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:
deductibility of a lump sum payment in lieu of future
alimony payments
Position TAKEN:
not deductible
Reasons FOR POSITION TAKEN:
it is a lump sum payment & not a periodic amount
A. Humenuk
XXXXXXXXXX 940552
May 11, 1994
Dear XXXXXXXXXX:
Re: Payments to Your Former Spouse
We are replying to your letter of February 28, 1994 concerning the lump sum payment of $XXXXXXXXXX you made to
your former spouse as required by the XXXXXXXXXX court order.
You have asked if any portion of that equity payment is deductible. As stated in the attached Interpretation Bulletin IT-118R3 "Alimony and Maintenance", payments made to a spouse or former spouse are only deductible where all the conditions described in paragraph 60(b) or (c) of the Income Tax Act are met. These conditions are listed in paragraph 2 of the bulletin.
One of the conditions necessary in order for an amount to be deductible is that the allowance must be payable on a periodic basis. Since the lump sum payment of $XXXXXXXXXX paid in lieu of any future support is not a periodic payment, it is not deductible.
While we regret that we could not give you a favourable response, we trust that these comments have explained our Position.
We trust our comments will be of 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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