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:
Deductibility of sales commission expenses incurred by mutual fund limited partnerships in connection with the distribution of mutual funds.
Position TAKEN:
For sales commission expenses incurred before June 30, 1995 a deduction will be allowed of 50% if the sales commission expenses in the year incurred and 25% for each of the next two years.
Reasons FOR POSITION TAKEN:
See our administrative practice as set out in "Income Tax Technical News", issue #1, dated July 22, 1994.
5-950481
XXXXXXXXXX J. Thompson
Attention: XXXXXXXXXX
March 10, 1995
Dear Sirs:
Re: Mutual Fund Limited Partnerships
This is in reply to your facsimile transmission dated February 21, 1995 concerning the deductibility of sales commission expenses incurred by mutual fund limited partnerships in connection with the distribution of mutual funds.
In your facsimile transmission, you request confirmation of our administrative practice concerning the deductibility of sales commissions incurred by mutual fund limited partnerships.
Our administrative practice as set out in "Income Tax Technical News" dated July 22, 1994 has not changed. As noted therein, a limited partnership which incurs sales commission expenses in connection with the distribution of mutual funds before June 30, 1995 will be allowed to amortize these expenses in the following manner. A deduction of 50% of the sales commissions expenses in the year incurred by the limited partnership, and a deduction of 25% for each of the next two years. Sales commission expenses incurred by mutual fund partnerships after June 30, 1995, will be deductible on a straight line basis over three years.
We trust that this responds to your query.
Yours truly,
for Director
Manufacturing Industries, Partnerships
and Trusts Division
Rulings Directorate
Policy and Legislation Branch
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