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.
| |
May 28, 1990 |
| Special Audits Division |
Financial Industries Division |
| E.H. Gauthier |
B.G. Dodd |
| Director |
957-9769 |
| Attention: M. Loveday |
| Specialized Industries |
| Section |
File No. 900317 |
Subject: Burning Cost Provision 24(1)
We are writing in reply to your memorandum dated April 3, 1990 concerning the March, 1990 submission by Mr. G. Pottage of the Kitchener District Office dealing with the above issue.
Mr. Pottage's submission includes an examination of a reinsurance agreement, a definition of the burning cost provision and a discussion of its deductibility under the Income Tax Act as well as a detailed commentary on 24(1)
We are in general agreement with Mr. Pottage. In particular, we confirm the Department's position as set on page 3 of Mr. Pottage's submission regarding the non-deductibility of the burning cost provision. As added support for this position, at least insofar as the paragraph 18(1)(e) aspect is concerned, we refer you to the case of North American Automobile Association Ltd. v. M.N.R. 63 DTC 909.
We hope this will be of assistance.
DirectorFinancial Industries DivisionRulings Directorate
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