing of a film or tape, and the showing of a "sneak preview" or similar promotional use of the film in a limited market and limited period for market testing purposes will normally not be considered to represent first commercial use. ...

Since we are not familiar with 19(1) situation, we do not know whether this case should be considered as an "extreme hardship" case (TOM 2263.22(2)(A)) or as a "financial setback" case (TOM 2263.22(2)(C)). ...

Benefits or privileges which remain in the plan, however, such as bonus interest on the RRSP or cash deposited into the RRSP are not considered to be granted to the annuitant within the meaning of the Regulation, and would therefore not cause the investment to become non-qualified. ...

It is our opinion that the live broadcast itself would not be considered to be a capital property and consequently it is not necessary to deal with the question of capital cost allowance in that respect. ...

Generally, where a particular investment is capable of reasonably prompt conversion into cash and can easily be traded because a ready group of buyers exists and there are no legal or other impediments to the sale, the investment could be considered a marketable security. ...