Income Tax Severed Letters - 1997-10-03

Principal Issues:
Whether the reserve claimed by a member of a partnership under section 34.2 and included in income in following year when the individual was no longer a member of the partnership would be allocated to his province of residence or in accordance with some other formula.

Position:
Cannot be definitive, only general comments available; transaction being completed, taxpayer should consult the TSO.
Income earned in a year in a province is computed according to rules under Part XXVI of Regulations and would depend on whether taxpayer carried on a business in the year, resided in the province and had a permanent establishment in or outside the province.

Reasons:

Principales Questions:

Un administrateur bénévole siège sur le conseil d'administration d'un organisme de bienfaisance enregistré et reçoit un remboursement (ou allocation) pour ses frais d'automobile lorsqu'il se rend aux réunions du conseil d'administration. Le remboursement (ou allocation) est fondé sur le nombre de kilomètres parcourus entre sa résidence et le lieu où les réunions du conseil d'administration de l'organisme de bienfaisance enregistré sont tenues. Est-ce que ce remboursement (ou allocation) est imposable?

Position Adoptée:

Principal Issues:

In order to develop a residential area on an Indian reserve, the area would become subject to a lease. For purposes of determining an Indian's exemption from income tax, would living on such leased land still be considered to be living on a reserve?

Position:

Yes, provided that the Indian band's surrender of the land is only conditional, not absolute.

Reasons:

Principal Issues:

Whether travel allowance for local members who are travelling to a work site outside their local's jurisdiction is tax-exempt.

Position:

No.

Reasons:

Principal Issues:

Whether, in light of comments contained in Income Tax Technical News No.5 dated July 28, 1995, our position concerning the timing of an addition to the ACB of an interest in a partnership under subparagraph 53(1)(e)(viii) in circumstances involving the application of subsection 66.4(6) remains as reflected in identical responses to question number 18 at the Institute of Chartered Accountants of Alberta meeting on May 18, 1994 and question number 4 at the Canadian Petroleum Tax Society meeting on June 2, 1994?

Position:

In calculating the ACB to a taxpayer of an interest in a partnership at a particular time, only amounts deemed under subsection 66.4(6) of the Act in respect of fiscal periods of the partnership ending before that particular time would be included under subparagraph 53(1)(e)(viii) of the Act. In other words, amounts referred to in subparagraph 53(1)(e)(viii) of the Act will not increase the ACB of the partner's interest in the partnership until after the end of the relevant fiscal period of the partnership.

However, the view expressed in the above Roundtable questions would not change provided a fiscal period of the partnership ends after the distribution of partnership assets to the partner and prior to the partnership interest being disposed of by the partner on dissolution of the partnership.

Reasons:

Principal Issues:

partner draw as loan

Position:

more than likely to be perceived as draw and cause negative acb.

Reasons:

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

XXXXXXXXXX 972082

Attention: XXXXXXXXXX

August 29, 1997

Dear Sirs:

Re: Safe Income Allocated to Stock Dividend Shares

Principal Issues:

Is a "Cap" on mileage allowance sufficient to make it taxable ?

Position:

Case by case basis

Reasons:

Principal Issues:

Under what circumstances will a payment made by a discretionary trust to third parties for the benefit of a minor beneficiary be considered paid to the child for the purposes of subsections 104(6), (13) and (24).

Position:

Requirements to be met as indicated.

Reasons:

Principal Issues:

Residency Status of SICAVs for Tax Treaty Purposes

Position:

SICAVs are not residents of a Contracting State for treaty purposes. However, in the case of France, new amending Protocol will provide that SICAVs will be resident of France but only to the extent that their shareholders are liable to French tax on the income from the SICAV.

Reasons:

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

XXXXXXXXXX 5-971213

A l'attention de XXXXXXXXXX

Le 7 août 1997

Mesdames, Messieurs,

Objet: Recherches scientifiques et développement expérimental
Application de l'alinéa 37(8)a) de la Loi

Principal Issues:

Is a plan described in Regulation 6801(d) also an RCA if it is funded?

Position:

While there may be a few exceptions where one of the exempting paragraphs of the RCA definition also applies, in most cases a funded 6801(d) type of plan will be an RCA

Reasons:

Position Adoptée:

Position Adoptée:

Position Adoptée:

Principal Issues:

Application of postion in IT-302R3 regarding effect of 111(4)(e) election after reassessment.

Position:

Position equally applicable to assessment and reassessment.

Reasons:

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

Tim Kuss
XXXXXXXXXX 970140

June 20, 1997

Dear XXXXXXXXXX:

Re: Subsections 20(11), 20(12) and IT-201R2 and IT-506

This is in reply to your letter dated December 26, 1996 regarding the above matter. Thank you for your comments.

Principales Questions:

1. Est-ce que le paragraphe 125.4(4) de la Loi s'applique à des situations particulières?

2. Est-ce que les sommes versées par les sociétés constituent des montants d'aide venant diminuer le coût de production aux fins du calcul du crédit d'impôt pour production cinématographique ou magnétoscopique canadienne?

3. Est-ce que le terme "salaire" utilisé à l'alinéa a) de la définition de "dépense de main-d'oeuvre" au paragraphe 125.4(1) de la Loi fait référence au salaire net ou au salaire brut versé à un employé?

Position Adoptée: