cost

31 July 2023 Internal T.I. 2021-0876331I7 - SR&ED ITC Recapture Rules -- summary under Subsection 127(32)

The taxpayer harvests trees, transforms then into logs, and feeds the logs into a new machine being tested for SR&ED purposes. The logs so used in the SR&ED testing are then transformed into finished lumber, which is sold at market prices to an arms-length party. The cost of materials for such SR&ED purposes consists of stumpage fees, harvesting fees, delimbing fees, transportation fees and in-house manufacturing salary and overhead expenses.

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

The taxpayer, which subleased premises on which were “Shells” consisting essentially of foundations, walls and roofs, installed wall and floor coverings and electrical, ventilation and plumbing work and performed other work to make the premises suitable for use in its manufacturing and processing (“M&P”) work, and took the position that the portion of the costs should be included in the capital cost of equipment that was used directly or indirectly primarily for the M&P of goods for sale (the "M&P Properties"), namely, the cost of installing the M&P Properties (the "M&P

By services, 21 February, 2022

Teleglobe Canada Inc. v. R., 2002 DTC 7517, 2002 FCA 408 -- summary under Adjusted Cost Base

In connection with a privatization transaction and at a time that it was still owned by the federal Crown, the taxpayer purchased assets for a stipulated purchase price that was less than the price at which an arm's length purchaser had committed (pursuant to the same agreement under which the asset sale occurred) to purchase the common shares of the taxpayer. Such purchase price excess was reported for income tax purposes by the taxpayer as the cost of cumulative eligible capital (i.e., goodwill).

9 March 2020 External T.I. 2013-0490301E5 F - Société exploitant une EPSP -- summary under Subparagraph 18(1)(p)(ii)

Is a corporation carrying on a personal services business ("PSB") entitled to deduct the following under s. 18(1)(p)(ii): (i) the costs of leasing an automobile provided to an incorporated employee; (ii) interest expense on a loan for the purchase of such automobile; and (iii) capital cost allowance thereon? CRA responded:

[T]here is a benefit to an incorporated employee for purposes of subparagraph 18(1)(p)(ii) where a corporation carrying on a PSB leases an automobile that is used by the incorporated employee, in whole or in part, for personal use.

By services, 13 April, 2020

Lee v. Agence du revenu du Québec, 2020 QCCQ 780, aff'd sub nomine Seica v. Agence du revenu du Québec, 2021 QCCA 1401 -- summary under Tax Shelter

A tax shelter, for the initial (2003/2004) years assessed by the ARQ, entailed the sale by a corporation (“Prospector”) to over 200 investors of software licences. Following an adverse determination by the ARQ for those years, the design of the tax shelter was changed, and for the subsequent years (2005-2010) investors were sold franchises for the non-exclusive right to distribute the software licences in specified territories. After further pressure from the ARQ, the notes issued by investors for the franchises were full recourse rather than limited recourse notes.

7 October 2011 Roundtable, 2011-0399441C6 F - T1135 - coût indiqué d'une assurance-vie -- summary under Paragraph (f)

The definition of reporting entity in s. 233.3 references its “cost amount” of specified foreign property. Is the cost amount of an interest in a life insurance policy the adjusted cost basis ("ACB”) as defined in s. 148(9), or the premiums paid? After noting that para. (f) of the s. 248(1) “cost amount” definition referenced the cost to the taxpayer of the property as determined for the purpose of computing the taxpayer’s income, CRA stated:

By services, 22 August, 2018

Devon Canada Corporation v. The Queen, 2018 TCC 170 -- summary under Eligible Capital Expenditure

Two public-company predecessors by amalgamation of the taxpayer made cash payments for the surrender by employees of their options previously granted to them under employee stock option plans. Such surrenders occurred (and were previously contemplated in agreements with purchaser corporations to occur) in connection with the acquisition of all their shares by unrelated corporate purchasers.

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