Income Tax Severed Letters - 2026-07-28

Ruling

2025 Ruling 2025-1055441R3 - Internal Reorganization

Unedited CRA Tags
55(3)(a), 245(2)

Principal Issues: 1. Does paragraph 55(3)(a) apply in the context of this internal reorganization? 2. Does subsection 245(2) apply with respect to this internal reorganization?

Position: 1. Yes. 2. No.

Reasons: 1. There is no transaction described in subparagraphs 55(3)(a)(i) to (v) that forms a part of the same series of transactions or events that include the deemed dividend; 2. The Proposed Transactions do not include an avoidance transaction.

2025 Ruling 2025-1075141R3 - Internal reorganization under paragraph 55(3)(a)

Unedited CRA Tags
55(2), 55(3)(a)

Principal Issues: Whether the deemed dividends received in the course of the proposed corporate reorganization are exempt from subsection 55(2) because of paragraph 55(3)(a)?

Position: Yes.

Reasons: In accordance with the provisions of the Act.

Technical Interpretation - External

17 April 2026 External T.I. 2025-1080181E5 - First Time Homebuyer’s Tax Credit Transition Grant

Unedited CRA Tags
118.05; Saskatchewan's Chapter E-13.1 Reg 32; and section 19.2 of the Saskatchewan Income Tax Act.

Principal Issues: What is the tax treatment of the Saskatchewan First Time Homebuyer’s Tax Credit Transition Grant, which is available to eligible individuals who claimed the First Time Homebuyer’s Tax Credit for the 2024 tax year?

Position: The Grant is not considered to be income from a source, and, therefore, it does not need to be included in the recipients' income.

Reasons: The Grant is not based on a means, needs, or income test (therefore, it does not fall under the ambit of paragraph 56(1)(u)) and it does not fall under any of the other income sources under the Act.

2 April 2026 External T.I. 2025-1066701E5 - Member Loans to Housing Co-operative

Unedited CRA Tags
149(1)(l)

Principal Issues: Will loans from members of a housing co-operative (before or after construction) to the housing co-operative cause the housing co-operative to fail or cease to qualify for the tax exemption provided in paragraph 149(1)(l) of the Income Tax Act?

Position: Question of fact.

Reasons: The housing co-operative may cease to be exempt from tax under paragraph 149(1)(l) if it generates profits (other than incidental profits) that allow it to repay the principal and/or interest on the member loans. Additionally, the housing co-operative cannot make its income payable to or otherwise available for the personal benefit of the member. Therefore, where members are repaid the value of upgrades/renovations in excess of the cost of those upgrades/renovations, the income of housing co-operative will likely be considered to have been made available for the personal benefit of members, leading to the loss of its status as a tax-exempt NPO.