Schedule II

Table of Contents

Class 1

Cases

The Queen v. Hampton Golf Club Ltd., 86 DTC 6513, [1986] 2 CTC 403 (FCTD)

Golf Club greens and tees were "not so obviously artificial as to be readily distinguishable from the natural earth surroundings of the rest of...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Regulations - Schedules - Schedule II - Class 1 - Paragraph 1(q) golf club greens not a structure 45

See Also

Repsol Canada Ltd. v. The Queen, 2015 TCC 21, aff'd 2017 FCA 193

The taxpayers were related companies, and the general partner and a 75% limited partner of a partnership which constructed a terminal and jetty in...

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Words and Phrases
distribution processing

Lansdowne Equity Ventures Ltd. v. The Queen, 2007 DTC 3, 2006 TCC 565

Mobile homes with axles, wheels, trailer hitches, brakes and emergency lights but which were now sitting on blocks were found to be "trailers"...

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Swan Lake Recreation Resort Ltd. v. Registrant, Kamloops Land Title Office (1999), 174 DLR (4th) 549 (BCSC)

Before going on to find that a mail box was not a "building" for purposes of the Condominium Act (B.C.), Cowan J. stated (at p. 565):

"In my view,...

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Administrative Policy

8 January 2008 Internal T.I. 2007-0254881I7 F - Amortissement d'une aire de camping

Regarding the classification of a septic tank on a campground, the Directorate referred to Superior Pre-Kast Septic Tanks ([1978] 2 S.C.R. 612),...

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Words and Phrases
structure
Locations of other summaries Wordcount
Tax Topics - Income Tax Regulations - Schedules - Schedule II - Class 17 costs of developing a campground would generally be added to Class 17(c) 98
Tax Topics - Income Tax Regulations - Regulation 1100 - Subsection 1100(17) campground, if a business, not subject to leasing property restriction rule 108
Tax Topics - Income Tax Regulations - Schedules - Schedule II - Class 6 swimming pool is a water storage tank 98

Paragraph 1(n)

Cases

Canada v. Repsol Energy Canada Ltd., 2017 FCA 193

The taxpayers were the partners of a limited partnership which constructed a terminal and jetty in St. John to which liquid natural gas would be...

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Paragraph 1(q)

Cases

Stearns Catalytic Ltd. v. The Queen, 90 DTC 6286, [1990] 1 CTC 398 (FCTD)

Two shelters which enclosed equipment in order to muffle noise were found to constitute buildings or other structures for purposes of Class 3...

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The Queen v. Hampton Golf Club Ltd., 86 DTC 6513, [1986] 2 CTC 403 (FCTD)

Golf Club greens and tees were "not so obviously artificial as to be readily distinguishable from the natural earth surroundings of the rest of...

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Words and Phrases
structure

British Columbia Forest Products Ltd. v. MNR, 71 DTC 5178, [1971] CTC 270 (SCC)

Supporting piers, reinforced concrete foundations and chest walls which facilitated and were necessary for the production of paper nonetheless had...

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Words and Phrases
structure building

See Also

Agence du revenu du Québec c. Adélard Soucy (1975) Inc., 2021 QCCA 1050

The taxpayer custom-fabricated pieces of heavy specialized equipment at the northern mining site of one of its mining customers. In order for its...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Regulations - Schedules - Schedule II - Class 8 a movable structure for warming a soldering operation was not described in Class 8 437

Lloyd v. The Queen, 2002 DTC 1493 (TCC)

Before going on to find that a building was a Class 6 rather than Class 3 property because it had no footings rather base support below ground...

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Locations of other summaries Wordcount
Tax Topics - General Concepts - Effective Date taxpayer can attack own transaction as legally ineffective 138
Tax Topics - General Concepts - Tax Avoidance taxapyer can argue legally ineffective transactions 139
Tax Topics - Income Tax Act - Section 84.1 - Subsection 84.1(1) 76

Sun Life Assurance Co. of Canada v. The Queen, 97 DTC 422 (TCC)

Bowman TCJ. followed his earlier decision in Cadillac Fairview Corp. Ltd. in finding that density rights purchased by the taxpayer from a nearby...

