21 January 1991 Ruling 903261 F - Self-directed RRIF

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.

Subject: Self-Directed RRIF

We are sending you the attached correspondence from 24(1) since we do  not have the necessary information to reply to their query.

It is our opinion that the following questions should be addressed in reviewing the situation described by

1)     19(1) states that the mortgage has been discharged and legal documents have been drawn up to that effect.

     The legal documents should be reviewed to determine whether a complete discharge has been given and 24(1) name has been removed from title.

     Are they any other documents indicating that the mortgage has been transferred to the annuitant as a personal debt?

2)     Was this a non-arm's length transaction?

      Has there really been a forgiveness of debt for 24(1)

     Why was no foreclosure taken?

3)     Is there any evidence that the mortgage still exists in the RRIF?

4)     How have the 24(1) paid by the borrower to the annuitant been reported?

     The lawyer for the taxpayer states, in his letter to 24(1) that the taxpayer reported these payments as a withdrawal from the RRSP. Has this been accepted?

5)     Should the amounts received be treated as a capital gain under section 39 of the Income Tax Act (the "Act") or as a benefit under subsection 146(8) of the Act?

24(1)

To allow such a request, we must ascertain whether the mortgage still exists and who has ownership of it.

We have advised 24(1) that we have sent their request to your office for reply.  A copy of our letter is attached.

Should you wish to discuss this question with our office, you can contact Mrs. Maureen Shea-DesRosiers at (613) 957-8953

for DirectorFinancial Industries DivisionRulings Directorate