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11 June 1992 Income Tax Severed Letter 2M01270- Foreing Exchange Gains and Losses- Calculating Currency Unedited CRA Tags 95(2)(f)(ii), Reg. 5907(6) 1992 Corporate Management Tax Conference FOREIGN EXCHANGE GAINS AND LOSSES Question 7 For purposes of subparagraph 95(2)(f)(ii) and Regulation 5907(6), under what circumstances will a particular currency be considered "reasonable in the circumstances"? ... Where a particular currency has become the generally accepted currency for conducting business in a country, such currency may be considered "reasonable in the circumstances", notwithstanding that some other currency is the Document Disclosed Pursuant to The Access To Information Act Document Divulgué en vertu de la loi sur l'accès à l'information official currency of that country. As well, the currency that is used for income tax purposes in the foreign jurisdiction would normally be considered "reasonable in the circumstances". ...

Our Comments In our opinion, a trust created in accordance with a will of an individual is considered as a trust created upon and in consequence of the death of the individual even though the properties are not received until a specified future date, e.g., until the death of a life tenant. If all the properties in the trust were contributed from the estate, the trust is considered as a testamentary trust, the settlor is considered to be the deceased individual and the ear end is determined in accordance with subsection 104(23) of the Act. ...

In the first hypothetical situation out lined above each of the four Canadian resident shareholders could have an equity percentage in Corporation A which was not less than 10% and therefore, assuming none of these shareholders was a non-resident-owned investment corporation, Corporation A would be considered a foreign affiliate of each of these shareholders. Corporation A would also be considered to be a controlled foreign affiliate of each of these shareholders pursuant to either of subparagraphs 95(1)(a)(ii) or (iii) of the Act. In the second hypothetical situation outlined above, Corporation B would have an equity percentage of 49% in Corporation A and therefore, assuming Corporation B was not a non-resident-owned investment corporation, Corporation A would be considered a foreign affiliate of Corporation B. ...

., will the amount of the deduction be considered as a prescribed benefit for the purposes of regulation 231(6) of the Income Tax Regulations? b)     If a limited partner of a limited partnership is entitled to exchange his partnership unit for partnership property that has a fair market value equal to the fair market value of the partnership unit at the time of disposition, will the fair market value of the partnership property so distributed be considered a prescribed benefit for the purposes of regulation 231(6) of the Income Tax Regulations? DEPARTMENT'S POSITION a)     Where shares issued by a corporation that are eligible as qualifying investments in RRSP, RRIF and DPSP are contributed to and held in such registered deferred income plans by a taxpayer, those shares will be considered "prescribed property" for the purposes of subsection 231(7) of the Regulations and hence will be excluded from the definition of "tax shelter" in subsection 237.1(1) of the Act. b)     The determination of whether a limited partner's ability to exchange his partnership unit for partnership property that has a fair market value equal to the fair market value of the partnership unit at the time of disposition would have the effect of reducing the impact of any loss he may sustain is a determination that can only be made based on the facts of a particular situation. ...

Is equipment considered to be "available for use" for purposes of draft subsection 13(27) of the Income Tax Act (the "Act") in the following two situations?            ... In the first situation, the equipment could be considered to become "available for use" in the particular taxation year by virtue of draft paragraph 13(27)(a) of the Act since the equipment was in fact used for the first time in that year in accordance with its intended purpose. In the second situation, the equipment could be considered to become "available for use" in the particular taxation year by virtue of draft paragraph 13(27)(d) of the Act since the time that it was capable of being used for its intended purpose preceded the time when it was first used. ...

Since the situation described in your letter appears to involve actual taxpayers and proposed transactions, that could best be considered by way of an advance income tax ruling request, we are unable to comment on the specifics of the series of transactions described therein. ... Further, in order for an expenditure or transfer of property to be considered a gift, it must be made without conditions, from detached and disinterested generosity, out of affection, respect, or charity or like impulses, and not from the constraining forces of any moral or legal duty. The Department's position is that a donation made by a vendor must be separate from and unrelated to the sale in order to be considered as a gift (See paragraph 14 of Interpretation Bulletin IT-110R2 which discusses a similar transaction involving a donation by a purchaser). ...

The 1979 review of these payments concluded that they would not be considered a taxable benefit under paragraph 6(1)(a) of the Income Tax Act.  ... In converting the reimbursement into an allowance the provisions of paragraph 6(1)(b) of the Act must be considered.  ... Subparagraph 6(1)(b)(iii) of the Act provides for an exclusion from income for employees, such as those in question, of allowances considered to be "representation or special allowances" paid to the employee while he/she was in service outside Canada.  ...

It follows therefore, that the closer a repayment schedule resembles one that is available in normal commercial practice, the more likely it is that it will be considered a reasonable time frame for repayment.  While we recognize that non-interest bearing loans are not available commercially, the terms of repayment for a non-interest bearing loan should be based on the same factors that might be considered in a commercial transaction (i.e. security of the loan, ability of the creditor to repay the loan, etc.).  ... However, provided that the terms and conditions of a loan are otherwise reasonable in the circumstances and the borrower can reasonably be expected to be able to make the payments as they become due without refinancing, a repayment schedule such as that you describe would likely be considered reasonable. ...

17 August 1992 External T.I. 9220975 F- Indians And RRSP'S Unedited CRA Tags 81(1)(a), 146(1) registered retirement savings plan   922097 24(1) Glen Thornley   (613) 957-2101 Attention:  19(1) August 17, 1992 Dear Sirs: Re: Registered Retirement Savings Plan ("RRSP") and Status Indians This is in reply to your letter of June 29, 1992 asking whether payments received out of an RRSP by a Status Indian are considered exempt income to the Status Income. ... In this respect payments under an RRSP are considered sourced at the head office of the financial institution that issued them and are, therefor, not sourced on a reserve unless, of course, the head office of the financial institution (credit union, trust company, etc) happens to be situated on a reserve.  Where this is the case the RRSP payments would be considered as personal property of an Indian on a reserve and exempt from taxation by virtue of section 87 of the Indian Act and paragraph 81(1)(a) of the Income Tax Act. ...

Humenuk      (613) 957-2134 Attention:  19(1) March 31, 1992 Dear Sirs: Re:  Physical Fitness Facilities for Employees We are replying to your letter of January 28, 1992 in which you ask whether a reimbursement for the cost of membership in a fitness club by an employer is considered to be a taxable benefit to the employees.      24(1) Notwithstanding the many benefits to the employer mentioned in your letter, it is our view that it is the employee who derives the primary benefit from the use of physical fitness facilities.  ... If the fees paid are for the use of the facility only, and are not membership fees or dues as described in paragraph 18(1)(l) of the Act, the employee would generally not be considered to be in receipt of a taxable benefit.  Where membership fees or dues are paid by the employer, such payment or reimbursement will be considered to be a taxable benefit to the employee unless the employer can establish that membership in the facility is primarily to the employer's advantage.  ...