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Words and Phrases
land building
Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 13 - Subsection 13(21) - Undepreciated Capital Cost - A density rights are land even if building constructed 87

Cadillac Fairview Corp. Ltd. v. The Queen, 97 DTC 405, [1996] 2 CTC 2197 (TCC)

The taxpayer expended $11.2 million in obtaining zoning changes that were desirable for the proposed Phase II of the Eaton Centre (i.e.,...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 13 - Subsection 13(21) - Undepreciated Capital Cost - A costs of density rights were land costs 212

Superior Pre-Knit Septic Tanks Ltd. v. The Queen, 78 DTC 6263, [1978] CTC 431 (SCC)

Pre-cast concrete septic tanks were "structures". (Excise Tax Act (Canada), s. 26(4).)

Administrative Policy

16 March 2012 External T.I. 2012-0432101E5 F - Acquisition d'un séparateur d'huile

Respecting an oil separator acquired by a garage in order to meet government requirements, CRA stated:

To the extent that an oil separator is an...

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17 December 2014 External T.I. 2014-0560281E5 - Arena and skateboard park - CCA classes

The taxpayer constructed a hockey arena and a skateboard park for use in its children's summer camp. CRA stated:

"Building" is a term of wide...

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IT-79R3 "Capital Cost Allowance - Buildings or other Structures"

Meaning of building/structure

1. "Building" is a term of wide range covering any structure with walls and a roof affording protection and shelter....

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Words and Phrases
building structure

Class 2

Cases

Gulf Canada Resources Ltd. v. The Queen, 95 DTC 5189, [1995] 1 CTC 334 (FCTD), partially rev'd 96 DTC 6065 (FCA).

A 2200 ft. extension to a concrete water intake line that provided water for use in a refinery was not established by the taxpayer to not be a...

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Pacific Northern Gas Ltd. v. The Queen, 90 DTC 6252, [1990] 1 CTC 380 (FCTD), aff'd 91 DTC 5287 (FCA)

After noting that the decisions in Nova and in Northern and Central Gas were essentially contradictory on this point, Joyal J. found (following...

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Nova, an Alberta Corporation v. The Queen, 88 DTC 6386, [1988] 2 CTC 167 (FCA)

Pipes and valves located between the inlet and outlet connections of the main pipeline and to and from the compressor station and metering...

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Alberta Oil Sands Pipeline Ltd. v. The Queen, 88 DTC 6059, [1988] 1 CTC 99 (FCTD)

Linefill was not part of a pipeline and accordingly was a Class 8 asset.

Locations of other summaries Wordcount
Tax Topics - General Concepts - Ownership owner of continually changing linefill 49
Tax Topics - Income Tax Act - Section 13 - Subsection 13(21) - Depreciable Property property consisted of shifting molecules 94
Tax Topics - Income Tax Regulations - Schedules - Schedule II - Class 8 15

Northern and Central Gas Corp. Ltd. v. The Queen, 85 DTC 5144, [1985] 1 CTC 192 (FCTD), aff'd 87 DTC 5439, [1987] 2 CTC 241 (FCA)

The subparagraphs of class 2 were intended to encompass the whole process of the production and distribution of electricity, heat, water and...

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Class 3

See Also

MNR v. Plastibeton Inc., 86 DTC 6400, [1986] 2 CTC 211 (FCA)

Highway medians constructed of precast polymer concrete were not a separate structure from the highway, but merely a part of the structure of the...

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Plan A Leasing Ltd. v. The Queen, 76 DTC 6159, [1976] CTC 261 (FCTD)

An individual ("Lunenfeld") conveyed a building to a corporation ("159 Bay") and conveyed the underlying land to a second corporation ("Great...

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Administrative Policy

28 April 2004 External T.I. 2004-0064781E5 - Classification of Conduit

Underground conduit which carries wire or cable referred to in paragraph (j) of Class 3 is a Class 3 rather than a Class 8 asset.

Class 4

Administrative Policy

16 November 2009 External T.I. 2009-0313081E5 F - Classification d'un chemin de fer avant 1958

Into what class does a railway system acquired before 1958 by a corporation with a railway business fall? After assuming that the corporation was...

