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.
Principal Issues:
The taxpayer transferred cash to his wife to assist her in
purchasing a property. They wished to know if the gain on
its sale would be attributed to the husband totally or
partially.
Position TAKEN:
No definite answer given suggested they discuss the matter
further with the District Office
Reasons FOR POSITION TAKEN:
It is always a question of fact whether in a particular
situation attribution applies
940082
XXXXXXXXXX A.W. Larochelle
May 4, 1994
Dear XXXXXXXXXX:
Re: Attribution Rules
This is in response to your letter of January 6, 1994 wherein you requested our general comments on the applicability of the attribution rules to the transactions described in your letter. We regret the delay in providing a response.
The situation outlined in your letter appears to involve a completed transactions and identifiable taxpayers.
Consequently, we would like to bring your attention to paragraph 21 of Information Circular 70-6R2, dated September
28, 1990, issued by Revenue Canada, Taxation wherein it is stated that a District Taxation Office will assist in determining the tax position of such transactions. We are, however, able to provide you with the following general comments.
Where an individual has transferred property to his or her spouse the attribution rules found in subsections 74.1(1) and 74.2(1) of the Income Tax Act (the "Act") will generally apply. In this instance, the transferred property is the cash transfer of $50,000 which was uses to purchase other property (" substituted property") such that any income or loss realized from such property, and any capital gain or loss from the disposition of the transferred property, or substituted property, will be deemed to be the income or loss, or the capital gain or loss, of the individual and not of his or her spouse. It is always a question of fact as to whether, in any particular situation, attribution applies and the staff in the District Office are in the best Position to make this determination. We would therefore suggest that you contact your District Office and discuss the case in detail. In the interim we would suggest you review the case of Trinca v. M.N.R. 51 DTC 91 wherein it was decided in circumstances similar to yours that only a portion of the gain was attributed. In addition, we would refer you to Interpretation Bulletin IT-511 which provides more detailed information concerning the attribution rules.
We regret that we could not be more specific with our reply but as mentioned above we recommend that you discuss the matter further with your District Taxation Office. We trust our comments will be of some assistance to you.
Yours truly,
J.A. Szeszycki
for Director
Business and General Division
Rulings Directorate
Legislative and Intergovernmental
Affairs Branch
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