Income Tax Severed Letters - 2019-09-18

Ruling

2019 Ruling 2019-0795521R3 - XXXXXXXXXX split-up butterfly

Unedited CRA Tags
55(1), 55(2), 55(3)(b), 55(3.1), 85(1), 86(1), 84(3), 84.1(1), 245

Principal Issues: Whether the exception to subsection 55(2) provided in paragraph 55(3)(b) applies to the Proposed Transactions.

Position: Yes.

Reasons: The conditions have been satisfied and the butterfly denial provisions of subsection 55(3.1) do not apply.

Ministerial Correspondence

30 July 2019 Ministerial Correspondence 2019-0814471M4 - Deductible Union Dues

Unedited CRA Tags
8(1)(i)

Principal Issues: Whether certain amounts that were paid by an individual would be considered union dues that would be deductible under paragraph 8(1)(i) of the Act.

Position: Depends - see response.

Reasons: See response.

Technical Interpretation - External

31 July 2019 External T.I. 2019-0798361E5 - Business use of vehicles – maintenance employees

Unedited CRA Tags
6(1)(a)
Summary Under
Tax Topics - Income Tax Act - Section 6 - Subsection 6(1) - Paragraph 6(1)(a)
on-call maintenance staff who drove intraday in their employer’s pickup truck between home and the maintenance site received no taxable benefit /quantification of carpooling benefit

Principal Issues: Whether maintenance employees travel would be considered personal in various circumstances.

Position: Question of fact.

Reasons: Law and CRA administrative policies.

25 July 2019 External T.I. 2018-0787011E5 - Spousal support - legal expenses & lump-sum awards

Unedited CRA Tags
18(1)(a); 56.1(4)
Summary Under
Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(a) - Legal and other Professional Fees
general deductibility of legal fees incurred for periodic support (but not for a lump sum settlement)

Principal Issues: Whether legal expenses incurred in prior years to obtain spousal support would cease to be deductible if the outcome of the support claim in a subsequent year awards a lump sum payment to the individual.

Position: No. The outcome of a support claim is irrelevant in determining the deductibility of related legal expenses claimed in prior years' tax returns.

Reasons: Legal expenses incurred to obtain spousal support are generally deductible in computing income as long as the support claim was bona fide (made in good faith) and not frivolous, with a reasonable chance of success (assuming there is a pre-existing right to support).