19 March 1996 External T.I. 9604285 - BUS DEDUCT FOR ELEVATOR TO GIVE ACCESS TO DISABLED

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 installation of an elevator large enough to accomodate a hospital bed qualified for a deduction under 20(1)(qq)

Position:

no

Reasons:

not listed in regulation 8800

A. Humenuk
XXXXXXXXXX		960428

Attention: XXXXXXXXXX

March 19, 1996

Dear Sirs:

Re: Whirlty Chair Lift

We are replying to your letter of January 24, 1996 in which you ask whether the purchase of a Whirlty Chair Lift would be deductible under paragraph 20(1)(qq) of the Income Tax Act in computing your business income for 1995.

We are not prepared to offer comments on your specific situation since the tax implications pertaining to a completed transaction can only be determined after a review of all the relevant facts and documentation. Such reviews are the responsibility of the local Tax Service Offices. Nevertheless, we offer the following general comments which may be of assistance to you. If you require further assistance in connection with your income tax return, please contact the XXXXXXXXXX Tax Service Office.

In discussing the issue with you and your representative on February 22, 1996 (Humenuk/XXXXXXXXXX), your representative indicated that the Whirlty Chair Lift is the trade name for a specific elevator large enough to accommodate a hospital bed. The installation of the Whirlty Chair Lift in the XXXXXXXXXX enabled the physically disabled residents of the lodge to access both the first and second floors of the dwelling. The modification became necessary in 1995 when the number of physically disabled individuals living at the lodge increased so that they could not all be given rooms on the ground floor.

Paragraph 18(1)(b) of the Act states that no deduction may be made on account of capital expenditures except as expressly permitted by Part I of the Act. Generally capital expenditures relating to modifications to a building, such as the installation an elevator, are added to the capital cost of that building and capital cost allowance may be claimed to the extent permitted by the Regulations.

Paragraph 20(1)(qq) on the other hand, which was originally introduced in 1991 as paragraph 20(1)(gg) of the Act, permits a taxpayer to deduct the full cost of certain eligible renovations and alterations to a building in the year the expense is incurred where the modification is made to accommodate disabled individuals and the building is used by the taxpayer primarily for the purpose of gaining or producing income. The renovations and alterations to a building which are eligible are set out in section 8800 of the Regulations. While an elevator or lift undoubtedly enables a disabled individual more mobility within a dwelling, it is not listed as an eligible renovation or alteration in Part 8800 of the Regulations. As a result, the cost of installing an elevator is not deductible under paragraph 20(1)(qq) of the Act. However modifications to an existing elevator, such as the lowering of the floor selection panel or guard rails, would qualify.

Paragraph 20(1)(rr) of the Act provides for a similar deduction in respect of certain disability-specific devices and equipment that are acquired by a taxpayer for the purpose of gaining or producing income from a business or property. The list of devices which are eligible under paragraph 20(1)(rr) of the Act is found in section 8801 of the Regulations. While an elevator is not eligible under this provision, section 8801 of the Regulations includes disability-specific devices used in elevators, such as the elevator car position indicator designed for use by an individual with a sight impairment (i.e a braille panel or audio signal indicator).

We trust our comments will be of assistance to you.

Yours truly,

J.A. Szeszycki
for Director
Business and General Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch