23 May 2006 Ministerial Correspondence 2006-0180961M4 - Deduction from Income

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

Principal Issues: Whether a deduction from income is available to parents that support income of their child with monetary gifts.

Position: No

Reasons: No such deduction available under Section 8 or 20 of the Income Tax Act.

May 23, 2006

XXXXXXXXXX

Dear XXXXXXXXXX:

Mr. Michel Dorais, Commissioner of the Canada Revenue Agency (CRA), has asked me to reply to your letter received on March 29, 2006, concerning whether you can deduct the financial support you have given to your daughter while she is attending university.

I must confirm that the Income Tax Act does not allow a deduction for such financial support. However, it does permit the child to transfer any unused education and tuition tax amounts to the parent, who can then use it when calculating his or her non-refundable tax credits for the year.

Detailed information on the transfer of education and tuition amounts is contained in the T1 General Income Tax And Benefit Guide 2005. This guide is available on the CRA's Web site at www.cra.gc.ca or at your local tax services office, where you can also get further assistance on your eligibility to claim the credit. During tax filing season, you can also obtain a copy of the guide at your local post office.

I appreciate the opportunity to respond to your concerns.

							Sincerely,

							Ed Gauthier
							Deputy Assistant Commissioner
							Legislative Policy and
							  Regulatory Affairs Branch

c.c.: Minister's Office
Political Assistant

Darlene Green
(613) 957-2082
2006-018096
April 18, 2006