Search - considered

21 February 2012 External T.I. 2011-0417471E5 F- Changement d'usage- paragraphe 45(3)-- summary under Property Summary Under Tax Topics- Income Tax Act- Section 248- Subsection 248(1)- Property immovable (including a duplex used 2 different ways) is considered a single property unless subdivided A taxpayer inhabited as a principal residence a unit of a taxpayer-owned duplex and integrates that unit, through major renovations, with the other unit in the duplex that was, before those renovations, rented to third parties. CRA indicated that “An immovable is normally considered to be a single property unless it is legally subdivided into two or more separate properties,” so that, in this situation, the partial change-in-use rule in s. 45(1)(c) would be considered to apply. ...

Would LP1, LP2 and LP3 be considered to be dealing at arm’s length with Canco for purposes of Art. 11, subpara. 3 (c) of the Treaty? ... Pursuant to the Interpretative Protocol, whether persons are considered to be dealing at arm's length with each other… is determined by subsection 251(1).... [W]e will consider GP Co to control Holdco and Canco. … Folio S1-F5-C1 [states] “when a partner is not in a position to control a partnership and that partner has little or no say in directing the operations of the partnership, it is generally recognized that the partner is dealing at arm's length with the partnership.” … By analogy, you reason that a partner who is considered to be dealing at arm’s length with a partnership should also be considered to be dealing at arm’s length with the corporation controlled by the partnership. ...

Issue 1 Would LP2 and LP3 be considered to have “indirect control” over the voting power of Holdco, the shares of which are held by UK LP, for purposes of Art. 10, subpara. 2(a)? Issue 2 Would LP1 and LP3 be considered to own indirectly shares of Holdco for purposes of Art. 10, para. 3? ... …LP1 and LP3 will be considered to own indirectly the shares of Holdco and accordingly Holdco’s capital in proportion to their partnership interests in UK LP. ...

After noting that under the jurisprudence, “for an expense to have been incurred for the purpose of determining the existence, location, extent or quality of an accumulation of petroleum or natural gas, there would have to be a connection between that expense and the actual exploration work,” CRA turned to the specific expenses and stated: Capacity Payments would generally be considered to satisfy the Purpose Test [in para. (f)] on the basis that they are incurred in order to secure access to and explore the Property and therefore are connected to the actual exploration work. … Ongoing consultations expenses similar to those described above would appear to be in respect of the exploration process only and therefore would generally be considered to be CEE. … [T]argeted environmental assessments, such as biodiversity and species at risk, that are conducted in conjunction with exploration activities would generally be considered to be CEE. … [E]xpenses for legally documenting arrangements agreed to with the leaders of a community during community consultations would generally be considered to meet the Purpose Test and therefore would be considered to be CEE, to the extent that such legal documentation relates to the exploration process.... ...

CRA also provided general comments on the meaning of "substantial operation": The ordinary meaning of this term has been considered in Canadian domestic case law. In particular, Canadian courts considered the meaning of the term "substantial" in (SCC) Manning Timber Products Ltd. v MNR [52 DTC 1148]. ... The CRA has previously expressed its views on the factors considered in determining whether an active trade or business is "substantial" for the purposes of Article XXIX-A(3) of the Canada-United States Tax Convention. ...

Would NRco be considered to have thereby disposed of taxable Canadian property? CRA stated: [P]aragraph 40(3.1)(b) deems NRco to have disposed of the interest in P only for the purpose of section 110.6…[and] NRCo would not be considered to have disposed of its interest in P for any other purpose including for the purpose of paragraph 2(3)(c) or clause 150(1)(a)(i)(D)…. However, NRco would be considered to have a taxable capital gain for the purposes of clause 150(1)(a)(i)(C) of the Act and would therefore be required to file an income tax return in Canada. ...

Before concluding that the Association likely would be considered a trade union for purposes of s. 8(1)(i)(iv), CRA stated: [A]n association need not be certified as a trade union to be considered a trade union for [such] purposes…[and] an association which negotiates collectively with an employer for improvements in the members' working conditions is generally considered to be a trade union for [such] purposes…. ...

7 August 2014 External T.I. 2014-0528841E5 F- Changement à une résidence principale-- summary under Paragraph 45(1)(c) Summary Under Tax Topics- Income Tax Act- Section 45- Subsection 45(1)- Paragraph 45(1)(c) addition of a door to an exterior wall could be considered a structural change triggering a change of use A taxpayer renovates the basement of his home by adding a separate door, permitting access from the outside, in order to establish offices there of a wholly-owned corporation. ... CRA responded: Generally… the CRA [does] not … apply the deemed dispositions rule, where the property is considered to retain its primary residence character, no capital cost allowance (CCA) was claimed … and no structural change was made to the property. … [T]here is a structural change when a taxpayer makes changes to a property to make it more suitable for rental or use in the course of carrying on a business. …[T]he expansion or addition of an opening to an exterior wall of a building could be considered a structural change. ...

23 December 2013 External T.I. 2013-0505481E5 F- Application des paragraphes 6(6) et 110.7(1)-- summary under Subsection 6(6) Summary Under Tax Topics- Income Tax Act- Section 6- Subsection 6(6) Treasury Board rates considered to be reasonable A taxpayer ("Mr. ... Given that the travel allowance rates established by the Treasury Board of Canada Secretariat ("TBCS") are $89.95 for the 30 first days and $67.40 for the subsequent days, will $70 be considered reasonable? ... A are used to cover the additional costs that he incurs and that these amounts do not allow him to be enriched, we would be of the view that they would be considered reasonable for the purposes of paragraph 6(6) and would be excluded from the calculation of his income. ...

7 March 2016 External T.I. 2015-0608211E5- Assignment of right to purchase-- summary under Paragraph (f) Summary Under Tax Topics- Income Tax Act- Section 248- Subsection 248(1)- Taxable Canadian Property- Paragraph (f) assigning right to purchase Canadian real estate is disposing of tcp Would an assignment to a trust by a non-resident person of a right to purchase a Canadian apartment unit be considered a disposition of taxable Canadian property? ... Based on this definition, the right to purchase an apartment should be considered an option for purposes of the Act. …“[A]ssignment” is a form of “transfer”, and therefore, provided all other conditions of the definition are met, the assignment of the right to purchase the apartment to a trust would be considered a disposition. ...