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As stated in the 1989 Corporate Management Tax Conference, the Department takes the position that a taxpayer is not required to capitalize pre-construction period costs unless such costs may be considered to be attributable to the construction period and related to the construction activity. ...

Cameron   (613) 957-2115 19(1) September 21, 1990 Dear Sirs: Re:  Definition of Qualified Small Business Corporation Share ("QSBCS") contained in subsection 110.6(1) of the Income Tax  Act (the "Act") We apologize for the delay in responding to your letter of November 22, 1989 in which your requested a technical interpretation concerning the above definition in the following situation: 24(1) Your indicate that you have been asked to determine whether a 24(1) share is a QSBCS and that in your view based upon the above facts the additional requirements of paragraph (d) of the QSBCS definition must be considered in making this determination. ...

Our opinion As discussed by phone on September 27 (Morrissey, Harding), it is our opinion that the payment being considered is arguably a "retiring allowance" as defined in subsection 248(1) of the Income Tax Act (the "Act"). ...

Generally, a return of contributions to an employee would be considered a lump sum payment.  ...

In particular you are unclear as to what exhibiting activities of non-race horses are considered farming.  ...

Accordingly, a share issued in such conditions would ordinarily be considered a short-term preferred share. ...

Where the paragraph 20(1)(s) payment is made in respect of current services, a contribution by an employer in a situation such as that described above would normally be deductible by the employer, and the wages foregone by the employee would normally not be considered to be income of the employee in the subsequent year. ...

With respect to the questions posed in 1, above, the Department takes the view that, unless the note is accepted as absolute payment as discussed in paragraph 2(b) of IT-436R an ordinary promissory note is considered to be a promise to pay and not payment of the remuneration owing.  ...

For example, subsection 110.6(7) of the Act may apply, depending on the facts of a particular situation, to deny a capital gains deduction claimed by a shareholder who is an individual in respect of the capital gain realized as a result of the application of paragraph 69(1)(b) of the Act because the corporation could be considered to have acquired its own shares for consideration that is significantly less than their fair market value at the time of acquisition, notwithstanding that the shareholder is deemed by paragraph 69(1)(b) to have disposed of his shares for proceeds of disposition equal to their fair market value. ...

It seems to us that, while paragraph 96(1)(f) of the Act does provide that in computing a partner's income the amount of income of the partnership from a source and the location of such source are to be considered that of the partner, this rule deals only with sources that are specifically enumerated in the Act.  ...