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.
942017
XXXXXXXXXX B. Kerr
Attention: XXXXXXXXXX
January 4, 1995
Dear Sirs:
Re: Subsections 14(1) and (4) of the Income Tax Act (the "Act")
This is in response to your letter of July 28, 1994, wherein you requested our view as to whether an individual proprietor should report a deemed taxable capital gain, determined under subsection 14(1) arising on the sale of goodwill, in the calender year in which the fiscal period ends, even though he elects under subsection 25(1) of the Act to extend that fiscal period to its normal year-end which falls in the subsequent calender year. We apologize for the delay in responding.
It is our general view that, by virtue of the interaction between subsection 14(4) and paragraph 25(3)(b) of the Act, the deemed taxable capital gain determined under subsection 14(1) should be included in income in the calendar year in which the deemed fiscal period ends pursuant to subsection 25(1) of the Act. This is consistent with a previous view expressed in 1990.
In closing, we would like to comment on the complaint you have expressed in your letter in regards to the lack of a response you received to an earlier telephone enquiry that you made in order to address your concern. We apologize for this lack of service. Due to budgetary cuts the Rulings Directorate was temporarily forced to substantially reduce the service provided in respect of telephone enquiries. However, as a result of client feedback, we are pleased to advice that full telephone service has recently been restored.
We trust that these comments will be of assistance.
Yours truly,
A.M. Brake
for Director
Business and General Division
Rulings Directorate
Policy and Legislation Branch
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