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 the cost of acquiring easements would be included in CRCE under 1219(1)(c).
Position: Possibly.
Reasons: Easements are not precluded from inclusion in CRCE. It will depend on the terms of the easement agreement.
XXXXXXXXXX 2002-014701
David Shugar
(613) 957-2134
July 10, 2002
Dear XXXXXXXXXX:
Re: Canadian Renewable and Conservation Expenses ("CRCE")
This is in reply to your letter of June 14, 2002 in which you requested a technical interpretation as to whether expenditures in respect of the acquisition of easements to private land would qualify as CRCE pursuant to paragraph 1219(1)(c) of the Income Tax Regulations (the "Regulations").
The particular situation outlined in your letter is a factual one, involving a specific taxpayer. As explained in Information Circular 70-6R5, it is not this Directorate's practice to comment on proposed transactions involving specific taxpayers other than in the form of an Advance Income Tax Ruling. Should your situation involve a specific taxpayer and a completed transaction, you should submit all relevant facts and documentation to the appropriate Tax Services Office for their views. However, we are prepared to offer the following general comments which may be of assistance.
It is our view that the cost of acquisition of an easement is not precluded from being included in CRCE under paragraph 1219(1)(c) of the Regulations. However, the terms and conditions of the particular easement agreements would have to be examined before a final determination could be made.
The above comments are of a general nature and, thus, do not apply to any proposed or completed transactions. Should you wish to request an advance income tax ruling on the proposed implementation of a particular plan, we would be pleased to consider it.
We trust our comments will be of assistance to you.
Yours truly,
Section Manager
for Director
Reorganizations and Resources Division
Income Tax Rulings Directorate
Policy and Legislation Branch
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