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.
5-921968
24(1) B. Kerr
(613) 957-2092
Attention: 19(1)
August 25. 1992
Dear Sirs:
Re: Subsection 85(1) of the Income Tax Act
This is in response to your letter of June 17, 1992 wherein you requested confirmation that if a beneficiary under a testamentary trust receives, pursuant to the deceased's will, a property which the deceased held as capital property, and immediately or shortly after receiving the property, the beneficiary transfers the property to a wholly-owned corporation which will hold the property as capital property, the mere fact that the beneficiary holds the property for only a short time will not, in and of itself, preclude the beneficiary from classifying the property as capital property for purposes of subsection 85(1) of the Income Tax Act (Canada).
Comments
Whether or not a property can be characterized as a capital property depends upon a consideration of the facts surrounding the acquisition of the property and the holding of such property. The fact that capital property received by a beneficiary of a testamentary trust and held for a short period before the beneficiary transfers the property to a wholly-owned corporation will not, in and by itself, preclude the property from representing capital property to the beneficiary.
Document Disclosed Pursuant to The Access To Information Act Document Divulgué en vertu de la loi sur l'accès à l'information
The foregoing comments represent our general views with respect to the subject matter of your letter. The facts of a particular situation may lead to a different conclusion. The foregoing opinion is not a ruling and, in accordance with paragraph 21 of Information Circular 70-6R2 dated September 28, 1990, is not binding on Revenue Canada Taxation.
Yours truly,
for Director
Reorganizations and Foreign Division
Rulings Directorate
Legislative and Intergovernmental
Affairs Branch
Document Disclosed Pursuant to The Access To Information Act Document Divulgué en vertu de la loi sur l'accès à l'information
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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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