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.
XXXXXXXXXX
Attention: XXXXXXXXXX
Dear Sirs:
RE: 21 Year Deemed Realization Rule for Trusts
We are writing in reply to your letter of March 17, 1993, addressed to the Charities Division and forwarded to us for reply, wherein you requested our comments on whether registered charities and non-profit organizations that are trusts will be subject to the 21 year deemed realization rule in subsection 104(4) of the Income Tax Act (the "Act"). We apologize for the delay in responding to your letter.
Our Comments:
Your letter refers to specific trusts. As indicated in paragraph 21 of Information Circular 70-6R2 dated September 28, 1990, a request for written opinions on completed transactions for a specific taxpayer is generally considered by the taxpayer's local district taxation office. While we are unable to provide any opinion in respect of the trusts listed in your letter, we are prepared to offer the following general comments.
Where a trust is a registered charity (under subsection 149.1(1) of the Act) or a non-profit organization (under paragraph 149(1)(l) of the Act) to which the exception in subparagraph 108(1)(j)(i.1) of the Act does not apply, it is our opinion that such a trust will be subject to the deemed realization rule in subsection 104(4) of the Act. However, the Department is currently considering whether to provide administrative relief to such trusts from the application of subsection 104(4) of the Act. As it is expected to take some time to resolve this issue, we suggest that you contact Joe Hartwick at (613) 957-3967 later this year in order to obtain the Department's position on this matter.
We trust that these comments will be of assistance.
Yours truly,
for Director Manufacturing Industries, Partnerships and Trusts DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch
c.c. Joe Hartwick T3 Programs Section T2 and T3 Programs Division Assessment of Returns 16th floor, 355 River Road
c.c. Carl Juneau Chief Technical Interpretations and Communications Section Charities Division Room 5004A, 400 Cumberland
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© Her Majesty the Queen in Right of Canada, 1993
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© Sa Majesté la Reine du Chef du Canada, 1993
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