Income Tax Severed Letters - 2022-11-09

Ruling

2021 Ruling 2021-0916821R3 F - Continuance corporation from CBCA to Co-operative

Unedited CRA Tags
Definition “proceeds of disposition” in section 54; 84(1), 84(3), 84(5), 84(9), 86, 93.2(2) and (3), 135.1, 136, definitions « share », « shareholder » and « disposition » in 248(1), 250(5.1), 256(8.1) of the Income Tax Act.
Summary Under
Tax Topics - Income Tax Act - Section 86 - Subsection 86(1)
application of s. 86 reorganization rule to a continuance from the CBCA to a Co-operatives Act
Summary Under
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Disposition
continuance from the CBCA to a Co-operatives Act did not entail disposition of assets, but s. 86 applied at the shareholder level

Principal Issues: (1) Whether continuance of a corporation incorporated under the Canada Business Corporations Act to the Co-operative Corporations Act of Ontario result in a disposition by the corporation of its assets? (2) Is an amount deemed to be paid and received under subsection 84(1) by the issuance by the cooperative of membership shares upon the conversion of shares of the capital stock of the corporation to effect the continuation? (3) Is a dividend deemed to be paid and received under subsection 84(3)? (4) Does subsection 86(1) apply to the conversion of shares for membership shares of the cooperative?

Position: (1) No. (2) No. (3) The amount of the dividend is based on the excess of the amount determined per subsection 84(5) over PUC. (4) Yes.

Reasons: Law and facts, past positions.

Technical Interpretation - Internal

18 May 2022 Internal T.I. 2018-0788761I7 F - Amortissement – Travaux sur un bien loué et F&T

Unedited CRA Tags
1100; 1102(4); 1102(5); annexe II RIR;
Summary Under
Tax Topics - Income Tax Regulations - Regulation 1102 - Subsection 1102(5) - Paragraph 1102(5)(a) - Subparagraph 1102(5)(a)(iii)
rendering of an empty shell suitable for manufacturing constituted substantially changing its nature
Words and Phrases
substantially changed
Summary Under
Tax Topics - Income Tax Regulations - Schedules - Schedule II - Class 8 - Paragraph 8(b)
property does not satisfy the “solely” test in Class 8(b) where it was necessary for the proper functioning of the building
Words and Phrases
solely
Summary Under
Tax Topics - Income Tax Act - Section 13 - Subsection 13(21) - Undepreciated Capital Cost - A
cost of installing property part of that property’s cost
Words and Phrases
cost
Summary Under
Tax Topics - Income Tax Regulations - Regulation 1102 - Subsection 1102(4)
to be improvements or alterations to leasehold interest, property acquisitions must be assimilated to landlord’s property
Summary Under
Tax Topics - General Concepts - Ownership
leasehold improvements are assimilated to the landlord’s property unless the lease specifies otherwise
Summary Under
Tax Topics - Income Tax Regulations - Regulation 1102 - Subsection 1102(5)
building shell was a building or structure/ addition refers to extension of structure
Words and Phrases
building structure addition

Principales Questions: Dans quelle catégorie sont inclus certains biens liés à des montants qu’un contribuable a dépensés lors de travaux sur des biens qu’il loue et qu’il utilise en partie pour des activités de F&T?/ In which class must be included certain property related to amounts expended by a taxpayer in respect of work on leased properties that the taxpayer uses in part for M&P activities?

Position Adoptée: Aucune / None.

Raisons: Commentaires généraux / General comments.

21 September 2021 Internal T.I. 2019-0807491I7 - Subsections 93.1(5) and (6)

Unedited CRA Tags
93.1(5) and (6), 220(2.1) and (3.2)
Summary Under
Tax Topics - Income Tax Act - Section 93.1 - Subsection 93.1(5)
access to ss. 93.1(5) and (6) needed for a US partnership to be considered to have a qualifying interest in a sister Opco paying it interest
Summary Under
Tax Topics - Income Tax Act - Section 220 - Subsection 220(2.1)
waiver under s. 220(2.1) cannot have the effect of permitting the late filing of an election not listed in Reg. 600
Summary Under
Tax Topics - Income Tax Act - Section 220 - Subsection 220(3.2)
no extension can be made under s. 220(3.2) for an election not listed in Reg. 600, or through the back door under s. 220(2.1)

Principal Issues: Whether a coming-into-force election for subsection 93.1(5) and (6) can be considered filed based on a taxpayer's filing position, or late-filed.

Position: No.

Reasons: A taxpayer's filing position cannot fulfil the requirement to make an election. The taxpayer relief provisions do not provide the taxpayer with the ability to make the subsection 93.1(5) coming-into-force election after its due date.