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 separate classes are required for each unit when an apartment building is converted to a condominium building.
Position:
no
Reasons:
there were no acquisitions or dispositions. Furthermore, paragraph 3 of IT-274R sets out the position that only one class is required if multiple units are acquired in the same building.
960671
XXXXXXXXXX A.M. Brake
Attention: XXXXXXXXXX
March 29, 1996
Dear Sirs:
Re: Separate Classes, Regulation 1100(1)(a)(i) and 1101(1)(1ac)
This is in reply to your letter of January 31, 1996 wherein you asked whether a partnership with a Class 1 apartment building would require a separate class for each unit for capital cost allowance purposes after the property is converted into a condominium building with identifiable units that each have a fair market value in excess of $50,000.
Paragraph 3 of Interpretation Bulletin IT-274R sets out the position that:
"3. In the case of a condominium building or row-housing structure where a taxpayer has acquired one or more units, the cost of the unit or the aggregate cost of all the units within the same building or structure will constitute one separate class if this cost or the aggregate cost is $50,000 or more."
Hence, if a taxpayer acquired all the units in a building, only one class would be required for the entire cost of the units. In view of this position, separate classes would not be required for each unit owned by a taxpayer upon conversion of an apartment building into a condominium building.
These comments are given in accordance with the practice of providing opinions referred to in paragraph 21 of Information Circular 70-6R2 and are not binding on Revenue Canada.
We trust our comments will be of assistance to you.
Yours truly,
R. Albert
for Director
Business and General Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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