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 CCRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ADRC.
Principal Issues: Whether a proposed transaction is an adventure or concern in the nature of trade.
Position: Unable to provide a ruling.
Reasons: As stated in paragraph 15(e) of IC 70-6R4, we will not to issue a ruling when the major issue is whether a transaction should be viewed as being on account of income or capital.
XXXXXXXXXX J. Gibbons, CGA
2001-011034
January 28, 2002
Dear XXXXXXXXXX:
Your letter of September 17, 2001, to the Shawinigan-Sud Tax Centre was forwarded to us for reply. In your letter, you requested a ruling on whether a proposed disposition of property by your client is on account of income or capital.
Since your situation relates to actual proposed transactions, we refer you to our policy set out in Information Circular 70-6R4. This circular explains, among other things, that it is our policy not to provide written confirmation of the tax implications inherent in particular transactions unless an advance ruling request is submitted in the manner set out in that circular. Further, it should be noted that, as indicated in paragraph 15(e) of the circular, we are unable to consider a ruling request when the major issue is whether a transaction should be viewed as being on account of income or capital. There are, however, publications produced by the Canada Customs and Revenue Agency which provide some guidance on what should be considered in establishing whether a particular gain is on account of capital or income.
We suggest that you review IT-218R, "Profit, capital gains and losses from the sale of real estate, including farmland and inherited land and conversion of real estate from capital property to inventory and vice versa," and IT-459, "Adventure or concern in the nature of trade". These publications may be found on our website which is located at www.ccra-adrc.gc.ca. We trust that they will be of some assistance to you in addressing your issue.
Yours truly,
John Oulton, CA
for Director
Business and Partnerships Division
Income Tax Rulings Directorate
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