27 July 1989 Income Tax Severed Letter 58247 F - Home Relocation Loan

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.

July 27, 1989

19(1)

Re:  Home Relocation Loan

This is in reply to your letter dated June 6, 1989 wherein you requested our opinion on the tax treatment of a home relocation loan in circumstances which may be summarized as follows.

24(1)

You have requested our confirmation that if you replace the original home relocation loan with the revised home relocation loan, you will continue to be entitled to claim the appropriate deduction pursuant to paragraph 110(1)(j) of the Act in respect of the benefit included in your income under section 80.4 of the Act.

Based on the assumption that the original loan qualifies as a home relocation loan within the meaning of subsection 248(1) of the Act and that you are entitled to claim the appropriate deduction under paragraph 110(1)(j) of the Act in respect of the benefit included in your income under section 80.4 of the Act, we offer the following comments.

It is our opinion that by virtue of the provisions of subsection 110(1.4) of the Act, the home relocation deduction provided for under paragraph 110(1)(j) of the Act would continue to be available to you for the balance of the five-year period. However the deduction would be limited to the amount of the benefit included in income under section 80.4 of the Act in respect of the balance outstanding on the original home relocation loan at the time of the repayment.

Subsection 110(1.4) of the Act provides that for the purposes of paragraph 110(j), a loan received by a taxpayer that is used to repay a home relocation loan. This provision permits a taxpayer to replace a home relocation loan with a new loan but prohibits him from extending the five-year period in which the deduction authorized by paragraph 110(1)(j) of the ACT will be available.

The foregoing represents our considered opinion of the law as it applies generally, but this is not a ruling and is not binding upon the Department.

Yours truly,

for DirectorSmall Business and General DivisionSpecialty Rulings DirectorateLegislative and IntergovernmentalAffairs Branch