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
NOV 23 1988
Dear Sirs:
Re: Broadcasting License
This is in reply to your letter of October 19, 1988 requesting our confirmation of the classification of a broadcasting licence to be acquired in connection with a transaction by which a corporation will be selling to another corporation, the assets of a ratio station. Included among the assets to be sold is the broadcasting licence for the station issued by the Canadian Radio Television and Telecommunication Commission ("CRTC").
You ask that we confirm that the said CRTC broadcasting licence is a depreciable property includable in Class 14 of Schedule II of the Income Tax Regulation for capital cost allowance purposes.
Our Comments
It is our understanding that CRTC licences are not transferable. Thus it would appear that an amount is to be paid by the purchaser on the expectation that the CRTC will issue a new licence for the station. As indicated in paragraph 13 of Interpretation Bulletin IT-477 such an amount will not be a depreciable property as the purchaser is paying for mere expectation of being granted a licence. The payment in these circumstances may, however, qualify as a eligible capital expenditure.
We trust 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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