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.
Principal Issues: Does a bank report the foreign exchange gains and losses arising from lease transactions in the ordinary course of business on account of income?
Position: Yes
Reasons: IT-95R, Question #19 at the 1995 TEI Conference, Normal business activities.
XXXXXXXXXX 2004-010443
XXXXXXXXXX, 2004
Dear XXXXXXXXXX:
Re: Supplementary Advance Income Tax Ruling -XXXXXXXXXX
This is in reply to your facsimile letter of XXXXXXXXXX wherein you advised us of changes to the proposed transactions described in our letter of XXXXXXXXXX, 2004, our file number 2004-008527 (the "Ruling").
As requested, the following changes are made to the Ruling:
Paragraph 8(a) is amended to replace the last words "approximately $US XXXXXXXXXX" with the words "approximately $US XXXXXXXXXX".
Paragraph 8(c) is deleted and replaced with the following:
(i) Funding of $US XXXXXXXXXX from XXXXXXXXXX on a XXXXXXXXXX year lease with a residual balloon payment of $US XXXXXXXXXX at a notional interest rate of LIBOR plus XXXXXXXXXX basis points (i.e. LIBOR plus XXXXXXXXXX%)
(ii) Funding of $US XXXXXXXXXX from XXXXXXXXXX on a XXXXXXXXXX year lease with a residual balloon payment of $US XXXXXXXXXX at a notional interest rate of LIBOR plus XXXXXXXXXX basis points (i.e. LIBOR plus XXXXXXXXXX%)
(iii) Funding of $US XXXXXXXXXX from XXXXXXXXXX on a XXXXXXXXXX year lease with a residual balloon payment of $US XXXXXXXXXX at a notional interest rate of LIBOR plus XXXXXXXXXX basis points (i.e. LIBOR plus XXXXXXXXXX%)
(iv) Funding of $US XXXXXXXXXX from XXXXXXXXXX on a XXXXXXXXXX year lease with a residual balloon payment of $XXXXXXXXXX at a notional interest rate of LIBOR plus XXXXXXXXXX basis points (i.e. LIBOR plus XXXXXXXXXX%)
Paragraph 8(d) is amended to omit the words ... "or at the end of a XXXXXXXXXX years with XXXXXXXXXX% residual value."
We confirm that the Ruling, as amended herein, remains binding on the Canada Revenue Agency subject to the same limitations and qualifications set out in the Ruling.
Yours truly,
XXXXXXXXXX
for Director
Financial Industries Division
Income Tax Rulings Directorate
Policy and Planning Branch
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