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:
Is a refrigeration unit exempt property for the purposes of the specified property rules?
POSITION:
no
REASONS:
A refrigeration unit is not a trailer until it is bolted to a trailer
962261 XXXXXXXXXX C. Tremblay
Attention: XXXXXXXXXX
October 3, 1996
Dear Sirs:
Re: Specified leasing Property - Exempt Property
This is in reply to your letter of June 25, 1996, wherein you request our opinion as to whether a refrigeration unit constitute exempt property for purposes of the specified leasing property rules.
The situation that is described appears to involve a series of actual completed transactions involving specific taxpayers; consequently, your questions should be directed to your District Services Taxation Office which has the responsibility of determining the tax consequences of completed transactions and their implications to the specific taxpayers. Although we are unable to provide any opinion in respect of the specific transactions described in your letter, we have set out some general comments which may be of some assistance.
In our view, unless a refrigeration unit costing more than $25,000 is bolted and wired directly to a trailer unit by the lessor and typically remains on the trailer for the full leasing period and leased as a complete unit, it is not a "trailer". Accordingly, regardless of the fact that a refrigeration unit cannot be used in any other application other than to haul freight under normal operating conditions by a truck or tractor designed for hauling freight on highways, it would generally not qualify as exempt property for the specified leasing property rules pursuant to subparagraph 1100(1.13)(a)(v) of the Income Tax Regulations unless the refrigeration unit is bolted and wired to the trailer and leased as a complete trailer.
The above comments represent our general views with respect to the subject matter of your letter and should not be construed as advance income tax rulings, nor are they binding on the Department.
We trust our comments will be of assistance to you.
Yours truly,
for Director Financial Industries Division Income Tax Rulings and Interpretations Directorate Policy and Legislation Branch
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