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:
Lease and sublease rights under the lease exception represents "intangible property" ?
Position:
No
Reasons:
Property is tangible
964063
XXXXXXXXXX C. Tremblay
Attention: XXXXXXXXXX
February 3, 1997
Dear Sirs:
Re: Lease and sub-lease of a bus
This is in reply to your letter of December 2, 1996, concerning situations where a taxpayer leases property from one party and then sub-leases that property to another party.
In our view, where a person pays a premium for an assignment of a lease, that person deducts or amortizes the premium over the sum of the primary term of the lease plus the option term of the lease.
With respect to your second question, it is our view that a sublease of property does not cause the property to become intangible property as that term is used in subparagraph 1100(1.11) of the Regulations.
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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