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26 September 1997 External T.I. 9722915- ROYALTY INCOME AS ACTIVE BUSINESS INCOME-- summary under Specified Investment Business Summary Under Tax Topics- Income Tax Act- Section 125- Subsection 125(7)- Specified Investment Business income from copyrighted music "If a company is in the business of composing music, the income it earns with respect to its copyrighted music would generally be considered active business income.... ...

4 December 1997 External T.I. 9726425- MIC'S AND REAL ESTATE-- summary under Subsection 130.1(6) Summary Under Tax Topics- Income Tax Act- Section 130.1- Subsection 130.1(6) development or ancillary rental services are not part of investing undertaking "Where a corporation otherwise would have met all the conditions outlined in subsection 130.1(6) of the Act acquires real property either for rent or for development, the corporation would not be considered a MIC since the condition that the corporation must not manage or develop real property, as outlined above, would not be met. ...

Where a marina having foreshore water leases is required under the terms of the lease to own land contiguous with the foreshore lease, such land would be considered to be used in an active business because it is a condition precedent to the operation of the Marina. ...

The lender would be considered to have an equity interest if it was entitled to participation payments computed as a percentage of profits from the production with no cap, and there was clearly no connection between the estimated participation payments and the fair market value interest rate. ...

However, if there is a requirement for any further negotiations with, or the concurrence or consent of, the grantor of the licence, the new period would not be considered to be an automatic renewal but rather it could be a separate property eligible for inclusion in Class 14. ...

RC also noted that "a housing loan amortized over 25 years, and renewable every five years, at a prescribed rate of interest would be considered to be consistent with normal commercial practice.... ...

CRA considered that “the exception in 74.5(2) of the Act would cease to be applicable,” so that the attribution rules would commence applying, given that “the proceeds of the [second] loan are used to repay the demand promissory note (i.e., the proceeds would never generate any income or result in a gain),” ...

28 July 1994 External T.I. 9416395- DENIED LOSS ADDED TO ACB-- summary under Subsection 85(4) Summary Under Tax Topics- Income Tax Act- Section 85- Subsection 85(4) With respect to whether ss.85(4)(a) and 53(1)(f.1) would apply to the transfer by a corporation and its subsidiary of their respective undivided interest in a property to another corporation where both the transferor corporations and the transferee corporation were owned by several unrelated entities with no single shareholder holding an interest greater than 40% and each shareholder owning the same interest in both the transferor group of corporations and the transferee corporation, RC stated that: "Two or more persons will be considered to be a group which controls a corporation where there is evidence they have a common link or interest or that they act together to control the corporation. ...

Will such exchange be considered a disposition? CRA stated: Subject to subsection 51(4) of the Act, section 51 will apply to any situation where a share of the capital stock of a corporation is acquired by a taxpayer in exchange for a capital property that is another share of the particular corporation and no other consideration is received for the old shares. ...

20 December 1994 External T.I. 9421435- ROYALTIES AND CANADA-UK INCOME TAX CONVENTION-- summary under Article 12 Summary Under Tax Topics- Treaties- Income Tax Conventions- Article 12 With respect to a situation where a Canadian company pays royalties to a resident of the U.K. for the right to reproduce certain movies, television series and children's programs in video format with the resulting videos being sold to distributors who would, in turn, rent or sell the videos to the public for private use, RC stated "that if the payments are computed on the basis of the number of times a video movie is shown and/or viewed rather than on the number of copies of the video produced, the payments would not fall within the exemption in paragraph 3 of Article 12 as they would not be considered to be in respect of the production or reproduction of the work". ...