Income Tax Severed Letters - 2009-09-11

Ruling

2009 Ruling 2009-0320211R3 - Substituted Property

Unedited CRA Tags
88(1)(c.3) 88(1)(c)(vi) 248(10)

Principal Issues: Whether Guarantee Rights constitute Substituted Property as described in paragraph 88(1)(c.3)

Position: Favourable Ruling provided.

Reasons: In compliance with the law and previous positions.

Ministerial Correspondence

28 August 2009 Ministerial Correspondence 2009-0331181M4 - Home Renovation Tax Credit

Principal Issues: Are boilers eligible for the home renovation tax credit?

Position: Yes.

Reasons: Enduring in nature and integral to the dwelling.

20 August 2009 Ministerial Correspondence 2009-0329401M4 - HRTC - Renovations to a library owned by a NPO

Unedited CRA Tags
January 27, 2009 federal budget documents

Principal Issues: Will renovations to a library owned by a non-profit organization qualify for the HRTC?

Position: No.

Reasons: The HRTC is available only to individuals and a library is not an eligible dwelling for the HRTC.

13 August 2009 Ministerial Correspondence 2009-0329481M4 - HRTC - Mobile home

Unedited CRA Tags
January 27, 2009 Federal Budget Documents - Annex 5

Principal Issues: Will renovations to a mobile home qualify for the home renovation tax credit (HRTC)?

Position: Renovations to a mobile home that is eligible to be an individual's principal residence will qualify for the HRTC, provided all the other requirements are met.

Reasons: A mobile home is eligible to be an individual's principal residence if it is owned by the individual and ordinarily inhabited by the individual, his or her spouse or common-law partner, or his or her children.

10 August 2009 Ministerial Correspondence 2009-0325311M4 - Eligible expenditures- home renovation tax credit

Unedited CRA Tags
January 27, 2009 federal budget

Principal Issues: Do landscaping costs, including associated landscape design costs, qualify for the HRTC?

Position: Generally, yes

Reasons: Eligible expenditures for the home renovation tax credit include only expenditures that relate to a renovation or an alteration of an eligible dwelling (including land) that is enduring in nature and integral to the dwelling. The cost and installation of the following landscaping items will qualify for the HRTC: new sod, perennial shrubs and flowers, trees, large rocks, permanent garden lighting, permanent water fountain, permanent ponds, permanent irrigation systems, large permanent garden ornaments, and retaining walls

7 August 2009 Ministerial Correspondence 2009-0323891M4 - HRTC - Condominium - Eligible Expenditures

Unedited CRA Tags
January 27, 2009 Federal Budget - Annex 5

Principal Issues: How will a condominium or strata corporation determine a unit or strata lot owner's share of the eligible expenditures for the common areas?

Position: Generally, the expenses incurred for common areas are allocated to unit or strata lot owners based on the condominium or strata corporation's governing documents.

Reasons: The legislation regarding the HRTC has not yet been made public. However, the budget documents have stated that in the case of condominium corporations, the HRTC will be available for eligible expenditures incurred to renovate the unit that is eligible to be the individual's principal residence as well as the individual's share of the cost of eligible expenditures incurred in respect of common areas. Every condominium or strata corporation is governed by its own unique rules, regulations, and bylaws.

7 August 2009 Ministerial Correspondence 2009-0311771M4 - HRTC - Eligibility of expenditures.

Unedited CRA Tags
January 27, 2009 Federal Budget - Annex 5

Principal Issues: Would a furnace replacement that occurred prior to the 2009 federal budget date qualify for the home renovation tax credit (HRTC)?

Position: No. Although the cost of a new furnace would generally qualify for the HRTC, the furnace replacement occurred prior to January 28, 2009.

Reasons: The legislation regarding the HRTC has not yet been made public. However, the budget documents have stated that expenditures for work performed, or goods acquired, after January 27, 2009, and before February 1, 2010 will be eligible for the credit.

7 August 2009 Ministerial Correspondence 2009-0318321M4 - HRTC - Eligibility of expenditures

Unedited CRA Tags
January 27, 2009 Federal Budget - Annex 5

Principal Issues: Would the purchase of a new central air conditioning unit qualify for the home renovation tax credit (HRTC)?

Position: Yes.

Reasons: The legislation regarding the HRTC has not yet been made public. However, the budget documents state that expenditures will qualify for the HRTC, if they relate to a renovation or an alteration of an eligible dwelling, including land that forms part of the eligible dwelling, and if the renovation or alteration is of an enduring nature and is integral to the eligible dwelling. Such expenditures will include the cost of labour and professional services, building materials, fixtures, equipment rentals, and permits.

6 August 2009 Ministerial Correspondence 2009-0310961M4 - HRTC - Eligible expenditures

Unedited CRA Tags
January 27, 2009 Federal Budget - Annex 5

Principal Issues: If a homeowner performs the work, will the renovation or alteration qualify for the HRTC?

Position: Providing all other conditions are met, the costs of the renovation or alteration will qualify for the HRTC. The homeowner can do the work himself/herself; however, he/she cannot claim the value of his/her labour.

