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.
G. Thornley (613) 957-2101 MAY 3 1988
Dear Sirs:
Re: Subsection 1100(2) of the Income Tax Regulations (the "Regulations")
This is in reply to your letter of March 10, 1988 requesting that we confirm your technical interpretation of the application of Regulation 1100(2).
It is your view that Regulation 1100(2) will not apply to reduce the amount of capital cost allowance otherwise available on the cost of capitalized repairs to a property included it class 8 where the property in question is acquired in one fiscal period and the capitalized repairs take place in a subsequent fiscal period.
Our Moments
We do not agree, as indicated by you, paragraph (a) of Regulation 1100(2) applies in respect of amounts added, by virtue of subparagraph 13(21)(f)(i) of the Act in respect of property acquired in the year, to the undepreciated capital cost to the taxpayer of property. Undepreciated capital cost includes the capital cost to the taxpayer of each depreciable properly of that class acquired before the time of making the calculation under paragraph 13(21)(f) of the Act. The coat of significant repairs or major alterations that are capitalized are considered an acquisition in the awe sense that an addition in a subsequent period, to a previously purchased building would be.
We trust that our comments will prove helpful.
Yours truly,
ORIGINAL SIGNED BY Wm. R. McColm for Director Small Business and General Division Specialty Rulings Directorate Legislative and Intergovernmental Affairs Branch
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© Her Majesty the Queen in Right of Canada, 1988
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© Sa Majesté la Reine du Chef du Canada, 1988
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