17 December 1990 Internal T.I. 901807 F - Awards and Prizes

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)

December 17, 1990

Dear Sirs:

This is in reply to your letter of August 3, 1990 concerning whether certain prizes or awards are "prescribed prizes" for the purposes of subparagraph 56(1)(n)(i) of the Income Tax Act (the "Act"). You have also requested information concerning the filing of information returns in respect of the awards and prizes.

The thirteen prizes and awards referred to in your letter are granted by the Canada Council pursuant to its objective of fostering and promoting artistic and scientific activity throughout Canada. The prizes and awards are set out below:

(a)     Governor Generals Literary Awards

(b)       Virginia P. Moore Prize

(c)       Healey Willan Prize for Amateur Choirs

(d)       Jules Leger Prize for New Chamber Music

(e)       Petro-Canada Award for Media Arts

(f)       Jacqueline Lemieux Prize

(g)       Duke and Duchess of York Prize in Photography

(h)       Sylva Gelber Foundation Awards

(i)       Canada-Japan Book Award

(j)       Joseph S. Stauffer Prizes

(k)       Victor Martyn Lynch-Staunton Awards

(l)       Sir Ernest MacMillan Memorial Prize in Choral Conducting

(m)       Jean-Marie Beaudet Award

For the purposes of subparagraph 56(1)(n)(i), Regulation 7700 describes a prescribed prize as one that is recognized by the general public and that is awarded for meritorious achievement in the arts, sciences, or service to the public but does not include an amount that can reasonably be regarded as having been received as compensation for services rendered or to be rendered.

You have advised that these prizes and awards are not received as compensation for services rendered or to be rendered by the recipients and are not received in the course of earning business property, office or employment income. These awards are for achievements in literature, music, media arts, visual arts and dance. The awards described in (j) to (m) above are publicized in a bulletin available to the public and in a brochure entitled "Grants to Artists". For the award in (i), information is included in a bulletin available to the public and a press release is issued. A news or press release is issued for all the other awards and prizes.

It is our view that these awards and prizes are prescribed prizes for the purposes of subparagraph 56(1)(n)(i) of the Act.

You indicate that IT-257 and IT-75R2, do not reflect the latest amendments to the Act and Regulations and we will advise our Publications Division of your comments.

Paragraph 210(2)(a) of the Income Tax Regulations has recently been amended to specially exclude a prescribed prize. Accordingly, such prizes are not required to be reported in an information return. If can error in reporting has occurred the issuer should contact the local District Office.

We trust these comments will be of assistance.

Yours truly,

for DirectorBusiness and General DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch

c.c.      Mr. R. Shultis, Publications Division Mr. A. Lagacé, Returns Processing Division