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Words and Phrases
common carrier

Class 6

Administrative Policy

18 December 2013 External T.I. 2013-0479421E5 F - Section 30 and Cranberry Farm

Following Oriole Fair Parkways (56 DTC 537), the costs of constructing an artificial pond for use in irrigating a cranberry farm would be in...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(b) - Capital Expenditure v. Expense - Improvements v. Repairs or Running Expense initial cranberry plant planting is a cost of land 94
Tax Topics - Income Tax Act - Section 30 costs of clearing, levelling and draining lands, but not of constructing basins, for a cranberry farm are currently deductible 136
Tax Topics - Income Tax Regulations - Schedules - Schedule II - Class 17 costs of constructing cranberry farm basins included in Class 17 79
Tax Topics - Income Tax Regulations - Schedules - Schedule II - Class 8 irrigation system included, drainage costs deductible under s. 30 79

8 January 2008 Internal T.I. 2007-0254881I7 F - Amortissement d'une aire de camping

Regarding the classification of a swimming pools in a campground, the Directorate stated:

As for swimming pools that may be found at campgrounds,...

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Words and Phrases
water storage tank
Locations of other summaries Wordcount
Tax Topics - Income Tax Regulations - Schedules - Schedule II - Class 17 costs of developing a campground would generally be added to Class 17(c) 98
Tax Topics - Income Tax Regulations - Regulation 1100 - Subsection 1100(17) campground, if a business, not subject to leasing property restriction rule 108
Tax Topics - Income Tax Regulations - Schedules - Schedule II - Class 1 septic tanks are structures 167

Paragraph (e)

Administrative Policy

17 July 2007 External T.I. 2007-0220121E5 F - Lac artificiel - catégorie d'amortissement

Before finding that the costs of creating an artificial lake to be used for a fishing resort should be included in Class 6, CRA noted:

Oriole...

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Words and Phrases
water storage tank

Class 7

Administrative Policy

12 March 2012 Internal T.I. 2011-0431631I7 F - Catégorie d'amortissement- maison flottante

What is the applicable class for a floating home or "houseboat" (on a large pontoon with an outboard motor) that is rented out for navigation of a...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 13 - Subsection 13(21) - Vessel vessel is as defined in Canada Shipping Act, 2001 115
Tax Topics - Statutory Interpretation - Interpretation Act - Section 44 - Paragraph 44(h) IA s. 44(h) applied to reference definition in replacement Canada Shipping Act 48

Paragraph 7(c)

Administrative Policy

25 November 2010 External T.I. 2010-0377841E5 F - Catégorie d'amortissement - bateau

The engine of a boat has been removed (so that to be moved, it would need to be towed) and it is kept moored at a dock for use in an (unspecified)...

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Locations of other summaries Wordcount
Tax Topics - Statutory Interpretation - Interpretation Act - Section 44 - Paragraph 44(h) “vessel” informed by meaning in replacement Canada Shipping Act 166
Tax Topics - Income Tax Act - Section 13 - Subsection 13(21) - Vessel "vessel" now defined in (replacement) Canada Shipping Act, 2001 55

Class 8

Cases

Coopers & Lybrand Ltd., Trustee of Hawboldt Hydraulics (Canada) Inc. v. The Queen, 92 DTC 6452, [1992] 2 CTC 363 (FCTD)

An operation of fabricating cylinders, pistons, rods or other parts to be incorporated into hydraulic components which customers of the taxpayer...

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Stearns Catalytic Ltd. v. The Queen, 90 DTC 6286, [1990] 1 CTC 398 (FCTD)

A stock of spare parts which the taxpayer kept on hand for potential use in the event of machine or equipment failure did not qualify as property...

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Pacific Northern Gas Ltd. v. The Queen, 90 DTC 6252, [1990] 1 CTC 380 (FCTD), aff'd 91 DTC 5287 (FCA)

After noting that the decisions in Nova and in Northern and Central Gas were essentially contradictory on this point, Joyal J. found (following...

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Nowsco Well Service Ltd. v. The Queen, 88 DTC 6300, [1988] 2 CTC 24 (FCTD)

Equipment which was designed for use in enhancing the flow of oil at an oil well, but which with a special licence could be driven on a highway as...

