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.
C. R. Bowen (613) 957-2094
MAR 10 1989
We are writing in reply to your letter of January 9, 1989, wherein you requested our comments on the eligibility of a film for inclusion in class 12 of Schedule II of the Income Tax Regulations (the "Regulations").
Facts
The facts of the situation as we understand them are as follows:
XXXX
Our Comments
Pursuant to the amendments to the Regulations which were passed on December 22, 1988, a certified production acquired after 1987 is, subject to certain transitional rules, included in class 10(w) of Schedule II of the Regulations. It is therefore, our opinion that the above film will not be eligible to qualify under paragraph (n) of class 12.
In order to do so, it would have been necessary, inter alia for the partnership to have either acquired
1) the rights to the film in 1987 and have completed the principal photography of the film by June 30, 1988, or
2) the film pursuant to a) an agreement in writing entered into by the partnership before June 18, 1987, or b) a prospectus, preliminary prospectus, registration statement or offering memorandum filed before June 18, 1987 with a public authority in Canada where the document was required to be filed before any trade in securities can commence.
A certified production (as defined in subsection 1104(2) of the Regulations) acquired by a partnership after 1987 which does not meet the above transitional provisions, will be a class 10(w) property eligible for capital cost allowance at a 30 per cent rate on a declining balance. The partnership will also be eligible for an additional allowance in respect of the certified production equal to the lesser of the undepreciated capital cost of the certified production and the net income for the year from all certified productions owned by the partnership.
We trust these comments will be of assistance.
Yours truly,
ORIGINAL SIGNED BY
for Director Small Business & General Division Specialty Rulings Directorate Legislative and Intergovernmental Affairs Branch
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© Her Majesty the Queen in Right of Canada, 1989
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© Sa Majesté la Reine du Chef du Canada, 1989
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