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: Interaction of subsections 104(19) and 112(1).
Position: Corporate beneficiary generally entitled to deduction.
Reasons: Law as explained in paragraph 3 of IT-524.
XXXXXXXXXX 972003
T. Murphy
Attention: XXXXXXXXXX
November 19, 1997
Dear Sirs:
Re: Subsections 104(19) and 112(1) of the Income Tax Act (the "Act")
This is in reply to your letter of July 15, 1997, concerning the application of the above noted provisions of the Act to a corporation which is a beneficiary of a trust.
The scenario described in your letter appears to be an actual situation and, consequently, as set out in Information Circular 70-6R3, we cannot comment on it specifically other than in the context of an advance income tax ruling. Please note, however, that the interaction of subsections 104(19) and 112(1) of the Act is explained in paragraph 3 of Interpretation Bulletin IT-524 as follows:
If the beneficiary is a corporation, it is normally eligible for the intercorporate dividend deduction under subsection 112(1). However, the corporate beneficiary may be subject to the provisions of Part IV or of Part VI.1 of the Act in respect of the dividend it is deemed to have received.
We trust our comments will be of assistance to you.
Yours truly,
Director
Resources, Partnerships and Trusts Division
Income Tax Rulings and Interpretations Directorate
Policy and Legislation Branch
.../cont'd
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