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Alberta Oil Sands Pipeline Ltd. v. The Queen, 88 DTC 6059, [1988] 1 CTC 99 (FCTD)

Linefill was not part of a pipeline and accordingly was a Class 8 asset.

Locations of other summaries Wordcount
Tax Topics - General Concepts - Ownership owner of continually changing linefill 49
Tax Topics - Income Tax Act - Section 13 - Subsection 13(21) - Depreciable Property property consisted of shifting molecules 94
Tax Topics - Income Tax Regulations - Schedules - Schedule II - Class 2 15

Northern and Central Gas Corp. Ltd. v. The Queen, 85 DTC 5144, [1985] 1 CTC 192 (FCTD), aff'd 87 DTC 5439, [1987] 2 CTC 241 (FCA)

The subparagraphs of class 2 were intended to encompass the whole process of the production and distribution of electricity, heat, water and...

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Nova Construction Co. Ltd. v. The Queen, 83 DTC 5105, [1983] CTC 58 (FCTD)

The Act contemplates that an activity may constitute both manufacturing or processing and construction. Accordingly, it was found that an asphalt...

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Butler v. MNR, 67 DTC 5019, [1967] CTC 7 (Ex Ct)

The value of customer lists of an accounting practice purchased by an accounting firm was in their intangible value as goodwill. Accordingly, the...

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Southam Business Publications Ltd. v. MNR, 66 DTC 5215, [1966] CTC 265 (Ex. Ct.), briefly aff'd 67 DTC 5150 (SCC)

As part of the purchase of the Financial Times, the taxpayer paid $50,000 for the customer lists of the vendor. Noël J. found that what was of...

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See Also

Agence du revenu du Québec c. Adélard Soucy (1975) Inc., 2021 QCCA 1050

The taxpayer custom-fabricated pieces of heavy specialized equipment at the northern mining site of one of its mining customers. In order for its...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Regulations - Schedules - Schedule II - Class 1 - Paragraph 1(q) a movable structure for warming M&P equipment was a Class 1(q) building 369

Roy Legumex Inc. v. MNR, 90 DTC 1858, [1990] 2 CTC 2389 (TCC)

Containers which were used to dry legumes in order that they could be split were found to be structures that were manufacturing or processing...

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Re St. Lawrence Cement Inc. (1985), 52 OR (2d) 545 (HCJ.)

Various silos owned by a cement operator were not "machinery" because their primary function was storage and nothing physical happened in them...

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Administrative Policy

S3-F4-C1 - General Discussion of Capital Cost Allowance

Choice among classes

1.120 The phrase "property that would otherwise be included in" appears in several classes in Schedule II, which could lead...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(b) - Capital Expenditure v. Expense - Improvements v. Repairs or Running Expense 556
Tax Topics - Income Tax Act - Section 13 - Subsection 13(21) - Undepreciated Capital Cost - A 791
Tax Topics - Income Tax Act - Section 13 - Subsection 13(21) - Depreciable Property 218
Tax Topics - Income Tax Act - Section 16.1 - Subsection 16.1(1) 275
Tax Topics - Income Tax Act - Section 13 - Subsection 13(28) 254
Tax Topics - Income Tax Act - Section 13 - Subsection 13(27) 222
Tax Topics - Income Tax Act - Section 13 - Subsection 13(29) 155
Tax Topics - Income Tax Regulations - Regulation 1100 - Subsection 1100(2) 212
Tax Topics - Income Tax Regulations - Regulation 1100 - Subsection 1100(2.2) 351
Tax Topics - Income Tax Regulations - Regulation 1100 - Subsection 1100(3) 70
Tax Topics - Income Tax Act - Section 18 - Subsection 18(3.1) 166
Tax Topics - Income Tax Act - Section 13 - Subsection 13(7.5) 207
Tax Topics - Income Tax Act - Section 261 - Subsection 261(2) 65
Tax Topics - Income Tax Act - Section 128.1 - Subsection 128.1(1) - Paragraph 128.1(1)(b) 230
Tax Topics - Income Tax Regulations - Regulation 1102 - Subsection 1102(1) - Paragraph 1102(1)(c) 170
Tax Topics - Income Tax Act - Section 13 - Subsection 13(7) - Paragraph 13(7)(e) 65
Tax Topics - Income Tax Act - Section 43 - Subsection 43(1) 152
Tax Topics - Income Tax Act - Section 68 197
Tax Topics - Income Tax Act - Section 13 - Subsection 13(21.1) - Paragraph 13(21.1)(a) 75
Tax Topics - Income Tax Act - Section 13 - Subsection 13(21.1) - Paragraph 13(21.1)(b) 212
Tax Topics - Income Tax Act - Section 13 - Subsection 13(1) 431
Tax Topics - Income Tax Act - Section 8 - Subsection 8(2) 75
Tax Topics - Income Tax Act - Section 20 - Subsection 20(16.1) 152
Tax Topics - Income Tax Act - Section 13 - Subsection 13(9) 229
Tax Topics - Income Tax Act - Section 152 - Subsection 152(4) 321
Tax Topics - Income Tax Act - Section 13 - Subsection 13(5) 317
Tax Topics - Income Tax Act - Section 13 - Subsection 13(6) 221

