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: 24(1) Trade in Securities
This is in reply to your memorandum of July 18, 1991, wherein you request a opinion as to whether 24(1) would be considered a trader in account receivables. Your request has been referred to our Division for a reply.
We have reviewed your submission and documentation as well as the submission made by 19(1) on behalf of 24(1)
24(1)
The assignment of account receivables to a credit or finance company is a financing technique employed by numerous businesses and is not indicative of a trading activity. Conversely, we would not view the holding of receivables which were acquired in the ordinary course of business or upon the acquisition of a business as a going concern as indicative of a trading activity. In our view, to term someone a trader or dealer in receivables, it would be necessary to demonstrate a pattern of purchasing receivables as such.
In conclusion we do not consider the evidence in the documentation or submissions indicative of 24(1) being a trader in account receivables. We would regard the comments in paragraph 7 of IT-188R as applicable.
We trust these comments are of further assistance and would be please to offer you may require.
for DirectorBusiness and General DivisionRulings Directorate Legislative and Intergovernmental Affairs Branch
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