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.
JAN 10 1989
To: Mr. C.D. McDonald Director General Legislative Affairs Directorate
From: Small Business and General Division E. Mikhail 957-2095
Bi-Model Transport Vehicles
We have been asked to determine the proper prescribed classes for capital cost allowance purposes for the following bi-modal transport vehicles:
1. the Mark IV and Mark V highway-rail dry van freight trailer;
2. the rail bogie for Mark IV and Mark V;
3. container railer trailer;
4. dumprailer; and
5. refrigerator railer freight trailer.
We enclose brochures describing the vehicles in greater detail. The Mark IV and Mark V highway-rail dry van freight trailers and rail bogies are presently widely used on several major railroads in the U.S. In Canada, the Mark IV and Mark V are used in the highway mode only. The Mark IV and Mark V are used to deliver goods in the rail mode to U.S. rail centres next to the Canadian border with onward movement to Canadian destinations in the highway mode. All other transport vehicles are still under development and are expected to be ready for commercial use in about a year's time. All transport vehicles will be used by residents and non-residents alike to earn income in North America. The useful life of these vehicles is expected to be at least seven years except rail bogies which are expected to have a useful life of 20 years.
It is our view that the prescribed classes in Schedule II at present do not adequately provide for the tax treatment of bi-modal transport vehicles. We are inclined to include all bi-modal transport vehicles except rail bogies in class 10(e) as trailers as opposed to in class 35 as railway cars or in class 8(i) as railway rolling stock. However, we believe a specific amendment to class 10 would be required to ensure that this type of equipment does fit into that class. We would include rail bogies in class 8(i). However, we feel another class, such as class 35, would be more appropriate for rail bogies in light of their longer expected useful life. An amendment to class 35 would be required to include rail bogies in that class.
This matter had previously been discussed with Mr. Drew C. Burnett who suggested that this be referred to your Directorate so that it may be forwarded to the Department of Finance for their consideration. Please advise us of the views of the Department of Finance so that we in turn may advise the taxpayer of the outcome. XXXX may be contacted at XXXX for additional information concerning these transport vehicles.
Original signed by for Director General Specialty Rulings Directorate Legislative and Intergovernmental Affairs Branch
Enclosure
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, 1989
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, 1989
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