18 June 2002 External T.I. 2002-012314A - RESEARCH ACCOUNTS

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:

Application of subsection 5(1), 56(2) or 6(11) in a situation where an academic staff member at the University of XXXXXXXXXX waives his or her entitlement to directly receive honorarium for assuming extra duties, in lieu of the amount being deposited in a research account.

Position:

Forwarding a copy of TSO letter to taxpayer - The amounts reimbursed to Professors from the research account constitute salary, wages or other remuneration in the taxation year in which they are received, pursuant to subsection 5(1) of the Act, augmented by the deeming provision in subsection 6(3) of the Act, in particular, paragraphs (a), (b) and (d).

Reasons:

See 2001-011587.

XXXXXXXXXX 2002-012314

R. Hewlett, B.Comm.

June 18, 2002

Dear XXXXXXXXXX:

Re: Research Accounts in Lieu of Honoraria - University of XXXXXXXXXX

Further to our meeting of June 5, 2002, we are forwarding a copy of our memorandum to the XXXXXXXXXX Tax Services Office finalizing our views on the above-noted issue. As discussed with you in our meeting, it is our view that the amounts reimbursed to Professors from the research account constitute salary, wages or other remuneration in the taxation year in which they are received, pursuant to subsection 5(1) of the Income Tax Act.

Yours truly,

John Oulton, CA
for Director
Business and Partnerships Division
Income Tax Rulings Directorate
Policy and Legislation Branch

Enclosure