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.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
Mr. Danny Byrne
International Tax Office
2540 Lancaster Road 5-933520
Ottawa, Ontario
March 25, 1994
Dear Sir,
This is in reply to your round trip memorandum dated November 29, 1993, in which you requested our comments concerning the deductibility of alimony in the following situation:
- Alimony is paid by a taxpayer for a taxation year from January to December,
- The taxpayer left Canada in June.
You would like to know if the taxpayer would be entitled to claim a deduction by virtue of paragraph 60(b) of the Income Tax Act (the "Act") for the alimony paid during the period referred to in paragraph 114(b) of the Act if there was no income being reported in that period.
The income for the period referred to in paragraph 114(b) of the Act must be computed as though the part of the year that is not in the period referred to in paragraph (a) were the whole taxation year. Section 3 of the Act is the basis for the calculation of income for that period. Since there is no rule in paragraphs 115(1)(a) to (f) of the Act to deny or otherwise limit eligible subdivision e deductions, an alimony payment that qualifies under paragraph 60(b) of the Act would be deductible under paragraph 3(c) of the Act. The amount determined under paragraph 3(c) of the Act can only be a positive amount. Consequently, if the alimony paid in the period described in paragraph 114(b) of the Act exceeds the income for that period, the excess cannot be applied to reduce the amount of income determined in the paragraph 114(a) period. In your example, since no income is being reported for the period referred to in paragraph 114(b) of the Act, no alimony payment can be claimed for that period, nor can the alimony payments paid in the period during which the taxpayer was not resident in Canada be claimed in the period or periods referred to in paragraph 114(a) since the income for such period or periods must be computed as though they were the whole taxation year.
Your truly,
for Director
Reorganizations and Non-Resident Division
Ruling Directorate
Legislative and Intergovernmental
Affairs Branch
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