Translations of recent severed letters

Bundle Date Translated severed letter Summaries under Summary descriptor
2003-04-04 17 March 2003 External T.I. 2002-0130685 F - Limite inférieure - JVM Participation Income Tax Act - Section 107.4 - Subsection 107.4(4) purpose of s. 107.4(4)
24 February 2003 Internal T.I. 2002-0165537 F - Le détachement d'employés et l'article XV Treaties - Income Tax Conventions - Article 15 exemption in Art. 15 of US Treaty unavailable where Canadian employee seconded to US affiliate, which reimburses for his payroll
31 March 2003 External T.I. 2002-0171835 F - DON D'ACTIONS COTEES EN BOURSE Income Tax Act - Section 149.1 - Subsection 149.1(6.3) donation of Pubco shares to public foundation qualified as such given that s. 149.1(6.3) designation not effective until following year
Income Tax Act - Section 38 - Paragraph 38(a.1) donation of Pubco shares to public foundation qualified as such given that s. 149.1(6.3) designation not effective until following year
12 March 2003 External T.I. 2002-0176955 F - Retenu dividende français Treaties - Income Tax Conventions - Article 10 Canadian mutual fund trust or pension fund trust deemed to be the beneficial owner of dividends by Art. 29(7)(a) of the Canada-France Convention
24 March 2003 Internal T.I. 2002-0177587 F - XXXXXXXXXX EN CONSIGNATION PERTE Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(a) - Start-Up and Liquidation Costs business commences when a significant activity is initiated that is part of an income-generating process
Income Tax Act - Section 9 - Timing loss when inventory disappears is deducted when the loss is discovered
27 March 2003 External T.I. 2002-0178035 F - HYPOTHEQUE PLACEMENT ADMISSIBLE Income Tax Regulations - Regulation 4900 - Subsection 4900(1) - Paragraph 4900(1)(j) no requirement that the mortgage be a first mortgage or a residential mortgage
27 March 2003 External T.I. 2002-0180045 F - DEDUCTION DES INTERETS Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(c) - Subparagraph 20(1)(c)(i) s. 245(1) might be applied to transactions to convert non-deductible mortgage interest to deductible interest pursuant to sale of shares to borrowing wife and use of s. 74.1(1)
Income Tax Act - Section 74.1 - Subsection 74.1(1) s. 74.1(1) attributes income or loss after deduction of interest expense
11 March 2003 Internal T.I. 2003-0000087 F - Projet agricole au sens de 122.3(1)b)(i)(B) Income Tax Act - Section 248 - Subsection 248(1) - Farming woodlot management can be farming
4 April 2003 Internal T.I. 2003-0004387 F - OUTIL ADMISSIBLE APPRENTI MECANICIEN Income Tax Act - Section 8 - Subsection 8(6) - Paragraph 8(6)(b) - Subparagraph 8(6)(b)(ii) tool that is resold without being used qualifies as “new” to the purchaser
31 March 2003 External T.I. 2003-0006305 F - Safe Income Discretionary Dividend Income Tax Act - Section 55 - Subsection 55(2.1) - Paragraph 55(2.1)(c) questionable to allocate all SIOH to the class of discretionary dividend shares on which a dividend is paid/ cannot attribute pre-issuance safe income to a share
18 February 2003 Internal T.I. 2003-0182997 F - Calcul du revenu net étranger à 126(1)b)(i) Income Tax Act - Section 126 - Subsection 126(9) - Paragraph 126(9)(a) qualifying income not reduced by s. 110(1)(d) deduction
2003-03-28 18 March 2003 External T.I. 2003-0002915 F - Subsections 40(3.3) & 40(3.4) Income Tax Act - Section 40 - Subsection 40(3.4) taxpayer can designate order of disposition
18 March 2003 External T.I. 2002-0122845 F - CREDIT D'IMPOT POUR LE DOUBLAGE DE FILMS Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(x) timing of receipt of Quebec film dubbing credit
21 March 2003 External T.I. 2002-0161115 F - ALLOCATION DE FIN DE CARRIERE Income Tax Act - Section 146 - Subsection 146(1) - Earned Income end-of-career allowance received by physician is not earned income
24 March 2003 External T.I. 2002-0165265 F - REMBOURSEMENT DE PRIMES Income Tax Act - Section 146 - Subsection 146(8.1) election cannot be made with surviving spouse if bequest of RRSP is to surviving adult child
