20 October 1994 Internal T.I. 9423827 - NON-PROFIT ORGANIZATION

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 a trust is a non-profit organization.

Position TAKEN:

Question of facts. Unable to give definitive comments regarding the tax status.

Reasons FOR POSITION TAKEN:

Routine

									October 20,1994

	OTTAWA DISTRICT OFFICE					HEAD OFFICE
			Rulings Directorate
	Attention:  Blaise Castonguay				Adèle St-Amour
	              Estate & Election	(613) 957-8953

			7-942382

Non-profit organization - Information Request

This is in response to your round trip memorandum dated September 13, 1994, inclosing a letter dated August 24, 1994 from
XXXXXXXXXX.

He requests that we confirm that the Trust Fund is a non-profit organization, eligible for tax exemption on its income.

It is a question of facts whether or not a particular entity is a non-profit organization as defined in subsection 149(1)(l) or an inter vivos trust as defined in subsection 108(1) of the Income Tax Act. In this case, we are unfortunately unable to offer definitive comments regarding the tax status of the Trust Fund without a complete description of the details of its organization and operation and without reviewing the pertinent agreements. You may suggest to XXXXXXXXXX to seek assistance from a tax consultant or to contact his local district taxation office to discuss the facts of his specific case. The following comments are, therefore, of a general nature only.

Under the provisions of paragraph 149(1)(l) of the Act, in order to qualify for the exemption, a club, society or association, that was not a charity, within the meaning assigned by subsection 149.1(1) of the Act, must have been organized as well as operated exclusively for social welfare, civic improvement, pleasure or recreation or for any purpose except profit and no part of its income may be available for the personal benefit of its members, shareholders or proprietors. In Interpretation Bulletin IT-496, the Department has outlined some of the factors that are considered relevant in determining the exempt status of an entity under 149(1)(l) of the Act and the circumstances under which an entity would lose its exempt status.

Depending on the circumstances, a trust could qualify as a non-profit organization pursuant to the conditions set out in paragraphs 5 and 6 of IT-496. The expression "any other purpose except profit" is intended to be a catch all for organizations which are organized for some purpose other than commercial reasons, and the earning of the profit is incidental to the reason for being in existence.

for Director
Financial Industries Division
Rulings Directorate