20 September 1990 Income Tax Severed Letter ACC9610 - T1-CP Summary and Supplementary (Rev 90(E))

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.

September 20, 1990

Returns Processing Division             Technical Publications
Information Returns Group               Division
L. Shevkenek                            Technical Review Section
                                        Esta Mikhail
Attention:  Chris Foran                (613) 952-3606

HAV 1417-2 T1-CP 7-902475

SUBJECT: T1-CP Summary and Supplementary, Rev. 90(E)

We have reviewed form T1-CP Summary and Supplementary for technical accuracy. Our review was based on the provisions of the Income Tax Act, draft amendments to the Income Tax Act embodied in Bill C-28 and the Technical Bill released on July 13, 1990. Our comments are presented below and are cross-referenced to the related mock-up copies, copies of which are enclosed. Additional comments of a cosmetic nature are indicated on the mock-up copies as well.

T1-CP Summary

1.        We would suggest a statement be added here indicating
          that this information return is required to be filed
          under the provision of section 225 of the Regulations in
          respect of "certified productions" as defined in
          Regulation 1104(2).  This would help the preparer of this
          return.

2.        This return is required to be prepared for the 1990   
          calendar year.  However, the top paragraphs refer to 1990 
          as "the particular year", the "taxation year" and  
          "calendar year" and thereby may create some confusion in
          a reader's mind.  We would suggest that 1990 be         
          consistently referred to as "the 1990 calendar year". 
          The reference to "the 1990 calendar year" would then also 
          specifically tie in with instructions for use of Box (1) 
          on the T1-CP Supplementary, which specifically refer to 
          "1989".

3.        Regulation 225(1)(a) requires that an information return 
          be prepared "in respect of any person who owns an
          interest `in a certified production' at the end of the
          year".  We do not believe the second paragraph reflects
          this requirement.  Could this be clarified?

4.        The last sentence "the forms are required for each year 
          principal photography or taping is carried out for each 
          film or tape" is somewhat confusing.  Is the intent here 
          to say that a separate T1-CP Supplementary is required  
          where a person owns an interest in more than one
          certified production at the end of 1990?  Could this be
          clarified?

5.        It seems to us the penalty for late filing would be a   
          minimum of $100 and if the return is filed more than4   
          days late, it would increase by $25 per day up to a     
          maximum of $2,500.  See 162(7).

6.        We did not check the taxation centres and areas.  Would
          it be useful to add telephone numbers as well?  T1-CP
          Supplementary Back printing of copy 4.

7.        Box 20.  Could very brief instructions be added about
          what to do if the social insurance number is not known or
          if the taxpayer does not have a social insurance number
          such as would be the case, for example, if the investor
          is a corporation, trust or partnership.

8.        Box 19.  Certified productions acquired after 1987 are  
          included in class 10(w).  Transitional provisions provide
          that certified productions acquired after 1987 are 
          included in class 12(n).  Paragraph (b) of these      
          transitional provisions clearly no longer applies to
          1990.Paragraph (a) of the transitional provisions
          probably no longer applies either.  Accordingly,
          consideration could be given to deleting the reference
          here to class 12.We would suggest that the reference here
          to "as described in section 1100 of the Income Tax
          Regulations" be deleted.  Class 10 and class 12 are
          described in Schedule II and not in section 1100 of the
          Regulations.  Back printing of copy 2 and 3.

9.        Col (2).  The phrase here "December 31 last year" would 
          refer to December 31, 1990.  However, in comments
          presented under Col (3)(i), (ii) and (iii), the phrase 
          "current year" also refers to 1990.  Could consideration
          be given to choosing some consistent terminology so as
          not to confuse a reader? If this form is updated on an
          annual basis, perhaps a reference to the "last year" and
          "current year" could be reworded "the 1990 calendar
          year".

10.       Col (6).  In light of our comments under 1/8 above, you 
          may no longer need Col (6).

11.       Col (8).  For a class 10(w) property, the additional CCA 
          allowance calculated under Regulation 1100(1)(b) is the 
          lesser of (a) income in the year from all certified    
          productions net of related expenses and net of the amount 
          of capital cost allowance to be deducted under Regulation 
          1100(1)(a); and (b) Col (7) minus the amount of capital 
          cost allowance to be deducted under Regulation
          1100(1)(a).  It seems to us the present wording "total
          income in the year from all certified productions before
          claiming this additional deduction" is somewhat
          misleading and incomplete.  Could this be reworded?

If you wish to discuss any of these matters, please feel free to call Ms. Esta Mikhail.

Bernhard Buetow Chief Technical Review Section Technical Publications Division Legislative Affairs Directorate

Enclosures