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Position: Yes Reasons: All permanent establishments in Canada of a corporation are considered to be in a province. 971855 XXXXXXXXXX Michèle Trotier Attention: XXXXXXXXXX July 11, 1997 Dear Sirs: Re: Reference No. 951622 Single Purpose Corporation- Large Corporation Tax This is a follow-up to a recent telephone conversation between Michèle Trotier of our Directorate and XXXXXXXXXX of your firm enquiring about the Part 1.3 tax implications with respect to a single purpose corporation. ... We would note that in determining an amount under Part IV of the Income Tax Regulations for purposes of item B of the formula in section 8601 of the Income Tax Regulations all permanent establishments in Canada of a corporation are considered to be in a province. ...

You have asked that we confirm that where a retired partner has an income interest in a partnership pursuant to subsection 96(1.1) of the Act, that interest can be considered "inventory" and therefore eligible for "rollover" treatment, pursuant to subsection 97(2) of the Act, upon readmission to the partnership. ... It is therefore our conclusion that the subsection 96(1.1) of the Act continuing income interest in a partnership cannot be considered inventory for purposes of subsection 97(2) of the Act. ...

Our Comments It is the Department’s view that the cost of perennial plants, orchard trees and nut trees purchased would, on the initial establishment of an orchard, be considered to be capital expenditures that would be added to the cost of farmland. The cost of replacement plants and trees would be considered deductible expenses. ...

Position: no. not considered inventory Reasons: Reading of the law. XXXXXXXXXX 981290 S. Tevlin Attention: XXXXXXXXXX July 29, 1998 Dear Sirs: Re: Subsection 97(2) of the Income Tax Act We are writing in response to your letter dated May 13, 1998 wherein you asked that we reconsider the position, as described in our letter 980186 dated February 10, 1998, that a subsection 96(1.1) “right” is not to be considered inventory to a retired partner. ...

Principal Issues: Is vacation pay or banked sick leave considered a bonus for purposes of the Act? ... We confirm, as expressed in our letter dated June 3, 1998 and our telephone conversation of June 23, 1998 (XXXXXXXXXX/Sarazin), that vacation pay and sick credits will not be considered a bonus for the purposes of proposed subsection 100(3.2) of the Regulations. ...

Generally, gains or losses on transactions of an individual trading securities on a stock market would be on account of capital unless the transactions are determined to be carried on in the same way as a trader or dealer in securities, or there is an isolated transaction that may be considered an adventure or concern in the nature of trade. ... Paragraphs 10 to 12 of Interpretation Bulletin, IT-479R, Transactions in Securities (copy enclosed for your information) discuss some of the factors that may be considered in determining whether the transactions are on account of income. ...

Reasons FOR POSITION TAKEN: Back-to-back loans may constitute an avoidance transaction and may be considered to be a misuse of subparagraph 212(1)(b)(vii). ... If it is an avoidance transaction, it will be considered to be a misuse of subparagraph 212(1)(b)(vii) and will be subject to subsection 245(2). ...

Will Company A's proportionate share of production revenue applicable to it by the partnership be considered to be income under, for example, clause 66.7(3)(b)(i)(C) of the Act which is eligible for successor pool deductions? Department's Position Company A's proportionate share of the partnership's production revenue from a particular transferred resource property would be considered as income attributable to production from that particular property for the purpose of clause 66.7(3)(b)(i)(C) and subclauses 66.7(4)(b)(i)(A)(II) and (5)(b)(i)(A)(II) of the Act. ...

Kuss Attention: XXXXXXXXXX October 25, 1994 Dear Sirs: Re: Overseas Employment Tax Credit This is in reply to your letter dated February 25, 1994 requesting our views whether certain activities would be considered "qualifying activities" for purposes of the overseas employment tax credit under subsection 122.3(1). ... You have asked whether such activities would be considered a "prescribed activity" referred to in clause 122.3(1)(b)(ii)(C). ...

Principal Issues: Income for the year from the mine Position TAKEN: Negative cumulative Canadian development expense caused by the sale of an interest in the Canadian resource property that is part of the same mine as Class 41 property is not presently considered to be income for the year from the mine. Reasons FOR POSITION TAKEN: XXXXXXXXXX 5-942511 Attention: XXXXXXXXXX October 24, 1994 Dear Sirs: Re: Income From the Mine Further to our letter of August 29, 1994 we are writing to respond to your question regarding whether a negative cumulative Canadian development expense ("CCDE") balance would be considered as income from a mine for the purposes of paragraphs 1100(1)(y) and (ya) of the Income Tax Regulations. ...