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.
R.B. Day (613) 957-2136
Nov 25 1988
We are writing in reply to your letter of September 26, 1988, wherein you requested our comments regarding the following specific questions regarding life insurance agents who are considered to be employees, for income tax purposes, and who receive commission income.
1. Will expenses in connection with costs of leasing a personal computer ("PC") to earn commission income be deductible?
2. Alternatively, will capital cost allowance ("CCA") in connection with the acquisition of a PC to earn commission income be deductible?
With respect to the leasing costs referred to in 1 above, it is our opinion that, the portion of the total leasing costs that can reasonably be attributed to the earning of commission income would be deductible in computing that income if the requirements of paragraph 8(1)(f) of the Income Tax Act (the "Act") are otherwise met.
With regard to a claim for CCA on a PC acquired by an agent, it is our view that subparagraph 8(1)(f)(v) and paragraph 8(1)(j) of the Act specifically prohibit the claiming of CCA in these circumstances in that it relates to a capital item not specifically provided for in section 8 of the Act.
In the situation described is [sic] paragraph 3 of your letter, regarding self-employed life insurance agents, it is our view that the amount of the leasing costs or CCA that may be claimed in respect of a PC must be restricted to the business-use portion of such costs or CCA.
A copy of our Departmental pamphlet entitled "Commission Earnings" is enclosed for your information.
Yours truly,
ORIGINAL SIGNED BY P.D. Fuoco for Director Small Business and General Division Specialty Rulings Directorate Legislative and Intergovernmental Affairs Branch
c.c. Toronto D.O.
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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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