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:
An automobile was purchased by an individual and his wife. The automobile was converted so that it would operate on natural gas. Grants were received from Energy Mines and Resources Canada in connection with the conversion which occurred in 1993.. Are there any tax consequences in respect of the grants?
Position TAKEN:
No, there are no tax consequences with respect to the 1993 taxation year.
Reasons FOR POSITION TAKEN:
The automobile is a personal asset.
November 23, 1994
Sudbury Taxation Centre Business and General
TPR Unit Division
Ms. Joan Tiller M. Eisner
(613) 957-3138
942347
Vehicle - Natural Gas Conversion
On August 12, 1994, we received your submission concerning
XXXXXXXXXX
has asked several questions about certain grants received by him including whether the grants are required to be included in his or his wife's income for that year.
In the letter, XXXXXXXXXX has indicated that Energy, Mines, and Resources Canada (EMR) made grants to him under a program which is intended to promote the use of fuels in automobiles other than gasoline. With respect to the grants, he has mentioned that
XXXXXXXXXX
A review of XXXXXXXXXX 1993 T-1 income tax return indicates that the automobile in question was not used by him for the purpose of earning income from a business or property and that capital cost allowance in respect of the automobile was not claimed pursuant to paragraph 8(1)(j) of the Act in computing employment income. Pursuant to a telephone conversation on November 9, 1994 (Eisner/Marion Stewart), it is our understanding that the same can be said in respect of the 1993 T-1 income tax return of XXXXXXXXXX On the basis of this information, the grant made in respect of the conversion appears to have been received by the taxpayer in a personal capacity as opposed to it being related to business, property, or employment income. Accordingly, the grant does not result in any tax consequences with respect to XXXXXXXXXX or his wife's 1993 T-1 income tax return. Consistent with these comments, neither of them is entitled to deduct any costs in excess of the grants that were received.
XXXXXXXXXX 1993 T-1 income tax return has been enclosed.
Should you require further technical assistance, we would be pleased to provide our views.
J.A. Szeszycki
for Section Chief
Personal and General Section
Business and General Division
Rulings Directorate
Policy and Legislation Branch
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© Her Majesty the Queen in Right of Canada, 1994
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© Sa Majesté la Reine du Chef du Canada, 1994
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