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.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department. Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
SUBJECT: RESEARCH GRANT SECTION: 56(1)(o)]
signed by Otto Jelinek April 28, 1992
MINISTER/DM'S OFFICE Y.S. 92-2542 T
ADM'S OFFICE
CENTRAL RECORDS
RETURN TO RULINGS, ROOM 303, MET. BLDG.
AUTHOR
SECTION CHIEF
D.O. (?)
RESEARCH FILE
SUBJECT OR CORPORATE CASE FILE
XXX
I am responding to your letter of March 17, 1992, in which you asked for confirmation of the correct tax treatment of payments that will be received by individuals pursuant to the recently enacted Centennial Flame Research Award Act.
It is my understanding that the purpose of the legislation is to authorize the payment of funds, derived from money collected from the Centennial Flame fountain as well as other private and corporate donations, to an individual chosen from among qualified applicants. The funds are to be used by the recipient to offset expenses incurred in the course of conducting research. The objective of a qualifying research project is to uncover and publicize the achievements and contributions to public life of disabled Canadians.
Upon review of the legislation and its intent I must agree with your own conclusions that the payments should be characterized as research grants. As you point out, the treatment of research grants is set out in paragraph 56(1)(o) of the Income Tax Act. This provision requires the inclusion of the grant in income to the extent that it exceeds reasonable expenditures made in the course of carrying out the research activity. I am enclosing a copy of Interpretation Bulletin IT-75R2 which explains the taxation of research grants and the types of expenses which may be deducted from such grants.
In order for a research grant to be exempt from taxation, a specific provision in the Income Tax Act would be required. I have, therefore, forwarded a copy of your letter to the Honourable Don Mazankowski, Minister of Finance, so that he may be made aware of your concerns.
I trust my comments have been of assistance to you.
Yours sincerely,
Otto Jelinek
- c. c. The Honourable Don Mazankowski, Minister of Finance
J. Szeszycki
957-2131
April 6, 1992
920911
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© Her Majesty the Queen in Right of Canada, 1992
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© Sa Majesté la Reine du Chef du Canada, 1992
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