Translations of recent severed letters

Bundle Date Translated severed letter Summaries under Summary descriptor
2026-01-07 25 August 2025 Internal T.I. 2023-0974491I7 F - Qualification of Shares as "Prescribed Shares" Income Tax Regulations - Regulation 6204 - Subsection 6204(1) - Paragraph 6204(1)(a) - Subparagraph 6204(1)(a)(iii) where two share classes are inter-convertible, a capped liquidation entitlement for one class will cause both to be non-prescribed shares under Reg. 6204(1)(a)(iii)
2025-12-10 12 November 2025 External T.I. 2022-0923141E5 F - Allocation raisonnable pour frais de repas Income Tax Act - Section 6 - Subsection 6(1) - Paragraph 6(1)(b) - Subparagraph 6(1)(b)(vii) a meal allowance based solely on kilometerage is not reasonable
2025-11-26 3 June 2025 External T.I. 2022-0925091E5 F - Élément d’actif - Immeuble détenu en copropriété par indivision Income Tax Act - Section 248 - Subsection 248(1) - Small Business Corporation - Paragraph (a) an undivided interest in a building can satisfy the asset use test in the SBC and QSBCS definitions
2025-11-19 10 September 2025 External T.I. 2025-1070171E5 F - Disposition of a right to receive bitcoins Income Tax Act - Section 9 - Capital Gain vs. Profit - Cryptocurrency lack of income on bitcoins suggested that they might be acquired on income account
Income Tax Act - Section 54 - Adjusted Cost Base property acquired on income account does not have an ACB
2025-10-29 19 August 2025 External T.I. 2025-1066571E5 F - Distribution of settlement monies to First Nation Income Tax Act - Section 149 - Subsection 149(1) - Paragraph 149(1)(c) Indian band council is always a s. 149(1)(c) exempt municipality
Income Tax Act - Section 3 - Paragraph 3(a) distribution of land claims settlement amount by Indian band council to its members (including non-Indians) would not constitute income from a source
Income Tax Act - Section 104 - Subsection 104(13) land compensation received by a trust formed an Indian band council would be treated as a capital distribution when distributed
2025-09-17 19 June 2025 External T.I. 2024-1045841E5 F - Application of subsection 152(4.2) of the Act at death Income Tax Act - Section 152 - Subsection 152(4.2) the heir of a deceased employee who became entitled to a tax-free pay adjustment should count the s. 152(4.2) 10-year claim period from the year of payment
Income Tax Act - Section 5 - Subsection 5(1) retroactive pay adjustment that was agreed to after the employee’s death was non-taxable
Income Tax Act - Section 3 - Paragraph 3(a) retroactive pay adjustment that arose after death was tax-free
2025 Ruling 2025-1052291R3 F - Post-mortem Hybrid Pipeline Income Tax Act - Section 84 - Subsection 84(2) post-mortem pipeline entailing issuance of 8 quarterly notes by Newco 12 months after its acquisition of the stepped-up shares
Income Tax Act - Section 89 - Subsection 89(1) - Paid-Up Capital transactions contemplated the distribution of all the PUC of common shares
2025-09-03 3 June 2025 External T.I. 2025-1064821E5 F - Related persons Income Tax Act - Section 251 - Subsection 251(2) - Paragraph 251(2)(b) - Subparagraph 251(2)(b)(iii) repeated application of ss. 251(2)(b)(ii) and (iii) to relate two corporations
2025-08-27 4 July 2025 Internal T.I. 2025-1054791I7 F - Provincial allocation - CEWS Income Tax Regulations - Regulation 402 - Subsection 402(3) CEWS is excluded from gross revenue and wages for Reg. 402(3) purposes
Income Tax Regulations - Regulation 402 - Subsection 402(3) gross revenue does not include government assistance re expenses
2025-08-06 6 May 2025 External T.I. 2024-1010641E5 F - Relevant Group Entity Income Tax Act - Section 84.1 - Subsection 84.1(2.31) - Paragraph 84.1(2.31)(c) - Subparagraph 84.1(2.31)(c)(iii) the retention of Opco’s real estate in the parent’s Realtyco after a sale of Opco to the child’s Holdco does not render Realtyco a relevant group entity
2025-07-30 2024 Ruling 2024-1027631R3 F - Post-mortem planning - Pipeline Income Tax Act - Section 84 - Subsection 84(2) classical 24-month pipeline transaction for an investments company whose portfolio had performed poorly
1 May 2025 External T.I. 2024-1030911E5 F - Scholarships to non-residents to study French Income Tax Act - Section 118.94 scholarships received by non-resident temporary workers for French language training would be included in their worldwide income s. 118.94 computation purposes
Income Tax Act - Section 115 - Subsection 115(2) - Paragraph 115(2)(e) - Subparagraph 115(2)(e)(ii) scholarships received by non-resident temporary workers for French language training would not be included in their taxable income earned in Canada
2025-07-16 2024 Ruling 2024-1018811R3 F - RCA, Refundable Tax, Letter of credit Income Tax Act - Section 207.5 - Subsection 207.5(2) an RCA trust’s refundable Pt. XI.3 tax can be refunded through winding it up and replacing it by a new LC trust
