6 October 1989 Administrative Letter 58646 F - Deposit Insurance Corporation

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.

October 6, 1989

Dear Sirs:

This is reply to your letter dated September 7, 1989 with respect to the tax treatment of an amount received by a "deposit insurance corporation" ("DIC"), as defined in paragraph 137.1(5)(a) of the Income Tax Act (the "Act"), in repayment of a grant, subsidy, or other assistance which a DIC had previously provided to a "member institution", as defined in paragraph 137.1(5)(b) of the Act.

Paragraph 137.1(4)(a) of the Act ensures that assistance provided by a DIC to a member institution is not deductible by the DIC in computing its income.  However, when the member institution repays such assistance there is no specific provision in the Act either excluding or requiring the inclusion of such an amount when computing the income of the DIC.

In our opinion amounts received by a DIC from a member institution in repayment or reimbursement of non-deductible assistance would not be included in computing the DIC's income.

We hope our comments are of assistance to you.

Yours truly,

for DirectorFinancial Industries DivisionRulings Directorate