12 June 2014 External T.I. 2014-0527651E5 - Whether keeping a zoo is a farming activity

CRA stated that zoo animals:

are capital assets and cannot be expensed. In addition, no capital cost allowance may be deducted under paragraph...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Farming zoo not farming 122

18 December 2013 External T.I. 2013-0479421E5 F - Section 30 and Cranberry Farm

In converting lands to a cranberry farm, there would need to be a reasonable allocation of the relevant costs between the cost of installing a...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(b) - Capital Expenditure v. Expense - Improvements v. Repairs or Running Expense initial cranberry plant planting is a cost of land 94
Tax Topics - Income Tax Act - Section 30 costs of clearing, levelling and draining lands, but not of constructing basins, for a cranberry farm are currently deductible 136
Tax Topics - Income Tax Regulations - Schedules - Schedule II - Class 17 costs of constructing cranberry farm basins included in Class 17 79
Tax Topics - Income Tax Regulations - Schedules - Schedule II - Class 6 costs of constructing irrigation pond included 33

20 March 2013 External T.I. 2012-0442571E5 F - Coût d'acquisition d'un terrain

A developer acquired Land 1 from a Canadian-controlled private corporation (the “Corporation”) in exchange for cash and for land which the...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 54 - Adjusted Cost Base cost of land acquired from developer equal to total barter value minus amounts allocated to Classes 8 and 17 152

7 August 2007 Internal T.I. 2007-0240691I7 - Music CD production-CCA class

A company incurred costs of studio fees, mixing, song writing, and musicians' fees in producing a music CD. If these are capital expenditures,...

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13 December 1994 External T.I. 9416075 - RAPID TRANSIT CAR

A rapid transit car that is a railway car will not fall within Class 8(k) but, rather, within Class 35 (if acquired after 25 May 1976).

4 August 1992 T.I. 921654 (April 1993 Access Letter, p. 132, ¶C9-259)

18-litre bottles used to hold water delivered to customers' premises until returned to the taxpayer for refilling by it belong to Class 8 rather...

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9 April 1992 Memorandum (Tax Window, No. 18, p. 15, ¶1870)

Styroblocks that are used in seed boxes for starting young trees do not meet the requirements of Class 12 (tools or returnable containers) and,...

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11 October 1991 T.I. (Tax Window, No. 11, p. 4, ¶1520)

A desktop publishing system did not constitute general-purpose electronic data processing equipment and system software therefor and therefore is...

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7 October 1991 T.I. (Tax Window, No. 10, p. 19, ¶1501)

An electronic safe for the storage and protection of investment papers qualifies as a Class 8 asset.

IT-79R3 "Capital Cost Allowance - Buildings or other Structures"

Paragraph 8(a)

See Also

Adélard Soucy (1975) Inc. v. Agence du revenu du Québec, 2019 QCCQ 6956, rev'd 2021 QCCA 1050

The taxpayer, whose business entailed the bending, cutting and assembly through soldering of metallic equipment such as junction boxes, gutters...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Regulations - Schedules - Schedule II - Class 29 building was functionally integrated with M&P so as to itself be M&P equipment 210

Québec (Sous-ministre du Revenu) v. Plastiques Simport ltée, 2007 QCCA 160

The taxpayer was engaged in the manufacture of plastic objects used in laboratories or for medical purposes, which were made by 30 machines...

