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: Regulation 1100(11)
This is in reply to your letter of July 15, 1993, concerning the capital cost allowance ("CCA") restriction on rental properties as it pertains to a hypothetical fact situation as outlined in your letter.
In our view, interest income earned on cash deposits generated from a rental operation is not, "income for the year from renting or leasing property" for the purpose of Regulation 1100(11) of the Act. Accordingly, any such interest income may not be used to increase CCA claims in respect of any rental property.
Reasonable expenses incurred in the course of earning the interest income can be deducted against this income. However, it is our view that these expenses do not include interest paid to tenants in respect of tenant deposits; as this expense is incurred directly in the course of earning the rental income not the interest income.
We trust the foregoing general comments will be of some assistance to you.
Yours truly,
for DirectorFinancial Industries DivisionRulings Directorate
All rights reserved. Permission is granted to electronically copy and to print in hard copy for internal use only. No part of this information may be reproduced, modified, transmitted or redistributed in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, or stored in a retrieval system for any purpose other than noted above (including sales), without prior written permission of Canada Revenue Agency, Ottawa, Ontario K1A 0L5
© Her Majesty the Queen in Right of Canada, 1993
Tous droits réservés. Il est permis de copier sous forme électronique ou d'imprimer pour un usage interne seulement. Toutefois, il est interdit de reproduire, de modifier, de transmettre ou de redistributer de l'information, sous quelque forme ou par quelque moyen que ce soit, de facon électronique, méchanique, photocopies ou autre, ou par stockage dans des systèmes d'extraction ou pour tout usage autre que ceux susmentionnés (incluant pour fin commerciale), sans l'autorisation écrite préalable de l'Agence du revenu du Canada, Ottawa, Ontario K1A 0L5.
© Sa Majesté la Reine du Chef du Canada, 1993
Email this Content