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:
The amount that can be claimed as the clergyman’s residence deduction by a clergy couple.
Position TAKEN:
When both spouses qualify for a deduction under paragraph 8(1)(c) and they pay rent for their accommodation, the actual rent paid must be allocated between them on a reasonable basis. Similarly, when the residence is owned and occupied by the couple, the fair rental value of the residence should be allocated between the spouses on a reasonable basis.
Reasons FOR POSITION TAKEN:
Position taken in other files, and supported by the preamble to subsection 8(1).
XXXXXXXXXX 5-991664
M. Azzi
July 15, 1999
Dear Reverend:
Re: Clergy Residence Deduction
This is in reply to your letter of June 10, 1999, regarding the clergy residence deduction provided in paragraph 8(1)(c) of the Income Tax Act (the “Act”), as it applies to members of the clergy who are married to other clergy and live at the same residence.
In considering the extent to which each spouse may claim the clergy residence deduction, we begin by looking at the preamble to the various deductions provided under subsection 8(1) of the Act. The preamble provides, in part, that in calculating income from an office or employment for a taxation year, “...there may be deducted such of the following amounts as are wholly applicable...or such part of the following amounts as may reasonably be regarded as applicable ...” Subparagraph 8(1)(c)(ii) of the Act provides for a deduction of either the amount paid as rent for the residence, or the fair rental value of the residence which is personally owned and occupied. The deduction is limited to the taxpayer's remuneration from that particular office or employment source.
Accordingly, it is our view that, when both spouses otherwise qualify for a deduction under paragraph 8(1)(c) of the Act and they pay rent for their accommodation, the actual rent paid must be allocated between them on a reasonable basis. For example, an allocation could be made on the basis of income earned from the applicable source. Similarly, when the residence is owned and occupied by the couple, the fair rental value of the residence should be allocated between the spouses on a reasonable basis.
We trust that these comments will be of assistance.
Yours truly,
Jim Wilson
for Director
Business and Publications Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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