Income Tax Severed Letters - 1996-07-26

Principal Issues:

Whether a specified member's partnership interest continues to be an excluded interest after the general partnership transfers it commercial property to a limited partnership and becomes the limited partner of the new partnership.

Position:

No.

Reasons:

Principales Questions:

1- Quel est le sens du l'alinéa 104(18)d) 2- 3 bénéficiaires (1 de + 21 ans et 2 mineurs) sont bénéficiaires d'une fiducie inter-vivos, l'acte prévoit une discrétion pour le paiement des revenus au bénéficiaires de + 21 ans max 1/3 et partie non payée doit être partagée en parts égales aux 2 ben mineurs en augmentant leur 1/3 respectif - 104(18) peut-il s'appliquer

Position Adoptée:

Principal Issues:

clarify rules on rrsp held mortgage bonds administered through a trust

Position:

routine explanation of normal structure

Reasons:

Principal Issues:

Is the payment of RRSP expenses by annuitant or by a third party a gift

Position:

If paid by annuitant its a premium if paid by a third party it would be a gift.

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.

		3-962200
XXXXXXXXXX		A. St-Amour

A l'attention de XXXXXXXXXX

Le 4 juillet 1996

Monsieur,

Objet: Demande de décision anticipée
XXXXXXXXXX

La présente fait suite à votre lettre du 18 juin 1996, dans laquelle vous nous demandiez des décisions anticipés.

Position Adoptée:

Principal Issues:

how is conversion feature on securities allocated

Position:

where conversion feature which is not severable no part of issue price can be allocated

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.

Ministère du Patrimoine canadien
Bureau de certification des produits
 audiovisuels canadiens							5-961500
4ième étage		J. Desparois
15, rue Eddy
Bureau 150
Hull (Québec)
K1A 0M5

A l'attention de Lucie Marion

Le 27 juin 1996

Mesdames,
Messieurs,

Principal Issues:

Tax consequences where shares are transferred to a spouse or children on death.

Position:

May be transferred on tax-free basis provided certain conditions are met.

Reasons:

Principal Issues:

retiring allowance followed by part time employment

Position:

routine reply provided

Reasons:

Principal Issues:

Whether person on leave of absence may receive income through an incorporated business which charges fees to the employer.

Position:

General explanation of 6801(a)(iii).

Reasons: N/A

Principal Issues:

Is the widow's (widower's) discretionary share of the accumulating income of a trust for a year determined under paragraph 2800(3)(f) of the Regulations. In 5-9737 dated May 8, 1990, we indicated that paragraph 2800(3)(f) rather than 2800(3)(e) would apply in determining the widow or widower's share of the accumulating income. This position appears to have been taken because in the particular situation we were asked to consider, the widow had remarried and was referred to as the "former spouse" of the settlor.

Position:

Confirmed our position in 5-9737 as it related to the situation on which that reply was based. However, it was also indicated that in a situation where a widow or surviving spouse had not remarried, paragraph 2800(3)(e) may apply in determining the widow's share of the accumulating income.

Reasons:

Principal Issues:

Whether, where all of the assets of a family farm corporation have been sold and converted to cash, the shares of the corporation continue to qualify as "shares of the capital stock of a family farm corporation" within the meaning of subsection 70(10) of the Act.

Position:

Shares no longer qualify as such.

Reasons:

Principal Issues:

1)whether GICs issued by bank or credit union and denominated in foreign currency are qualified investment for RRSP;

2)why are put options not qualified investments for RRSP.

Position:

1)Yes for banks; credit unions can't issue GICs.

2)put options are not qualified investments.

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.

962010
XXXXXXXXXX M.P. Sarazin

Attention: XXXXXXXXXX

June 19, 1996

Dear Sirs:

Re: Deferred Salary Leave Plan (the "Plan")

Principal Issues:

An individual co-owns a residence in B.C. with his parents. In 1994 the individual moved to Ontario in connection with a employment position. Can the individual be considered to "ordinarily inhabit" the residence for 1994 and subsequent years?

Position:

Yes, for 1994. It is our general view that the individual would not be able to designate the residence for 1995 and later years unless it is occupied for a short time as set out in paragraph 12 of IT-120R4. Occasional visits by the individual to see the parents would not result in the individual being considered to have ordinarily inhabited the housing unit.

Reasons:

Principal Issues:

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.

	           	      				961806
XXXXXXXXXX				                   Cal Brown
(613) 957-8980

Attention: XXXXXXXXXX

June 6, 1996

Dear Sirs:

Re: Canadian Film or Video Production Tax Credit

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.

5-953251
XXXXXXXXXX Michel Lambert
(613) 957-8953

A l'attention de XXXXXXXXXX

Le 27 mai 1996

Mesdames, Messieurs,

Objet: Application du paragraphe 70(6) de la Loi
Actions ordinaires convertibles en actions privilégiées

Principal Issues:

variations of trusts - do they cause resettlement

Position:

depends on facts of variation

Reasons: