17 October 1990 External T.I. 9006635 F - Non-profit Organization

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.

19(1)

October 17, 1990

Dear Sirs:

Re:  24(1) Advance Income Tax Ruling

This is in reply to your letters of August 24, and October 1, 1990 requesting a ruling on behalf of the 24(1) which revised the ruling request submitted by 24(1) on May 4, 1990. We also make reference to meetings in Ottawa on August 16 and September 18, 1990 as well as to various telephone conversations during those dates and culminating in our conversation of October 11, 1990.

As discussed with you on October 11, 1990 we are unable to rule on your revised ruling request due to the lack of an actual proposed transaction. We would also not normally rule where a proposed transaction is to be completed at some indefinite future time. We have, thus, closed our file on this matter.

Although we are unable to rule on your request we provide the following comments for your information.

Our Comments

In our view, where an organization that has non-profit status reacquires memberships or, as in the case of a stock exchange seats at an amount greater than cost and the reacquisition is not financed out of capital gains of the organization it would be making income available to its members in contravention of paragraph 149(1)(1) of the Income Tax Act. Where this is the case it would likely lose its status as a non-profit organization for purposes of the Income Tax Act.

The $325.00 deposit submitted by 24(1) will be returned shortly under separate cover.

Yours truly,

B.W. DathDirectorBusiness and General DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch