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 the provisions of new section 20.1 apply where the loss of source of income occurs before 1994
Position TAKEN:
No
Reasons FOR POSITION TAKEN:
The law clearly provides that section 20.1 is applicable where the loss of source of income occurs after 1993. This position is further clarified in the explanatory notes (page 19) which states that the new rules apply where the loss of source of income occurs after 1993
950263
XXXXXXXXXX F. Francis
Attention: XXXXXXXXXX
February 22, 1995
Dear Sirs:
This is in reply to your letter of January 27, 1995 wherein you requested our opinion with respect to the applicability of section 20.1 of the Income Tax Act (the "Act") to a specific factual situation.
As noted in Information Circular 70-6R2, we do not provide opinions with respect to proposed factual transactions other than as a reply to an advance income tax ruling. If the transaction has already been completed we suggest that you discuss the issue with your local district taxation office. However, we will offer the following general comments.
Section 20.1 of the Act contains rules that apply where, because of a loss of source of income which occurs after 1993, borrowed money ceases to be used for an income-earning purpose. Consequently, this section will not apply where the loss of source of income occurred prior to 1994.
We trust our comments will be of assistance to you.
Yours truly,
for Director
Financial Industries Division
Rulings Directorate
Policy and Legislation Branch
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