Translations of recent severed letters

Bundle Date Translated severed letter Summaries under Summary descriptor
2016-01-20 3 December 2015 External T.I. 2015-0593941E5 F - Allocation of the safe income on hand Income Tax Act - Section 55 - Subsection 55(2.1) - Paragraph 55(2.1)(b) quaere whether 7% reduction is significant/ $50,000 is significant in absolute terms
11 December 2015 External T.I. 2015-0601561E5 F - Attribution Rules Income Tax Act - Section 74.4 - Subsection 74.4(2) annual dividends by an SBC to a non-SBC are not an indirect transfer of property to the non-SBC by the individual who formed the SBC
8 December 2015 External T.I. 2015-0613401E5 F - Attribution Rules Income Tax Act - Section 74.4 - Subsection 74.4(2) “technically” s. 74.4(2) may be avoided through a stock dividend
8 December 2015 External T.I. 2015-0616321E5 F - CEE - Severance pay Income Tax Act - Section 66.1 - Subsection 66.1(6) - Canadian exploration expense - Paragraph (a) severance payment not includible in CEE
Income Tax Regulations - Regulation 1206 - Subsection 1206(1) - Canadian exploration and development overhead expense exclusion of severance payment
2016-01-13 2 October 2015 External T.I. 2012-0463801E5 F - Déduction pour gain en capital – permis de pêche Income Tax Act - Section 110.6 - Subsection 110.6(1.3) - Paragraph 110.6(1.3)(b) para. (b) test need only be satisfied at end of 24-month period
28 July 2015 External T.I. 2015-0585431E5 F - Frais juridiques Income Tax Act - Section 42 - Subsection 42(1) - Paragraph 42(1)(b) legal expenses incurred by property vendor deemed to reduce proceeds or generate capital loss under s. 42(1)(b)
10 October 2014 APFF Roundtable Q. 13, 2014-0538111C6 F - Boni suite à la signature d'un contrat d'appro Income Tax Act - Section 9 - Timing Canderel and Ikea principles
2016-01-06 8 December 2015 External T.I. 2015-0610921E5 F - Associated corporations - child under 18 Income Tax Act - Section 256 - Subsection 256(1.3) s. 256(1.3) can apply where minor turns 18 shortly after the year's start
3 December 2015 External T.I. 2015-0613761E5 F - Capital Dividend Account Income Tax Act - Section 89 - Subsection 89(1) - Capital Dividend Account exempting a capital gain doubles the CDA addition
2015-12-30 29 October 2015 External T.I. 2015-0589051E5 F - Pension income splitting and bankruptcy Income Tax Act - Section 60.03 - Subsection 60.03(1) - Split-Pension Amount election available where pensioner or pension transferee is bankrupt/apportionment of split-pension amount
Income Tax Act - Section 128 - Subsection 128(2) - Paragraph 128(2)(f) s. 60.03 deductions/inclusions still available
6 November 2015 External T.I. 2015-0611691E5 F - Member of a cooperative corporation Income Tax Act - Section 136 - Subsection 136(2) - Paragraph 136(2)(c) meaning of “member” informed by corporate law rather than 135(4) definition
2015-12-23 30 July 2015 External T.I. 2014-0552041E5 F - Permis XXXXXXXXXX Income Tax Regulations - Schedules - Schedule II - Class 14 renewable government licences were ECP, not Class 14
Income Tax Act - Section 14 - Subsection 14(5) - Eligible Capital Expenditure renewable government licences were ECP, not Class 14
26 August 2015 External T.I. 2015-0564171E5 F - Paiements d'un RPAC à un Indien Income Tax Act - Section 81 - Subsection 81(1) - Paragraph 81(1)(a) pension distribution to Indian included in income under s. 56(1)(z.3) before excluded under s. 81(1)(a)
Income Tax Act - Section 153 - Subsection 153(1.1) procedure for reduced withholding on pension distributions to status Indian
6 August 2015 External T.I. 2015-0565651E5 F - Reliquat dévolu à une administration municipale Income Tax Act - Section 149 - Subsection 149(1) - Paragraph 149(1)(l) personal benefit rule applies to liquidation right of municipal member
2015-12-09 9 October 2015 APFF Roundtable Q. 1, 2015-0595751C6 F - Deductibility of financing fees and 20(1)(e)(v) Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(e) discharge of a debt through its assumption or cash proceeds from sub transferee denies a s. 20(1)(e)(v) deduction
9 October 2015 APFF Roundtable Q. 2, 2015-0595521C6 F - Meaning of "actively engaged" Income Tax Act - Section 120.4 - Subsection 120.4(1) - Split Income - Paragraph (c) - Subparagraph (c)(ii) - Clause (c)(ii)(D) IT-349R3 and IT-268R4 potentially relevant to meaing of "actively engaged on a regular basis"
9 October 2015 APFF Roundtable Q. 3, 2015-0595761C6 F - Application of ss. 18(3.1) Income Tax Act - Section 18 - Subsection 18(3.1) - Paragraph 18(3.1)(a) no capitalization of repair/maintenance expenses incurred during renovation etc.
