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.
September 4, 1985
TO: Audit Directorate Specialized Audit Division ATTENTION: Mr. Claude Lemelin
FROM: Corporate Rulings Directorate Bilingual Services & Finance Division B. Fioravanti Tel.: 995-1787
RE: XXXX Limited Partnership (the "Partnership")
Further to our meetirg of August 30, it is evident that a direct reply to the Vancouver District Office concerning their memorandum of June 24 would serve no useful purpose since you will be meeting with them the week of September 16. In this regard, we trust that the following summary of the conclusions reached in our discussions will be of assistance in your dealings with respect to this matter.
TIMING
XXXX
The argument that the interim financing fee was incurred by the Partnership in the course of borrowing money pursuant to paragraph 20(1)(e) was considered. However, since all the arrangements were in fact made prior to the coming into existence of the Partnership it was agreed that the Department's position should be maintained, i.e. the cost should be capitalized. The reasonableness of the fee is also in question.
With respect to the initial leasing costs, it was concluded, for the same reason, that the Department's position should be maintained. These positions are set out in the proposed Interpretation Bulletin entitled "Soft Costs - Buildings Under Construction" which, we understand has been approved.
Lease Inducement Payments
This issue is currently under consideration and we will notify you by telephone as soon as it is resolved.
Amortization
This involves initial leasing fees of some XXXX plus legal fees and site survey costs. These were considered to be similar in nature to the lease inducement payments and it was suggested that perhaps the same treatment should be afforded to them.
Chief Finance & Leasing Section Bilingual Services & Finance Division Corporate Rulings Directorate Legislation Branch
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