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.
XXXXXXXXXX 960922
Attention: XXXXXXXXXX
May 22, 1997
Dear Sirs:
Re: Subsection 34.2(5) of the Income Tax Act (the "Act")
This is in reply to your letter of March 6, 1996 concerning the above-noted provision of the Act. We apologize for the delay in replying to your request.
Your situation involves the amount that is required to be included in computing the income of an inter vivos trust, a member of a partnership, pursuant to subsection 34.2(5) of the Act, as a result of a reserve that was claimed under subsection 34.2(4) in respect of "December 31, 1995 income". Specifically, you have requested our views as to whether (i) such income inclusion in a year for tax purposes would also be considered as income for trust purposes and (ii) this income can be considered "paid or payable" for the purpose of obtaining a deduction in computing the income of the trust pursuant to subsection 104(6) of the Act.
After giving due consideration to the information submitted, we are unable to provide a definitive response to your questions without further details of the particular case, as it will depend on the terms of the particular trust indenture, the type of trust, the accounting and tax practices with respect to income and the rights of the beneficiary of the trust to enforce payment in respect of the income of the trust.
As described in paragraph 22 of Information Circular IC 70-6R3, we would be pleased to consider your request in the form of an advance income tax ruling. Alternatively, the facts of a specific case could be discussed with officials of the local Tax Services Office.
Yours truly,
for Director
Resources, Partnerships and Trusts Division
Income Tax Rulings and Interpretations Directorate
Policy and Legislation Branch
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© Her Majesty the Queen in Right of Canada, 1997
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