9 October 2015 APFF Roundtable Q. 4, 2015-0595541C6 F - Computation of taxable benefit Income Tax Act - Section 15 - Subsection 15(1) determination of normal yield re shareholder-provided luxurious property
9 October 2015 APFF Roundtable Q. 5, 2015-0595651C6 F - Frais de garde subventionnés
23 October 2015 External T.I. 2015-0614231E5 F - Frais de garde subventionnés Income Tax Act - Section 63 - Subsection 63(1) additional Quebec child care contribution is deductible in the care year rather than the subsequent return-filing year (assuming timely payment to ARQ)
9 October 2015 APFF Roundtable Q. 6, 2015-0595551C6 F - Capital Dividend Account Income Tax Act - Section 87 - Subsection 87(2) - Paragraph 87(2)(z.1) amalgamation can cause a combined positive CDA balance to be zeroed
Income Tax Act - Section 89 - Subsection 89(1) - Capital Dividend Account capital loss does not eliminate positive CDA contribution of capital dividend received
9 October 2015 APFF Roundtable Q. 7, 2015-0595561C6 F - Computation of adjusted cost base and section 84.1 Income Tax Act - Section 84.1 - Subsection 84.1(2) - Paragraph 84.1(2)(a.1) terminal-return capital gains exemption claimed on bequested shares grinds their ACB for s. 84.1 purposes to the family beneficiaries
9 October 2015 APFF Roundtable Q. 8, 2015-0595591C6 F - Dividend Refund and Part IV Tax Payable Income Tax Act - Section 129 - Subsection 129(1) unclaimed divided refunds do not generate s. 186(1)(b) tax to the dividend recipient
9 October 2015 APFF Roundtable Q. 9, 2015-0595661C6 F - Question 9 - Table Ronde APFF 2015 Income Tax Act - Section 9 - Timing damages clause might represent a condition permitting deferral of income recognition
Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(m) s. 20(1)(m) reserve may be claimable for an amount included under s. 9 rather than 12(1)(a)
9 October 2015 APFF Roundtable Q. 10, 2015-0595671C6 F - Question 10 - Table Ronde APFF 2015 General Concepts - Effective Date price adjustment clause not required to reduce income for an excessive management fee
Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(a) - Income-Producing Purpose generally should be reimbursement for expenses incurred for affiliate
9 October 2015 APFF Roundtable Q. 11, 2015-0595771C6 F - Deductibility of interest in a leveraged buyout Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(c) CRA non-committal on interest deductibility where only the indirect use of borrowed funds is to acquire Target’s shares
9 October 2015 APFF Roundtable Q. 12, 2015-0595601C6 F - Proposed legislation - subsection 55(2) Income Tax Act - Section 55 - Subsection 55(2.1) - Paragraph 55(2.1)(b) transaction targeted at reducing FMV of Opco shares for creditor-proofing was caught
Income Tax Act - Section 55 - Subsection 55(2) no relief under new rules where Part IV tax is refunded on payment of dividend to individual shareholder
9 October 2015 APFF Roundtable Q. 13, 2015-0595781C6 F - Reimbursement of attributed income Income Tax Act - Section 103 - Subsection 103(1.1) no secondary adjustments are required for the operation of most income attribution provisions
Income Tax Act - Section 15 - Subsection 15(1) no secondary adjustments are required for the operation of most income attribution provisions
9 October 2015 APFF Roundtable Q. 14, 2015-0595631C6 F - Indirect Monetization of CGD Income Tax Act - Section 84.1 - Subsection 84.1(2) - Paragraph 84.1(2)(a.1) individual cannot effectively use the ACB of shares previously stepped-up using the capital gains deduction to create a loss to offset a gain on the sale of common shares
Income Tax Act - Section 245 - Subsection 245(4) Descarries not consistent with use of ACB on a previous capital gains crystallizatin to create a capital loss for use on a sale
9 October 2015 APFF Roundtable Q. 15, 2015-0595641C6 F - Surplus Stripping and GAAR Income Tax Act - Section 55 - Subsection 55(2) GAAR did not apply where a taxpayer deliberately triggered the application of s. 55(2)

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