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.
XXXXXXXXXX 940158
Attention: XXXXXXXXXX
February 10, 1994
Dear Sirs:
Re: Advance Income Tax Ruling Request for
XXXXXXXXXX
We are replying to your letter of January 19, 1994, concerning your request for an advance income tax ruling in respect of the
XXXXXXXXXX.
As mentioned in paragraph 6 of Information Circular 70-6R2, an advance income tax ruling will be given only in respect of a proposed transaction. As the transaction with which you are concerned involves a completed transaction we are unable to comply with your request to issue a ruling. If you wish assistance in determining whether the partnership is entitled to a deduction for the payment made to XXXXXXXXXX please submit all the relevant documentation to the XXXXXXXXXX District Office for their consideration.
However, we offer the following comments which may be of assistance to you. Your principal concern relates to the fact that
XXXXXXXXXX
Paragraph 4 of the enclosed Interpretation Bulletin IT-467R "Damages, Settlements and Similar Payments" summarizes the conditions which are necessary in order to deduct an amount paid as damages. The use of the funds by the injured party would not normally be relevant for the purpose of determining whether the payer is entitled to a deduction. We also enclose Interpretation Bulletin IT-365R "Damages, Settlements and Similar Receipts" which outlines our position concerning the taxability of such payments in the hands of the recipient.
While your deposit will be returned under separate cover, we draw your attention to paragraph 8 of Interpretation Bulletin IT-99R4 "Legal and Accounting Fees" for information concerning the deductibility of the costs of obtaining an advance income tax ruling.
We trust our comments will be of assistance to you.
Yours truly,
P.D. Fuoco
for Director
Business and General Division
Rulings Directorate
Legislative and Intergovernmental
Affairs Branch
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© Her Majesty the Queen in Right of Canada, 1994
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© Sa Majesté la Reine du Chef du Canada, 1994
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