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 waiver of monthly condo fees in exchange for performing bookkeeping duties results in income to be reported on a T4 slip.
Position: It is a question of fact, but most likely yes.
Reasons: If the benefit to be provided in exchange for the services was known at the time the treasurer accepted the office, the amount of the condo fees waived would be income from an office.
XXXXXXXXXX 2011-039378
Rita Ferguson
519-645-5261
March 4, 2011
Dear XXXXXXXXXX :
Re: Technical Interpretation - Condominium Fees
This is in response to your letter of January 24, 2011 inquiring about the tax consequences of waiving condominium fees in exchange for services provided by the Treasurer of your condominium corporation. You have asked whether the value of the fees that have been waived should be reported on a T4 slip.
Written confirmation of the tax implications inherent in particular transactions is given by this Directorate only where the transactions are proposed and are the subject matter of a request for an advance income tax ruling submitted in the manner set out in Information Circular 70-6R5, "Advanced Income Tax Rulings", dated May 17, 2002. This Information Circular and other Canada Revenue Agency ("CRA") publications can be accessed on the internet at http://www.cra-arc.gc.ca. Where the particular transactions are complete, the inquiry should be addressed to the relevant tax services office, a list of which is available on the "Contact Us" page of the CRA website. Although we cannot comment on your specific situation, we are prepared to provide the following comments in respect of the issues that you raised. Please note, however, that these comments are of a general nature only and are not binding on the CRA.
The CRA's position with respect to the income tax implications of a barter transaction is outlined in Interpretation Bulletin IT-490, "Barter Transactions". The principle of a barter transaction is described in paragraph 3 of IT-490 as one where "two persons agree to a reciprocal exchange of goods or services and carry out that exchange usually without using money". The CRA takes the view that barter transactions are within the purview of sections 3 and 9 of the Income Tax Act (the "Act") for the purposes of determining whether an amount has been paid as consideration for goods or services. In your situation the value of the waived condominium fees would be viewed as consideration received by the Treasurer for the services rendered and would therefore constitute income.
Generally, an amount paid to an individual as consideration for services rendered will be taxable either as income from an office or employment or as income from a business depending on the particular circumstances. An "office" means the position of an individual entitling the individual to a fixed or ascertainable stipend or remuneration and includes positions where the incumbent is elected or appointed in a representative capacity, and the position of a corporation director.
From the information available, it appears that the Treasurer position meets the definition of an "office" for purposes of the Act. Subject to certain listed exceptions, none of which would apply to this situation, paragraph 6(1)(a) of the Act requires that the value of any benefits received or enjoyed by a taxpayer in the year in respect of, in the course of, or by virtue of an office or employment be included in the taxpayer's income from that office or employment. Such amounts should be reported by the payer on a T4 slip. Guide T4130, "Employers' Guide - Taxable Benefits and Allowances" provides information about deductions that may be applicable.
We trust that these comments have been of assistance.
Yours truly,
Renée Shields
for Director
Business and Partnerships Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch
All rights reserved. Permission is granted to electronically copy and to print in hard copy for internal use only. No part of this information may be reproduced, modified, transmitted or redistributed in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, or stored in a retrieval system for any purpose other than noted above (including sales), without prior written permission of Canada Revenue Agency, Ottawa, Ontario K1A 0L5
© Her Majesty the Queen in Right of Canada, 2011
Tous droits réservés. Il est permis de copier sous forme électronique ou d'imprimer pour un usage interne seulement. Toutefois, il est interdit de reproduire, de modifier, de transmettre ou de redistributer de l'information, sous quelque forme ou par quelque moyen que ce soit, de facon électronique, méchanique, photocopies ou autre, ou par stockage dans des systèmes d'extraction ou pour tout usage autre que ceux susmentionnés (incluant pour fin commerciale), sans l'autorisation écrite préalable de l'Agence du revenu du Canada, Ottawa, Ontario K1A 0L5.
© Sa Majesté la Reine du Chef du Canada, 2011