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Position: yes Reasons: Unharvested grain is considered inventory. J. Gibbons XXXXXXXXXX 5-972064 Attention: XXXXXXXXXX October 28, 1997 Dear Sir: We are replying to your letter of July 28, 1997, in which you request our opinion as to whether unharvested grain is inventory for purposes of the “optional inventory adjustment” under paragraph 28(1)(b) of the Income Tax Act (the “Act”). ... In our view, a farmer’s unharvested crop may be considered inventory for purposes of paragraph 28(1)(b) of the Act. ...

Elsewhere in Act, where tax of a political subdivision is to be considered, there is specific wording in the law eg. definition of business and non-business income tax in 126(7), Regulation 5907(4). ... You have asked if paragraph 95(2)(e.1) would apply in a situation where the dissolution of the affiliate results in no recognition of any gain or loss for U.S. federal tax purposes but is considered a taxable transaction for U.S. state tax purposes. ...

Specifically, you inquire whether the proceeds from a forced sale of shares or assets under section 92 of the Competition Act would be considered to be “compensation for property taken under statutory authority.” ... It is our view that, in such circumstances, the proceeds of disposition of the shares or assets would be considered compensation for property taken under statutory authority or the sale price of property sold to a person by whom notice to take it under statutory authority was given. ...

Principal Issues: Whether a plan that has a deferral period of a one year and a deferral salary not exceeding 33 1/3 % of annual salary is considered to be a prescribed plan; Position: Could be; Reasons: Subject to all other requirements of 6801(a) of the Regulations. 980417 XXXXXXXXXX Fouad Daaboul Attention: XXXXXXXXXX April 15, 1998 Dear Sirs: Re: Paragraph 6801(a) of the Income Tax Regulations (the "Regulations") This is in reply to your letter of February 10, 1998, wherein you requested clarification on ATR-39, deferred salary leave plan. ... In our opinion, where a plan or arrangement has deferral period of one year and a deferred amount not exceeding 1/3 of the annual salary for that year, subject to all other requirements of paragraph 6801(a) of the Regulations, it would be considered a prescribed plan or arrangement for the purposes of paragraph (l) of the definition "salary deferral arrangement" in subsection 248(1) of the Income Tax Act. ...

Therefore, provided the dairy operation can be considered to be the manufacturing or processing of goods for sale or lease then it is our opinion that the milk hauling trucks can be considered a qualified property for purposes of an ITC. ...

You stated that the cost was not deducted as an expense since it was considered capital. ... 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. ...

Your concern is whether an interest in a Canadian partnership that owns real property in Canada is considered to be an interest in the underlying real property such that an election under subsection 85(2) of the Act would or would not be denied in respect of a disposition of the interest held in the Canadian partnership by a foreign partnership for shares in a corporation. In the 1986 Canadian Tax Foundation Conference, the Department stated that “an interest in a partnership is not considered to be an interest in its underlying assets for purposes of section 85...”. ...

You have asked whether the government grant will be considered to reduce the qualified expenditures pursuant to subsection 127(18) of the Act. ... In your example, while the grant may be specified to be for the assistance in the construction of the building which is not a prescribed purpose building, it would be our view that the assistance would nevertheless be considered to be in respect of the SR&ED to be carried on within the building. ...

PRINCIPAL ISSUES: Are amounts received from Technology partnerships (industry Canada) by T\P to be considered loan or asssistance? ... We have reviewed the Agreement and the comments provided in your memorandum, and in this regard we offer the following comments: We concur with your position that the “contribution” by Technology Partnerships Canada, pursuant to the Agreement, should be considered government assistance and not a loan. ...

Principal Issues: Why working was not considered in the phrase "basic activity of daily living" for purposes of the disability tax credit. ... In addition, paragraph 118.4(1)(d) of the Act specifies that that no other activity, including working, housekeeping or a social or recreational activity, shall be considered an activity of daily living. ...