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:
XXXXXXXXXX requests that we clarify our position concerning the deductibility of alimony in light of the Pepper decision.
Position TAKEN:
Confirmed that if the amounts would have been deductible if paid to the former spouse, their deductibility will not be altered by assignment and the Pepper decision is the current Departmental position.
Reasons FOR POSITION TAKEN:
XXXXXXXXXX
If these payments were deductible as alimony prior to assignment, they will continue to be deductible as if they had been paid directly to the former spouse. This has been incorporated in paragraph 33 of IT-530 dated January 11, 1999.
XXXXXXXXXX 5-983270
D. Miller
February 26, 1999
Dear XXXXXXXXXX:
Re: Alimony Deduction
This is in reply to your letter of November 30, 1998, in which you requested that we confirm your understanding that the Department has changed its position to reflect the recent Tax Court of Canada decision, Chris Pepper v. The Queen, (97 DTC 3254).
In accordance with the Pepper decision, the Department is now of the opinion, that when amounts are paid to a provincial authority because of an assignment of rights, the amounts will be deductible by the payer as alimony provided they would have been deductible if paid directly to the former spouse. In this regard, we refer you to paragraph 33 of Interpretation Bulletin IT-530, Support Payments, which was released on January 11, 1999.
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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