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Paragrpah 8(i)

Administrative Policy

22 March 2011 Internal T.I. 2010-0387551I7 F - Dépenses - travailleur indépendant

The taxpayer operated an erotic website for which she was the model and her husband took care of the technical side, with profits split equally. ...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 8 - Subsection 8(1) - Paragraph 8(1)(h) expenses of costumes, breast implants and rejuvenation expenses of erotic website were non-deductible 165

Paragraph 8(j)

See Also

Agence du revenu du Québec v. Unidisc Musique Inc., 2021 QCCA 393

Unidisc bought master recordings of music, i.e., the magnetic tapes containing the original recordings of the music for the purpose of having them...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Regulations - Schedules - Schedule II - Class 14.1 master recordings were intangible (Class 14.1) rather than tangible (Class 8) property 341
Tax Topics - General Concepts - Onus failure to lead evidence as to allocation meant that the taxpayer was stuck with the ARQ allocation 143
Tax Topics - Income Tax Act - Section 152 - Subsection 152(8) misunderstanding by the ARQ of the Copyright provisions supporting its reassessment did not invalidate it 152

Unidisc Musique Inc.v. Agence du revenu du Québec, 2019 QCCQ 1818, rev'd 2021 QCCA 393

The plaintiff (Unidisc) was in the business of purchasing master recordings of music (“masters”), i.e., the magnetic tapes containing the...

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Words and Phrases
intangible property
Locations of other summaries Wordcount
Tax Topics - Income Tax Regulations - Schedules - Schedule II - Class 14.1 master recordings are tangible rather than intangible property 308

Class 9

Administrative Policy

11 March 2016 External T.I. 2016-0633111E5 - CCA Class of a drone

A taxpayer in the real estate business uses an aerial drone to take photographs of houses for sale. How should it be classified? CRA...

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Words and Phrases
aircraft

Class 10

Cases

Lindwest Holdings Ltd. v. The Queen, 88 DTC 6482, [1988] 2 CTC 287 (FCTD)

Equipment which both was "designed" for the purpose of excavating or moving earth and rock (Class 22) and which was acquired for logging...

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Nova, an Alberta Corporation v. The Queen, 88 DTC 6386, [1988] 2 CTC 167 (FCA)

Pipes and valves located between the inlet and outlet connections of the main pipeline and to and from the compressor station and metering...

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Nowsco Well Service Ltd. v. The Queen, 88 DTC 6300, [1988] 2 CTC 24 (FCTD)

Equipment which was designed for use in enhancing the flow of oil at an oil well, but which with a special licence could be driven on a highway as...

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The Queen v. Nomad Sand & Gravel Ltd., 87 DTC 5343, [1987] 2 CTC 112 (FCTD)

A sand and gravel pit was not a "mine", and front end loaders used in the gravel pit operation accordingly were Class 22, rather than Class 10...

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Halliburton Services Ltd. v. The Queen, 85 DTC 5336, [1985] 2 CTC 52 (FCTD), aff'd 90 DTC 6320 (FCA).

Equipment which the taxpayer bolted or welded to its trucks to be used in its well-pumping operations was held to be contractor's movable...

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Howden Brothers Construction Ltd. v. The Queen, 80 DTC 6393, [1980] CTC 529 (FCTD)

Metal sheets that were used by a contractor to construct a form in order to receive wet concrete which form was then disassembled following the...

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See Also

Suncor Energy Inc. v. The Queen, 2001 DTC 660 (TCC), aff'd 2002 DTC 7395, 2002 FCA 350

The taxpayer used the overburden and tailings produced or extracted by it in the process of extracting bitumen from oil sands deposits to...

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Words and Phrases
structure

Cargill Ltd. v. The Queen, 96 DTC 1461 (TCC)

After noting that the common elements that make up a trailer or wagon include "(i) a wheeled vehicle; (ii) drawn by another; (iii) that is...

