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:
Does "21-year rule" apply to a communal organization?
Position TAKEN:
No.
Reasons FOR POSITION TAKEN:
Law - subparagraph 108(1)(j)(iv).
XXXXXXXXXX 940902
Attention: XXXXXXXXXX
April 25, 1994
Dear Sirs:
Re: Communal Organizations and the Deemed Disposition Rules for Trusts
This is in reply to your letter of April 5, 1994 wherein you enquired whether a communal organization which is deemed to
be an inter vivos trust pursuant to the provisions of subsection 143(1) of the Income Tax Act S.C. 1970-71-72, c.63 as amended consolidated to June 10, 1993 (the "Act") is subject to the "deemed disposition rule" in subsection 104(4) of the Act.
Relative to your query, subparagraph 108(1)(j)(iv) of the Act provides that in subsection 104(4) of the Act a trust does not include an inter vivos trust deemed to exist by virtue of subsection 143(1) of the Act. Consequently, such a trust would not be subject to the "deemed disposition rule" in subsection 104(4) of the Act.
Yours truly,
for Director
Manufacturing Industries, Partnerships
and Trusts Division
Rulings Directorate
Legislative and Intergovernmental
Affairs Branch
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