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: Whether partnership will be eligible for accelerated CCA for replacement computer which is year 2000 compliant.
Position: No.
Reasons: The present computer was not acquired by the partnership before 1998.
XXXXXXXXXX 990216
B. G. Dodd
May 18, 1999 (613) 957-8953
Dear XXXXXXXXXX:
Re: Year 2000 Computer Compliance
We are writing in reply to your letter dated January 26, 1999.
On June 11, 1998, the Minister of Finance announced income tax measures to assist small and medium sized businesses with the year 2000 computer compliance problem. These proposed measures take the form of an accelerated capital cost allowance deduction for computer hardware and software acquired to replace systems that are not year 2000 compliant. This is to be implemented through amendments to the Income Tax Regulations, particularly by the addition of proposed paragraphs 1100(1)(zg) and (zh). Among other things, these provide that the taxpayer must acquire the replacement property after 1997 and before July 1999 and the property which is being replaced (i.e., the non-compliant computer hardware or software) must have been acquired by the taxpayer before 1998.
It is our understanding that you acquired a computer system prior to 1998 for personal use and after 1997, transferred it to your business which is being conducted as a partnership. Applying the above noted draft regulations in this situation, in view of the fact that the partnership did not acquire the present computer system before 1998, the partnership’s acquisition of a replacement system would not be eligible for the proposed accelerated capital cost allowance deduction.
We regret our reply could not be more favourable.
Yours truly,
for Director
Resources, Partnerships and Trusts Division
Income Tax Rulings and Interpretations Directorate
Policy and Legislation Branch
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