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:
Whether recaptured depreciation is included in "gross revenue" as that term is used in subsection 402(3) of the Regulations.
Position TAKEN:
No
Reasons FOR POSITION TAKEN:
Recaptured depreciation is not an amount included in the definition of "gross revenue" at 248(1) of the Act.
5-940551
XXXXXXXXXX M. Shea-DesRosiers
Attention: XXXXXXXXXX
May 19, 1994
Dear Sir/Madam:
Re: Section 402 of the Income Tax Regulations (the "Regulations")
"Gross Revenue" as defined in subsection 248(1) of the Income Tax Act
This is in reply to your letter of February 28, 1994 concerning the above-mentioned subject. Unless as otherwise stated all references to statute are to the Income Tax Act S.C. 1970-71-72, c.63 as amended consolidated to June 10, 1993 (the "Act").
The situation outlined in your letter appears to relate to specific transactions, either proposed or completed. As indicated in paragraph 21 of Information Circular 70-6R2 dated September 28, 1990, we do not express opinions on specified proposed transactions other than as a reply to an advance income tax ruling. Where completed transactions are involved, the enquiry should be addressed to the relevant District Taxation Office. We can however offer you the following general comments.
You inquire as to whether recaptured depreciation which is included in the income of a corporation pursuant to subsection 13(1) of the Act would be included in the determination of the "gross revenue" of the corporation as that term is used in subsection 402(3) of the Regulations for the purpose of allocating taxable income between provinces.
We confirm your understanding that, in such a situation, recaptured depreciation would not be included in the determination of the "gross revenue" of a corporation since it is not an amount provided for in the definition of that term in either paragraph 248(1)a) or (b) of the Act.
We trust the above comments will be of assistance to you.
Yours truly,
for Director
Financial Industries Division
Rulings Directorate
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