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.
RESERVE RE: SALE OF CANADIAN RESOURCE PROPERTY
QUESTION 18
In what circumstances, if any, will Revenue Canada allow a taxpayer to claim a reserve under subsection 20(1)(n) where he has sold a Canadian resource property ("CRP") and a portion of the proceeds in respect of the sale are not due until after the end of the year in which the CRP is sold?
DEPARTMENT'S POSITION
It remains the Department's position that a reserve under subsection 20(1)(n) of the Act is generally not available in respect of an amount receivable but not yet due with regard to the disposition of a CRP. In our opinion, such a reserve may be available in limited circumstances in respect of CRP representing inventory to a taxpayer carrying on the business of trading or dealing in CRP.
CPTS June 17, 1993
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