Reasons: Generally, under common law, a person cannot contract with oneself.

22 July 2009 Ministerial Correspondence 2009-0309561M4 - HRTC - Eligible Expenditures

Unedited CRA Tags
January 27, 2009 Federal Budget - Annex 5

Principal Issues: Asked for more information regarding renovations that will qualify for the home renovation tax credit (HRTC).

Position: Provided general information pertaining to the HRTC and examples of eligible expenditures

Reasons: Taxpayer asked for general information regarding the HRTC.

21 July 2009 Ministerial Correspondence 2009-0322911M4 - HRTC - Condominiums - Common area expenditures

Unedited CRA Tags
January 27, 2009 Federal Budget - Annex 5

Principal Issues: Who would qualify for the home renovation tax credit (HRTC) if expenditures are incurred in relation to window replacements of a condominium?

Position: If windows are part of the common area of the condominium and the condominium unit is eligible to be an individual's principal residence, the individual would be able to claim the HRTC on his or her share of the cost of replacing the windows.

Reasons: In the case of condominiums, the HRTC will be available for eligible expenditures incurred to renovate the unit that is eligible to be an individual's principal residence as well as the individual's share of the cost of eligible expenditures incurred for common areas.

13 August 2008 Ministerial Correspondence 2009-0326581M4 - Eligible expenditures- home renovation tax credit

Unedited CRA Tags
January 27, 2009 federal budget

Principal Issues: Do the costs incurred by homeowners to install water lines from the main water line to their residences (off-shoots) will qualify for the HRTC.

Position: Generally, yes

Reasons: Eligible expenditures for the home renovation tax credit include only expenditures that relate to a renovation or an alteration of an eligible dwelling (including land) that is enduring in nature and integral to the dwelling. The cost of installing off-shoots to an eligible dwelling will qualify for the HRTC. However, costs for routine repairs and maintenance, normally performed on an annual or more frequent basis, will not qualify for the HRTC.

Technical Interpretation - External

1 September 2009 External T.I. 2006-0168571E5 - Excluded property

Unedited CRA Tags
95; 251(2)
Summary Under
Tax Topics - Income Tax Act - Section 95 - Subsection 95(1) - Excluded Property
2-tier application of para. (d), partnership not a corporation for related corporation purposes

Principal Issues: Whether two partnerships can be considered to be related for the purpose of determining if the shares of a non-resident corporation are excluded property.

Position: No

Reasons: The definition "excluded property" in subsection 95(1) does not deem a partnership to be a non-resident corporation for the purpose of applying the related persons test in section 251.

2006-016857
XXXXXXXXXX J. MacGillivray
(613) 957-2103
September 1, 2009

13 August 2009 External T.I. 2009-0320581E5 - Subsections 20(11) and 20(12)

Unedited CRA Tags
20(11) 20(12) 126(1) Articles 10 and 11 of German Treaty

Principal Issues: Example of deductions made under subsections 20(11) and 20(12).

Position: General comments.

Reasons: N/A

4 August 2009 External T.I. 2009-0320491E5 - Personal services business

Unedited CRA Tags
18(1)(p) 125(7) "personal services business"

Principal Issues: Whether a series of expenses incurred by a personal services business is deductible under paragraph 18(1)(p) of the Income Tax Act (Canada).

Position: See response.

Reasons: See response.

16 July 2009 External T.I. 2009-0313821E5 - Eligible apprentice

Unedited CRA Tags
127(9) Reg. 7310

Principal Issues: When is the 24-month period starting for the purposes of the definition of "eligible apprentice" in subsection 127(9) of the Income Tax Act with respect to apprentices registered with the Saskatchewan Apprenticeship and Trade Certification Commission or with the Commission de la Construction du Québec.

Position: See response.

Reasons: See response.

15 July 2009 External T.I. 2009-0308541E5 - Income splitting - the kiddie-tax

Unedited CRA Tags
Proposed 120.4(1)(c)(ii)(C) "spit income" 251(1)(c) and 256(5.1)

Principal Issues: Whether the rental income received by the Trust from the franchisor under the head lease and distributed by the Trust to specified individuals would be income-derived from provision of property by the Trust to or in support of a business carried on by Opco (the sub-lessee) under clause 120.4(1)(c)(ii)(C) of the definition of "split income".

Position: Yes.

Reasons: See response.

13 July 2009 External T.I. 2009-0311501E5 - CCA-Point of Sale systems

Principal Issues: What is the CCA class for computers and software used for Point of Sales systems or computer hardware and systems for taking customer orders, transmitting orders to kitchens, and producing restaurant cheques?

Position: Class 45, 50 or 52 depending on the acquisition date and other conditions being met.

Reasons: From our review of POS systems advertised on the internet it was noted that, on one website, an economy system consisted of a computer, touch screen monitor, cash drawer, receipt printer and software. In was also noted that the computer was the main component of the price. A POS computer could qualify as general-purpose electronic data processing equipment and the other components of a POS system could qualify as ancillary data processing equipment. A POS system could be included in class 52 depending on the acquisition date and if the other conditions for inclusion in the class are met.