26 March 2003 External T.I. 2003-0008645 F - Non-Arm's Length Sale of Shares Income Tax Act - Section 84.1 - Subsection 84.1(1) no presumption that a transaction between companies owned by couple and nephew, respectively, is not arm’s length
Income Tax Act - Section 251 - Subsection 251(1) - Paragraph 251(1)(c) family relationship (e.g., uncle/nephew) are more likely to give rise to NAL transaction
2003-03-21 19 March 2003 External T.I. 2002-0151015 F - ALLOCATION DU COUT EN CAPITAL Income Tax Regulations - Schedules - Schedule II - Class 16 - Paragraph 16(e) the short-term use requirement in 16(e) must continue to be met following the acquisition
Income Tax Act - Section 13 - Subsection 13(5) Class 16 automobile must be moved to another class when it ceases to be used for short-term rentals
19 March 2003 External T.I. 2002-0171825 F - DEDUCTION POUR INSOLVABILITE LIQUIDATION Income Tax Act - Section 61.3 - Subsection 61.3(1) winding-up in year does not preclude the s. 61.3 deduction
10 March 2003 Internal T.I. 2002-0172187 F - DEDUCTIBILITE DES INTERET Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(c) - Subparagraph 20(1)(c)(i) interest on debenture issued in payment of interest, was non-deductible
Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(f) premium (termed additional interest”) was payable even if no early repayment, and qualified under s. 20(1)(f)
Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(c) reiteration of position re deductibility of participating interest post-Sherway
Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(a) - Legal and other Professional Fees legal fees re repaying debt were non-deductible
Income Tax Act - Section 248 - Subsection 248(1) - Dividend premium payable on debenture repayment based in part on the quantum of debtor’s equity was not a dividend
11 March 2003 External T.I. 2002-0179095 F - Issuance-Discretionary Shares non-Consid. Income Tax Act - Section 15 - Subsection 15(1) a benefit can be conferred on a taxpayer even where no net economic benefit
Income Tax Act - Section 69 - Subsection 69(1) - Paragraph 69(1)(b) issuance of shares at less than FMV to joint Holdco of current shareholders could generate a deemed gain under s. 69(1)(b)
Income Tax Act - Section 56 - Subsection 56(2) s. 56(2) inapplicable to discretionary-dividend shares
13 March 2003 External T.I. 2003-000009B F - UNE BANDE SANS RESERVE Other Legislation/Constitution - Federal - Indian Act - Section 87 remission where lands not yet a reserve
14 March 2003 External T.I. 2003-0001385 F - Capital Dividend Account Income Tax Act - Section 89 - Subsection 89(1) - Capital Dividend Account - Paragraph (a) no adjustments for change in capital gains inclusion rates
Income Tax Act - Section 256 - Subsection 256(9) amalgamation and acquisition of control on successive days created 1-day short taxation year
14 March 2003 External T.I. 2003-0002465 F - Usu-droit privé franc.- nu- prop. Canadien Income Tax Act - Section 45 - Subsection 45(1) - Paragraph 45(1)(a) change of use to bare owner when usufruct over French rental property was extinguished
Income Tax Regulations - Regulation 1102 - Subsection 1102(1) - Paragraph 1102(1)(c) rental property of bare owner was not eligible for CCA, as rental income was that of French usufructuary
14 March 2003 Internal T.I. 2003-0182977 F - 40(3.5)(c) Income Tax Act - Section 40 - Subsection 40(3.5)
Income Tax Act - Section 40 - Subsection 40(3.5) - Paragraph 40(3.5)(c) deeming rule in s. 40(5)(c) applies for purposes of the preconditions in s. 40(3.3) as to whether s. 40(3.4) applies
2003-03-14 26 February 2003 External T.I. 2002-0163625 F - FONDS RESERVES GARANTIS AU DECES Income Tax Act - Section 146 - Subsection 146(8.8) FMV of RRSP’s segregated fund assets was not less than the amount guaranteed by the insurer
14 February 2003 External T.I. 2002-0173195 F - Transfer of Shares Income Tax Act - Section 6 - Subsection 6(1) - Paragraph 6(1)(a) s. 6(1)(a) generally applicable to gift of shares by majority owner to key employee, but not to employee son

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