Income Tax Severed Letters - 2005-09-23

Ruling

Unedited CRA Tags: 
20(1)(c)

2005 Ruling 2005-0130541R3 - Participating Interest -- attach -- Paragraph 20(1)(c)

Interest deduction rulings given with respect to debt on which there is base interest, plus additional interest equal to the lesser of the taxable...

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Principal Issues: Can the Additional Interest paid or payable be deducted under paragraph 20(1)(c) provided it does not exceed a reasonable amount?

Position: YES

Reasons: IT-533, par 2 - not an equity investment.

Technical Interpretation - External

Principal Issues: The taxpayer required clarification on whether the calculation of a gain on the disposition of a policy with a "return of premium" benefit is correct.

Position: Appears correct.

Reasons: Our review of relevant provisions and information provided by the insurer and taxpayer.