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: What can a taxpayer do to ensure that the interest paid on an equalization payment is reported by an ex-spouse?
Position: Under our self-assessment system, the onus is on taxpayers to file their income tax returns accurately. There are also review processes in place to ensure the integrity of our tax system.
Reasons: There is no requirement for taxpayers to report the payment of this type of income on an information return.
XXXXXXXXXX 2002-013350
J. Gibbons, CGA
May 6, 2002
Dear XXXXXXXXXX:
We are replying to your letter dated March 11, 2002, concerning the interest you paid on an equalization payment to your ex-spouse. You are concerned that she may not include the amount for income tax purposes.
Our comments are of a general nature only since we cannot confirm the tax implications of particular transactions unless the transactions are proposed and are the subject matter of an advance ruling request submitted in the manner set out in Information Circular IC 70-6R4.
As you correctly determined, the T4 or the T5 Supplementary may not be used to report the interest you paid to your ex-spouse on the equalization payment. Under our self-assessment system, the onus is on taxpayers to file their income tax returns accurately. As you are likely aware, there are review processes in place to ensure the integrity of our tax system.
We trust that these comments will be of assistance.
Yours truly,
John Oulton, CA
for Director
Business and Partnerships Division
Income Tax Rulings Directorate
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