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.
October 16, 1992
Mississauga District Office Business and General
Anne Diak Division
Enquiries and Office Exam. W.P. Guglich
T1 Adjustments (613) 957-2102
922834
Legal Fees
This is in reply to your memorandum of September 23, 1992
concerning the deductibility of legal fees. 24(1)
OUR COMMENTS
Our comments in our memorandum to your office dated July 20, 1992 (file # 921969) to which you refer to in your memorandum are relevant in your case.
As the legal fees were not incurred in respect of a business and also were not incurred for the purpose of gaining or producing income from a business they would not be considered "eligible capital expenditures". As the legal fees were not incurred "for the purpose of making the disposition" as required by subparagraph 40(1)(a)(i) of the Act, they can not be deducted from the proceeds of disposition.
We are not aware of any provision in the Income Tax Act which would permit the taxpayer, in the situation described, to deduct any portion of his legal fees of $24(1).
We trust this will be of assistance to you.
G. Thornley for Director Business and General Division Rulings Directorate Legislative and Intergovernmental Affairs Branch
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