26 January 1990 Income Tax Severed Letter AC408554 - Capital Gain - Share Transaction

January 26, 1990

FROM - HEAD OFFICE Technical Interpretations Division Esta Mikhail Tel. (613) 952-3606

TO - EDMONTON DISTRICT OFFICE H.S. Lee Director

SUBJECT: 19(1)

We have been asked by     19(1)     Member of Parliament, the
Honourable David Kilgour, to consider certain taxes payable by
them arising from a gain on the sale of certain shares in 1981
for a remission of tax under the Financial Administration Act. 
We enclose copies of all correspondence that we received relating
to this matter for your perusal.

In order that the Remission Committee may be able to consider the matter and apply the guidelines in TOM 2263.22, would you kindly submit to this Division a report containing the information required under TOM 2263.24(2)(A) to (G).

Since we are not familiar with     19(1)     situation, we do not
know whether each case should be considered as an "extreme
hardship" case (TOM 2263.22(2)(A)) or as a "financial setback"
case (TOM 2263.22(2)(C)).  If in your judgement the case is one
of "extreme hardship" would you kindly consider whether the
comments in TOM 2263.22(5) apply.  If the case is one of
"financial setback" would you kindly consider whether the
comments in TOM 2263.22(12) apply.  In particular, we would
appreciate being advised on the following matters:

     -    details of the gain on the sale of shares and how it
          was reported for income tax purposes;

     -    were the taxpayers entitled to claim a reserve in
          respect of the gain and the reason the reserve was not
          claimed;

     -    amount of both the federal and provincial tax
          applicable to the gain to be considered for remission
          assuming the taxpayer are judged eligible;

     -    what are the circumstances on which to judge whether a
          denial of the remission would represent hardship or a
          financial setback caused by events beyond the
          taxpayers' control;

     -    amount of unpaid taxes as of now in respect of the
          taxation year in which the gain was originally
          reported; and

     -    do the remission guidelines described in TOM
          2263.23(2)(B), (C) or (D) apply to deny a remission.

Please include     19(1)     tax return, copies of correspondence
and notes of conversations with the taxpayers and any other facts
and documents relating to the issue of remission of tax.

Thank you for your assistance in this matter.

Bernhard Buetow Acting Director Technical Interpretations Division Legislative and Intergovernmental Affairs Branch

Enclosure

STALLED