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: Confirmation of the steps taken in file XXXXXXXXXX.
Position: See below.
Reasons: See below.
January 8, 2014
Re: Correction of an Addition to the Undepreciated Capital Cost of an Asset
We received your letter dated April 8, 2013, concerning a situation involving an unnamed taxpayer. In your letter you described the unnamed taxpayer as a farmer who reports his income on a cash basis. The letter also indicated that the taxpayer had purchased a capital asset (a tractor), but had erroneously under-reported the purchase price of the asset on the taxpayer's income tax return since part of the purchase price had not been paid at the time it was acquired. You asked us how to correct this error.
Based on the information provided to us, it was our understanding that the taxation year in which the asset was acquired was not statute-barred. In response to your letter, we contacted you by phone and verbally advised you how the taxpayer could request an amendment to his prior years' income tax returns to report the additional purchase price of the asset and revise the claims for capital cost allowance.
During a telephone conversation on January 6, 2014, you informed us that the taxpayer's accountant had requested the necessary amendments to the taxpayer's prior years' income tax returns as a result of the information we had provided to you.
We trust that these comments will be of assistance.
Michael Cooke, C.P.A., C.A.
Business Income and Capital Transaction Section
Business and Employment Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch
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