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 Issues: An individual owns a house situated on land XXXXXXXXXX . As a result of XXXXXXXXXX , the land was subjected to pollution. As the XXXXXXXXXX company has offered to purchase the property, we have been asked about capital gains.
Position: As the available information was very limited, we were not able to provide any specific comments. However, we did send a copy of Interpretation Bulletin IT-120R5 as well as some other publications.
Reasons: See Principal Issues and Reasons
XXXXXXXXXX 2001-009815
M. Eisner, CA
September 17, 2001
Dear XXXXXXXXXX:
Re: Disposition of Property
This is in reply to your letter of August 22, 2001, concerning the above-noted subject. You have indicated that you own a house situated on land XXXXXXXXXX. As a result of XXXXXXXXXX, the land was subjected to pollution. As the XXXXXXXXXX company has offered to purchase the property, you are concerned about a capital gain you may realize if you dispose of the property.
Written confirmation of the tax implications inherent in particular transactions is given by this Directorate only where the transactions are proposed and are the subject matter of an advance income tax ruling request submitted in the manner set out in Information Circular 70-6R4. Where the particular transactions are completed, the enquiry should be addressed to the relevant Tax Services Office. However, we are prepared to provide some comments, which are general in nature.
The determination of the tax treatment of amounts you would receive on the disposition of the above property is a question of fact, and we have not been provided with sufficient facts to provide you with definitive comments on this issue. However, for your general information, we have enclosed a copy of the pamphlet entitled "Capital gains" and Interpretation Bulletin IT-218R "Profits, Capital Gains and Losses from the Sale of Real Estate" which may be of some assistance to you.
We note that, in some cases, an individual can use the principal residence exemption to reduce or eliminate any capital gain otherwise occurring, for income tax purposes, on the disposition of a property if the property qualifies as the individual's principal residence. In this regard, we have enclosed a copy of Interpretation Bulletin IT-120R5 "Principal Residence" which discusses the principal residence exemption.
If you require further assistance, you may contact your local Tax Services Office.
We trust that our comments are of assistance to you.
Yours truly,
Milled Azzi, CA
for Director
Business and Partnerships Division
Income Tax Rulings Directorate
Policy and Legislation Branch
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