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 subsection 1102(5) of the Regulations would permit classification of a building, that is to be constructed on leased land, in Class 37?
Position TAKEN:
Yes.
Reasons FOR POSITION TAKEN:
Paragraph 3 of IT-79R3 states that "Subsection 1102(5) of the Regulations is considered to apply to any property referred to in Schedule II of the Regulations which is either a "building" or a "structure", and not just to a "building or other structure" as referred to in Classes 1, 3, and 8".
5-941523
XXXXXXXXXX L. Roy
Attention: XXXXXXXXXX
August 17, 1994
Dear Sir\Madam:
RE: Capital Cost Allowance
This is in reply to your letter of June 6, 1994 wherein you requested the Department's interpretation on whether subsection 1102(5) of the Income Tax Regulations (the "Regulations") would permit classification of a building, that is to be constructed on leased land, in Class 37.
Subparagraph 1102(5)(a)(i) of the Regulations provides that a reference to a property that is a building or other structure in Schedule II of the Regulations includes a leasehold interest to the extent that it was acquired by reason of the fact that the taxpayer erected a building or structure on leased land. The effect of this requirement is that a leasehold interest in a building is included in its respective class of Schedule II of the Regulations and not in Class 13.
With regard to the application of subsection 1102(5) of the Regulations, it is the Department's view, as indicated in paragraph 3 of Interpretation Bulletin IT-79R3, that subsection 1102(5) of the Regulations is considered to apply to any property referred to in Schedule II of the Regulations which is either a "building" or a "structure", and not just to a "building or other structure" as referred to in Classes 1, 3, and 8.
Therefore, it our view that a building which is constructed by a taxpayer on a leased land and used in connection with an amusement park could be classified in Class 37 by virtue of subsection 1102(5) of the Regulations.
The foregoing opinions are not rulings and, in accordance with the guidelines set out in Information Circular 70-6R2 dated September 28, 1990, are not binding on the Department.
We trust the above comments will be of assistance to you.
Yours truly,
for Director
Financial Industries Division
Rulings Directorate
Policy and Legislation Branch
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