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.
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.
PRINCIPAL ISSUE:
Whether recapture on the sale of a building that produced rental income that was deemed, by subsection 129(6), to be active business income, will constitute active business income.
Position TAKEN:
Recapture will constitute active business income.
Reasons FOR POSITION TAKEN:
Departmental policy.
5-942150
XXXXXXXXXX C.Chouinard
Attention: XXXXXXXXXX
October 21, 1994
Dear Sir:
Re: Subsection 129(6) of the Income Tax Act and Recapture of Capital Cost Allowance
We are writing to inform you that it has recently come to our attention that our response to your October 26, 1989 letter, wherein you requested our comments regarding the application of subsection 129(6) of the Income Tax Act (the "Act") to recaptured capital cost allowance, did not reflect the Department's position.
As you may recall, in our letter of December 28, 1989, we expressed the opinion that subsection 129(6) of the Act would not deem recaptured capital cost allowance to be active business income. Our position at the relevant time, which position remains unchanged, was that, where subsection 129(6) of the Act applied to deem rental income received by a corporation to be active business income, any recapture on the sale of the building that produced the rental income constitutes active business income.
We apologize for any inconvenience this rectification may cause.
Yours truly,
R. Albert
for Director
Business and General Division
Rulings Directorate
Policy and Legislation Branch
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