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: The appropriate treatment under the Act of certain amounts which may be forwarded by a municipal natural gas utility to its customers.
Position: Unable to provide the technical interpretation requested.
Reasons: Confirmation as to income tax consequences of proposed transactions can only be provided in the context of a request for an advance income tax ruling.
2002-012874
XXXXXXXXXX A.A. Cameron
(613) 347-1361
April 3, 2002
Dear XXXXXXXXXX:
We are writing in response to your letter to our Audit Directorate of March 12, 2002, which was referred to us for reply.
The Town of XXXXXXXXXX (the "Town") became eligible to receive funds as a result of the sale of certain assets by a corporation from which the Town purchased natural gas prior to distributing the gas to the Town's residential and business customers. Information provided indicates that these funds arise from a ruling of the XXXXXXXXXX and represent compensation for higher gas costs forecast due to the sale of the above assets. You have requested our written ruling with regard to the treatment under the Income Tax Act (the "Act") if the Town chooses to distribute these funds to its gas customers.
Confirmation as to the income tax consequences of proposed transactions is only provided in the context of a written request for an advance income tax ruling. Nevertheless, we can provide you with the following general comments.
Amounts the Town may distribute to a customer who uses your gas in the course of earning income from a business or property, will be included in computing income for tax purposes. Amounts received from the Town by an individual who uses your gas strictly for personal rather than business or employment purposes, will not be included in the determination of the individual's income for tax purposes.
If you have any questions concerning this matter, please contact the writer.
Yours truly,
for Director
Reorganizations and Resources Division
Income Tax Rulings Directorate
Policy and Legislation Branch
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