7 September 1990 Income Tax Severed Letter - Review of T1-CP Summary and Supplementary, Rev. 90

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.

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 filled 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 instruction 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 than 4 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

• 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 #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.