6 September 1994 External T.I. 9421835 - MFLP SALES COMMISSIONS

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.

		942183
XXXXXXXXXX F.B. Fontaine

Attention: XXXXXXXXXX

September 6, 1994

Dear Sirs:

Re: Mutual Fund Limited Partnerships

This is in reply to your facsimile transmission dated August 24, 1994 concerning the above-captioned subject.

This is to confirm that the Department provides advance income tax rulings relating to the deductibility of sales commissions incurred by mutual fund limited partnerships. In this regard, the Department is further extending its administrative practice of allowing a deduction of sales commissions incurred by such limited partnerships in distributing mutual fund units, on the basis of 50% thereof for the year in which the sales commissions were incurred and 25% thereof for each of the next two years. This administrative practice applies to sales commissions incurred on or before June 30, 1995. After this date, sales commissions incurred by mutual fund limited partnerships will be deductible on a straight line basis over three years. We enclose, for your information, a copy of the Income Tax Technical News dated July 22, 1994 which discusses this particular income tax treatment.

We hope that this information will be helpful to you.

Yours truly,

for Director
Manufacturing Industries, Partnerships
and Trusts Division
Rulings Directorate
Policy and Legislation Branch