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8 January 2025 Internal T.I. 2024-1032871I7- Payee for purposes of paragraph 153(1)-- summary under Paragraph 56(1)(x) Summary Under Tax Topics- Income Tax Act- Section 56- Subsection 56(1)- Paragraph 56(1)(x) RCA payment made to ex-spouse of taxpayer nonetheless was income to the taxpayer The Directorate was asked regarding the application of s. 153(1) to a distribution out of a retirement compensation arrangement (“RCA”) that could reasonably be considered to have been received, in respect of an office or employment of the taxpayer (the “Taxpayer”), by a former spouse of the taxpayer pursuant toa court order or a separation agreement (the “RCA Payment”). The Directorate indicated that s. 56(1)(x) would apply to require the inclusion of the RCA Payment in the taxpayer’s income on the basis that such payment could reasonably be considered to have been received in respect of the office or employment of the taxpayer; and that, by virtue of s. 56(1)(z)(ii), no amount of the payment would be included in the income of the taxpayer’s former spouse. ...

" After further indicating that “the notion of ‘ordinarily reside’ relates more to everyday life than to the permanent nature of the situation,” CRA stated: If it is established, on the facts, that the employee ordinarily resided at each of Location 1, Location 2 and Location 3, moving from Location 1 to Location 2, and then from Location 2 to Location 3, could each be considered as an "eligible relocation" if all other conditions are met. Expenses related to the sale of the residence at Location 1 at the time of the move from Location 2 to Location 3 would not be deductible in computing the taxpayer's income because the residence at Location 1 would no longer be considered to be the old residence during the eligible relocation from Location 2 to Location 3. … If it is instead established on the facts that the taxpayer did not ordinarily reside at Location 2 before ordinarily residing at Location 3…[e]xpenses related to the sale of the residence at Location 1 would be considered expenses of the move from Location 1 to Location 3…. ...

Regarding whether the retroactive periodic support amounts would be deductible, the Directorate indicated that although the order, pursuant to the court’s legislative authority to do so, made the amounts payable retroactively on a periodic basis during the stipulated period (2013 to 2018), ‘payments made before the date of a court order or written agreement cannot be considered to be paid under the order or agreement.” However, after noting that s. 60.1(3) provides that “payments made in the year of the order or agreement or in the preceding year are deemed to be paid under the order or agreement if the document explicitly refers to the payments that have been made and states that they are considered to have been made under the order or agreement,” the Directorate indicated that, here, s. 60.1(3) would deem the 2028 “Order to have been made as of the first payment that was made in 2017” so that “any of the support payments made from the first payment that was made in 2017 to the date of the Order would be deemed to be made under the Order and could be considered ‘support amounts’.” ...

The Directorate indicated: In the case of an employee assigned to a particular region and who worked at different factories in that region while staying at the same apartment in that region, the assignment at each factory would not be considered to be a separate assignment for purposes of determining whether the nature of the work was temporary. However, if the employee was assigned to a region for a certain period of time, then to another region such that the employee was required to settle in terms of board and lodging in that other region, each region could be considered separately to determine the temporary nature of the work. ... A two-month training period at a different site than the special work site would not cause an assignment of 24 months at the special work site to be considered non-temporary. ...

CRA was of the view that this post-judgment interest was not deductible interest as the judgment was "neither a second loan nor a continuation of the initial loan," and "a taxpayer, who makes a payment under a guarantee of indebtedness of a corporation, will generally be considered to have acquired the rights of the creditor in respect of the indebtedness at the time of payment," so that the "Judgment amount to be paid by the Taxpayers as guarantors, is not considered to be a borrowing of the Taxpayers. ...

The Directorate stated: Because the activities of USco are critical to the profitability of each Landco... the activities of each Landco would for that reason be considered as being 'directly related' to the activities of USco for the purposes of the test in clause 95(2)(a)(i)(A).... ... Therefore, if the investment business income of one of the Landcos was earned by USco it would be considered to be derived from a separate business (investment business) apart from its management service business, it would not qualify as active business income of USco and the test in clause 95(2)(a)(i)(B) would not be satisfied. ...

15 September 2015 Internal T.I. 2015-0572771I7- T1135- Normal Reassessment Period-- summary under Subsection 152(4) Summary Under Tax Topics- Income Tax Act- Section 152- Subsection 152(4) unlike s. 216 returns, the assessment of s. 162(7) penalties is subject to the same normal reassessment period as for the Part I return Is the normal reassessment period for a T1135 considered separately from that of the return of income to which it relates? CRA stated: [A]n assessment…for amounts assessable under subsection 216(1) is considered separate and distinct from an assessment of other sources of income taxable under Part I. ...

The Directorate confirmed that 1999-0009295 (respecting the availability of a reserve under s. 40(1)(a)(iii) to a capital gain under s. 55(2) where the capital gain arose on the receipt of a promissory note made as a conditional payment) still was valid. stating: [A] shareholder would be entitled to the reserve under subparagraph 40(1)(a)(iii) in such a context if the promissory note is considered to have been accepted as evidence of or security for the balance payable of the purchase price of the shares. On the other hand, in a situation where the promissory note is considered as "absolute payment" of the debt, the shareholder would not be entitled to such reserve. ...

18 September 2013 Internal T.I. 2013-0487871I7- Filing Due Date for Elections-- summary under Subsection 220(3.1) Summary Under Tax Topics- Income Tax Act- Section 220- Subsection 220(3.1) election filed with late return Regarding elections that are required to be filed with the taxpayer's return, CRA noted that Rezek established that "where an election is required to be filed in the taxpayer's return of income for the year, such an election would not be considered late-filed if the election was filed with a return of income for that year that was late-filed," and then stated: [F]or the purpose of calculating the late-filing penalty under subsection 220(3.5), the date the election is required to be filed is the date that the return of income for the year was actually filed and not the filing-due date for the particular return of income for the year. Therefore, where an election that is required to be filed in the taxpayer's return of income for the year is not filed with that return of income but rather is filed later, that election, if accepted by the Minister, is technically considered to be late-filed, even if the election is filed before the filing due date of the particular return of income. ...

18 September 2013 Internal T.I. 2013-0487871I7- Filing Due Date for Elections-- summary under Subsection 39(4) Summary Under Tax Topics- Income Tax Act- Section 39- Subsection 39(4) Regarding elections that are required to be filed with the taxpayer's return, CRA noted that Rezek established that "where an election is required to be filed in the taxpayer's return of income for the year, such an election would not be considered late-filed if the election was filed with a return of income for that year that was late-filed," and then stated: [F]or the purpose of calculating the late-filing penalty under subsection 220(3.5), the date the election is required to be filed is the date that the return of income for the year was actually filed and not the filing-due date for the particular return of income for the year. Therefore, where an election that is required to be filed in the taxpayer's return of income for the year is not filed with that return of income but rather is filed later, that election, if accepted by the Minister, is technically considered to be late-filed, even if the election is filed before the filing due date of the particular return of income. ...