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.
5-950021
XXXXXXXXXXJ. Teixeira
(613) 957-8953
Attention: XXXXXXXXXX
July 28, 1995
Dear Sirs:
Re: Subsection 111(5) of the Income Tax Act (the "Act")
This is in reply to your letters dated December 14, 1994, February 13 and April 25, 1995 wherein you requested a technical interpretation regarding the meaning of the phrase "that business" as referred to in paragraph 111(5)(a) of the Act.
In your letters you have outlined what appears to be an actual fact situation related to past transactions. Such transactions fall within the responsibility of the District Office in which the taxpayer files its income tax returns and can be done only after a review of all of the relevant facts. However, we can provide you with the following general comments regarding the issues raised in your letters.
The determination of when a business commences is a question of fact and it is a practice of the Department not to comment on such transactions when the identities of the taxpayers are not known. The Department's general comments regarding commencement of business operations are in the interpretation bulletin quoted in your letter (IT-364).
In IT-206R entitled Separate Businesses, subparagraph 4(c) states where the ownership of a corporation has changed, two operations will not normally be considered the same business if the first business ceases operation before the second operation begins. It goes on to comment on the factors that will be considered in determining whether a business ceases.
The above comments are given in accordance with the practice of providing non-binding opinions referred to in paragraph 21 of Information Circular 70-6R2 dated September 28, 1990.
Yours truly,
for Director
Reorganizations and Foreign Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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