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.
Principal Issues: Whether the costs incurred by two separate Public-Private projects for designing and building two road and bridge projects would be classified as roads (Class 17) and bridges (Class 1), by reason of paragraph 13(7.5)(b) of the Act.
Position: Question of fact - no specific comments.
Reasons: This is a completed transaction and we don't have all the facts. The matter should be handled by the appropriate TSO.
Michael Cooke, C.A.
December 22, 2010
Dear XXXXXXXXXX :
Re: Treatment of Costs Involved in Two Public-Private Projects
This is in response to your facsimile of November 30, 2010, wherein you asked whether the costs incurred by two separate Public-Private projects for designing and building two road and bridge projects would be classified as roads (Class 17) and bridges (Class 1), by reason of paragraph 13(7.5)(b) of the Income Tax Act (the "Act"), as opposed to being treated as costs for a concession or licence described in Class 14 of the Regulations to the Act (the Regulations) for the purpose of claiming deductions for capital cost allowance under 20(1)(a) of the Act.
The situation you described involves completed transactions of specific taxpayers. It is not this Directorate's practice to comment on the income tax consequences of completed transactions involving specified taxpayers since that responsibility rests with the applicable taxpayer's Tax Service Office ("TSO"). Since in the situations you describe, the Canada Revenue Agency ("CRA") would require a complete understanding of all relevant facts, which would include a review of the particular terms and conditions of any contracts or agreements entered into by the parties, or other relevant documentation regarding such transactions. The CRA might also need to consider if there would be any ancillary consequences as a result of the particular partnerships being subject to the SIFT rules or the rules for tax shelters. Accordingly, we are unable to provide you with any specific comments and we recommend that you should refer this matter to the appropriate TSO for their consideration.
Business and Partnerships Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch
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