Search - considered

For a fitness club membership it depends on whether the provision of the membership can be considered primarily for the employer's advantage. 2006-018740 XXXXXXXXXX Joy Bertram, CGA, CPA(vt) February 19, 2007 Dear XXXXXXXXXX: Re: Taxable Status of Free Parking and Fitness Club Memberships We are writing in response to your fax of May 19, 2006, wherein you requested our opinion on the taxable status of a flexible benefits program that provides employees with free parking and fitness club memberships. ... As a guideline, if an employee is required to use his or her vehicle 3 or more days on a weekly basis for employment-related travel and requires the parking space for this purpose, the parking space would be considered to be used regularly for employment-related reasons and therefore, the employee would not be in receipt of a taxable benefit. ... However, if it is clearly to the employer's advantage for an employee to be a member of a club, the employee will not be considered to have received a taxable benefit. ...

Reasons: An individual who is a volunteer is generally considered to be in a position of "employment" and payments received from a volunteer organization must be determined with regard to the provisions of the Act that tax employment income and benefits. ... An individual who is a volunteer is generally considered to be in a position of "employment" under the Income Tax Act (the "Act"). ... Subsection 5(1) of the Act includes in an individual's employment income amounts received in the year that are considered salary, wages and other remuneration, and subsection 6(1) will include in income certain employment benefits received or enjoyed in the year. ...

Thus, for purposes of the QFP definition, the farmland was property last acquired after June 17, 1987, and the post-June 17, 1987, rules of the definition of QFP would have to be met before the farmland can be considered QFP upon a subsequent disposition. ... Therefore, in our opinion, if the capital gains election is filed in respect of QFP, the property will be considered to have been "last acquired" after June 17, 1987. ... Accordingly, in determining whether such property would be considered QFP upon a subsequent disposition, the taxpayer would be required to meet the post-June 17, 1987, gross revenue and use tests outlined in subparagraph 110.6(1)(a)(vi) of the Definition. ...

Our Comments: Where an individual (the "Individual") has transferred or loaned property, either directly or indirectly, by means of a trust or by any other means whatever, to a corporation and one of the main purposes of the transfer or loan may reasonably be considered to reduce the income of the Individual and to benefit, either directly or indirectly, a person who is a designated person in respect of that Individual, the rules in subsection 74.4(2) of the Act must be considered to determine what amount of deemed interest, if any, must be included in the Individual's income for each taxation year on the "outstanding amount" as defined by subsection 74.4(3). ... It is a question of fact as to whether one of main purposes of a transfer or loan of property may reasonably be considered to be to benefit, either directly or indirectly, a designated person under subsection 74.4(2). ...

You have requested our opinion as to whether paragraph 5 of Article 4 of the Convention would be applicable such that the individual would not be considered a resident of Switzerland for purposes of the Convention. ... The following comments are restricted to a consideration of paragraph 5 of Article 4 of the Convention and should not be construed as signifying that the CRA has accepted that an individual who chooses to pay tax under the Swiss lump-sum basis of taxation would be considered a resident of Switzerland pursuant to paragraph 1 of Article 4 of the Convention. In the case of an individual who: a) is a resident alien of Switzerland; b) elects to pay tax under the Swiss lump-sum basis of taxation; and c) negotiates with the Swiss authorities to avoid any Swiss tax that would otherwise be payable in respect of the individual's Canadian source income; it is our view that such individual would not be considered a resident of Switzerland for purposes of the Convention by virtue of paragraph 5 of Article 4 thereof. ...

A plan will not be considered a PHSP if it allows a participating employee who has no allocation to a particular component of the plan in the prior year to carry those expenses forward or back to another year. 2. A plan that allows a participating employee to allocate a nominal amount to a particular component of a plan in a year merely to allow the carry forward of excess expenses into another plan year would not be considered a PHSP. 3. ... However, a plan will not be considered a PHSP if it allows participating employees: 1) who have no allocation to a particular component of the plan in the prior year to carry those expenses forward or back to another year; or 2) to allocate a nominal amount to a particular component of a plan in a year merely to allow the carry forward of excess expenses into another plan year. ...

However, where an individual receives a lump sum payment in lieu of future benefits that would have been otherwise paid under an employer long-term disability plan, in circumstances such that the payment can reasonably be considered to be proceeds of disposition of an interest in an insurance policy, it is our view that the proceeds are not taxable; not under paragraph 6(1)(f) of the Act or as a capital gain. ... However, where an individual receives a lump sum payment in lieu of future benefits that would have been otherwise paid under an employer long-term disability plan, in circumstances such that the payment can reasonably be considered to be proceeds of disposition of an interest in an insurance policy, it is our view that the proceeds are not taxable; not under paragraph 6(1)(f) of the Act or as a capital gain. We are unable to confirm that the receipt of a lump sum payment in respect of future benefits under an employer long term disability plan will, in all cases, be considered to be a receipt of proceeds of disposition from the disposal of an interest in an insurance policy. ...

Reasons: Corporation is not a personal services business and not likely a specified investment business within the meaning of subsection 125(7). 2005-015036 XXXXXXXXXX Rob Ferrari (613) 957-2138 February 14, 2006 Dear XXXXXXXXXX: Re: Small Business Corporation We are writing in response to your letter of August 22, 2005, wherein you requested our comments on whether a corporation is considered to have active business income for the purposes of the capital gains deduction. ... Interpretation Bulletin IT-73R6 indicates in paragraph 13 that a corporation which operates a hotel is generally considered to be in the business of providing services and not in the business of renting property. ... However, the operation of a work-camp where services include meals, furnished lodging, fresh linens, housekeeping, laundromat and fuel sales would likely be providing a sufficient level of services such that it would not be considered to constitute a business the "principal purpose of which is to derive income from property". ...

23 September 1998 External T.I. 98089850- REFUNDABLE TAX- SDA NOT RCA Unedited CRA Tags 207.5(1) 12(1)(n.3) Principal Issues: What would be the tax implications of the refundable tax where a portion of contributions under an RCA is considered to be: 1. unreasonable; or 2. an SDA. ... Where a plan or arrangement has been self-assessed as an RCA but is (in whole or part) subsequently reassessed as a SDA, the refundable tax of the RCA will be recalculated on reassessment to reflect only those contributions that are considered to be to an RCA. ... From an administrative viewpoint we are not certain as to whether this overpayment of account would be refunded to the custodian of the RCA or would be considered a withholding of tax under section 153 with regard to the SDA income inclusion. ...

29 May 2018 STEP Roundtable Q. 2, 2018-0744101C6- Creation of a Trust Unedited CRA Tags 104(4), 108(1) "testamentary trust", 104(5.8) Principal Issues: When is a testamentary trust considered to have been created for purposes of the deemed disposition in paragraph 104(4)(b)? ... CRA Response The question of the creation date of a testamentary trust has been considered in past STEP Roundtables (footnote 1). ... It is ultimately a question of fact as to when a trust is considered to be established and there may be situations where the creation date of a testamentary trust is not concurrent with the testator’s date of death. ...