Income Tax Severed Letters - 2025-09-10

Ruling

2021 Ruling 2021-0894161R3 - Qualifying Disposition - REIT spinout

Unedited CRA Tags
107.4, 132(6), 245(2)

Principal Issues: A. None of the Proposed Transactions will, in and of themselves, adversely affect the qualification of the REIT as a mutual fund trust within the meaning of subsection 132(6). B. The REIT Qualifying Disposition will constitute a “qualifying disposition” within the meaning of subsection 107.4(1), such that the rules in subsection 107.4(3) will apply to the REIT, New XXXXXXXXXX REIT and the Unitholders in respect of the REIT Qualifying Disposition.
C. Subsection 245(2) will not apply to redetermine the tax consequences described in the foregoing rulings.

Position: A. Yes. B. Yes. C. Yes.

Reasons: 1. Meets all of the requirements. 2. Meets all of the requirements. 3. There is no misuse or abuse of the Act.

Technical Interpretation - External

29 January 2025 External T.I. 2024-1018131E5 - Incentive Payments to XXXXXXXXXX Medical Residents

Unedited CRA Tags
56(1)(n); 56(1)(r)(i); 56(3); 5(1); 6(1)

Principal Issues: 1) What is the tax treatment of reimbursements received by medical students to partially cover their transportation and accommodations costs when they choose to take elective courses in remote underserved communities? 2) What is the tax treatment of travel and accommodation reimbursements received by medical residents to partially cover their transportation and accommodations costs when they choose to do their practical training in remote underserved communities?

Position: 1) The reimbursements are in the nature of a scholarship or bursary to be included in income under paragraph 56(1)(n), subject to the scholarship exemption under subsection 56(3). 2) The reimbursements are in the nature of earnings supplements to be included in income under subparagraph 56(1)(r)(i) of the Act.

Reasons: 1) The reimbursements assist medical students in pursuing their education. As per paragraph 3.9 of Income Tax Folio S1-F2-C3, if a scholarship program provides reimbursements to pay for such things as lodging or personal travel, the reimbursed amounts would fall within the scope of subparagraph 56(1)(n)(i). 2) In the present case, the reimbursements provide an incentive for medical residents to obtain employment in remote underserviced areas. Therefore, subparagraph 56(1)(r)(i) appears to be the more specific provision that supersedes the general employment provisions in section 6 of the Act.

21 June 2024 External T.I. 2024-1009801E5 - BC Mining Exploration Tax Credit (METC)

Unedited CRA Tags
59(3.2), 66.1(1), 66.1(2), 66.1(3), definitions of "Canadian exploration expense" and of "cumulative Canadian exploration expense" in 66.1(6) of the ITA

Principal Issues: Should the BC METC should be reported as income on an individual's federal income tax return?

Position: The BC METC should be deducted in computing the individual's cumulative Canadian exploration expense pool. If the individual has a negative cumulative Canadian exploration expense at the end of their taxation year, the individual will be required to report the negative balance as income on their federal income tax return for that taxation year.

Reasons: Element J of the definition "cumulative Canadian exploration expense" ("CCEE") in subsection 66.1(6) of the ITA requires the amount of any assistance, such as the BC METC, that the taxpayer has received or is entitled to receive in respect of Canadian exploration expenses ("CEE") to be deducted from the taxpayer’s CCEE pool. Consequently, the BC METC must be deducted from a taxpayer’s CCEE in accordance with this provision. If such deduction causes the taxpayer’s CCEE to become negative, the taxpayer will be required to include the negative balance in their income pursuant to subsections 66.1(1) and 59(3.2) of the ITA.