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:
Lump-sum payment to settle future child support payments after T1157 election is filed.
Position:
Not deductible or taxable.
Reasons:
Payments must be periodic payments. Comments in paragraph 13(a) of It-118R3 apply.
973081
XXXXXXXXXX A.M. Brake
January 7, 1998
Dear XXXXXXXXXX:
Re: Lump-Sum Payment in Settlement of Future Child Support
This is in reply to your letter of November 13, 1997 relating to child support payments. You stated that you and your former spouse filed Form T1157, Election for Child Support Payments, so that the child support payments would not be taxable in your hands nor deductible to him. Your former spouse now proposes to make a lump-sum payment to cover all future child support obligations and you asked whether such a payment would be taxable in your hands.
It is our opinion that an amount paid as a single lump-sum payment to cover all future child support obligations would not cause the payment to be taxable in your hands.
We trust our comments will be of assistance to you.
Yours truly,
John F. Oulton
for Director
Business and Publications Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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