2025-07-09 26 February 2025 Internal T.I. 2023-0985151I7 F - Remboursement de frais juridiques par un actionnaire à sa société / Reimbursement of legal fees by a shareholder Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(a) - Legal and other Professional Fees the vendor’s agreed reimbursement of the sold corporation’s legal costs of a failed suit in consideration for a dividend had the suit succeeded, likely was non-deductible
Income Tax Act - Section 42 - Subsection 42(1) - Paragraph 42(1)(b) - Subparagraph 42(1)(b)(ii) s. 42(1)(b)(ii) might apply to the vendor’s agreed reimbursement, post-sale, of the sold corporation’s legal costs of a failed suit
Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(a) - Incurring of Expense contingent dividend prospect likely did not support a deduction for an obligation to reimburse legal fees
22 May 2024 External T.I. 2024-1016211E5 F - Mineral Resource Cert - XXXXXXXXXX Income Tax Act - Section 248 - Subsection 248(1) - Mineral Resource - Paragraph (d) - Subparagraph (d)(i) NRC certification received
2025-07-02 29 April 2025 External T.I. 2024-1036641E5 F - Relevant Group Entity Income Tax Act - Section 84.1 - Subsection 84.1(2.31) - Paragraph 84.1(2.31)(c) - Subparagraph 84.1(2.31)(c)(iii) a Realtyco, whose shares qualified as QSBCS based on a related corporation’s active business, would be a “relevant group entity” on a sale of the latter’s shares
Income Tax Act - Section 84.1 - Subsection 84.1(2.32) - Paragraph 84.1(2.32)(c) - Subparagraph 84.1(2.32)(c)(iii) continued control of the related lessor to an Opco would violate the s. 84.1(2.32)(c)(iii) condition on a sale of Opco to a child’s purchaser corporation
2025-06-18 21 February 2025 Internal T.I. 2021-0902871I7 F - Déduction de frais de repas Income Tax Act - Section 67.1 - Subsection 67.1(2) - Paragraph 67.1(2)(c) a vendor’s disclosing on its invoices the amount of meal allowances paid to its sales people transferred the 50% s. 67.1 denial onto the purchasers
Income Tax Act - Section 67.1 - Subsection 67.1(1) purchaser was subject to 50% limitation on meal allowance amounts disclosed on the vendor’s invoices
2025-05-21 2 April 2025 External T.I. 2019-0818321E5 F - Reverse Earnout Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(g) capital gains and then capital loss treatment of an asset sale made on a reverse earnout basis accepted, where the targets were not achieved
Income Tax Act - Section 40 - Subsection 40(1) - Paragraph 40(1)(a) - Subparagraph 40(1)(a)(iii) no capital gains reserve is available for a reverse earnout
2025-05-14 2024 Ruling 2023-0970691R3 F - Part VI.1 of the Income Tax Act Income Tax Act - Section 248 - Subsection 248(1) - Short-Term Preferred Share - Paragraph (a) - Subparagraph (a)(i) Part VI.1 tax could apply to an agreement to repurchase common shares for their current FMV, if their FMV declines by the closing time
Income Tax Act - Section 248 - Subsection 248(1) - Taxable Preferred Share - Paragraph (f) TPS definition did not apply to common share repurchase agreement where repurchase price in fact did not exceed FMV at closing time
2025-05-07 31 December 2024 External T.I. 2021-0885741E5 F - CIAPH - habitation admissible Income Tax Act - Section 118.05 - Subsection 118.05(1) - Qualifying Home - Paragraph (a) - Subparagraph (a)(ii) s. (a)(ii) tested re occupancy as a “principal place of residence,” irrespective of whether the home was inside or outside Canada
Income Tax Act - Section 118.05 - Subsection 118.05(1) - Qualifying Home - Paragraph (a) - Subparagraph (a)(iii) s. (a)(iii) inapplicable if no spouse or common-law partner at the time of home acquisition
2025-04-23 4 January 2022 External T.I. 2016-0644861E5 F - Travail de nature temporaire Income Tax Act - Section 6 - Subsection 6(1) - Paragraph 6(1)(a) - Subparagraph 6(1)(a)(i) the "duties … of a temporary nature" condition is tested on a site-by-site basis
28 March 2025 External T.I. 2016-0662951E5 F - Alinéa b) de la définition d’action admissible de Income Tax Act - Section 110.6 - Subsection 110.6(1) - Qualified Small Business Corporation Share - Paragraph (b) settling QSBCS shares on a personal trust with related beneficiaries before a sale of those shares 6 months’ later would not cause QSBCS status to be lost
Income Tax Act - Section 110.6 - Subsection 110.6(14) - Paragraph 110.6(14)(f) settling QSBCS shares on a personal trust whose beneficiaries were related as required by s. 110.6(14)(c)(ii) permitted a sale thereafter without loss of QSBCS status
2025-04-16 4 March 2025 External T.I. 2024-1009691E5 F - Bump and Qualifying Exchange Income Tax Act - Section 88 - Subsection 88(1) - Paragraph 88(1)(c) a s. 132.2 exchange of MFC shares for MFT units precluded a s. 88(1)(d) bump of the MFT units
2025-04-09 2024 Ruling 2023-0998291R3 F - Multi-wings split-up net asset butterfly 55(3)(b) Income Tax Act - Section 55 - Subsection 55(1) - Distribution split-up butterfly between a divorced couple where excess debt is allocated to land rather than building to produce capital gains treatment

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