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Gordon v. The Queen, 95 DTC 493 (TCC)

A film that was described in evidence as being over 50% complete was found to be depreciable property described in Class 10 given that it was...

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Administrative Policy

8 January 1996 External T.I. 9530675 - CLASSIFICATION OF A MOTORHOME

Motorhomes are designed primarily as recreational vehicles and do not qualify for inclusion under either Class 10.1 or Class 16 since they do not...

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31 January 1994 Internal T.I. 9328977 F - CCA Class of Building Used in Peat Processing

Regulation 1104(3), which defines mining to include the harvesting of peat, does not apply to an operation of cleaning, compressing and baking...

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24 March 1993 Memorandum (Tax Window, No. 32, p. 20, ¶2623)

Re classification of computer equipment and automotive equipment acquired for use in a mine.

10 November 1992 Memorandum 923297 (September 1993 Access Letter, p. 409, ¶20-1159)

Re whether a limestone quarry was a mine for purposes of paragraph 10(k).

2 December 1992 Memorandum (Tax Window, No. 27, p. 22, ¶2323)

An outboard motor is a class 10 asset based on a broad interpretation of the phrase "automotive equipment".

13 January 1992 T.I. (Tax Window, No. 15, p. 9, ¶1693)

If the film was not completed at the year end and will not be completed in a subsequent year, it cannot be included in Class 10.

11 October 1991 T.I. (Tax Window, No. 11, p. 4, ¶1520)

A desktop publishing system did not constitute general-purpose electronic data processing equipment and system software therefor and therefore is...

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Paragraph 10(k)

Administrative Policy

24 May 2005 External T.I. 2005-0121291E5 F - Processing in Canada of ore

Mineco crushes nickel ore underground in its mine. Opco, which operates a bulk ore hauling business in Canada, uses a mobile crushing plant (the...

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Paragraph 10(x)

Administrative Policy

17 February 2010 Internal T.I. 2009-0348461I7 F - Transfert d'une PCMC à une société mère

After a subsidiary (“Imageco”) of a Canadian-controlled private corporation (“Canco”) produced a film and DVD (the "CFVPs"), being...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(b) - Capital Expenditure v. Expense - Current expense vs. capital acquisition fully claimed films productions acquired from production sub on capital account 66

Class 12

Cases

Howden Brothers Construction Ltd. v. The Queen, 80 DTC 6393, [1980] CTC 529 (FCTD)

Metal sheets that were used by a contractor to construct a form in order to receive wet concrete which form was then disassembled following the...

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See Also

Desgagné v. The Queen, 2012 DTC 1237 [at 3664], 2012 TCC 63 (Informal Procedure)

The gowns and bands that the taxpayer, a lawyer, wore in court were covered by paragraph (f) of Class 12.

McKee v. The Queen, 77 DTC 5345, [1977] CTC 491 (FCTD)

Movie scripts which were never turned into films did not qualify as motion pictures.

Administrative Policy

29 October 2013 External T.I. 2013-0507121E5 - Website costs

Determining whether website costs are in the nature of income or capital should entail an analysis of each component of the site. The...

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24 November 2010 External T.I. 2010-0380521E5 - Web page costs

CRA indicated that the costs of application software purchased from third parties to develop a web page, and the labour costs of development,...

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26 April 1995 Internal T.I. 9506797 - CCA - BOOKPLATE COSTS

Bookplates created for the printing of books would not qualify as a "pattern, mould or die", and instead would be property described in Class 8,...

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13 April 1994 Internal T.I. 9400887 - COMPUTER SOFTWARE

When the assets of a computer software business are purchased for a lump sum purchase price, the amounts allocated to Class 12 would include not...

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23 November 1992 T.I. 923452 (September 1993 Access Letter, p. 409, ¶C20-075)

Re whether components of a specialized electronic point-of-sale inventory system for a retail application will qualify under paragraph 12(s).

7 September 1992 T.I. (Tax Window, No. 24, p. 7, ¶2189)

Most computer software acquired for use internally in a business is included in Class 12(o). However, a contractual right or licence of a capital...

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20 August 1992 T.I. (Tax Window, No. 23, p. 14, ¶2170)

A contractual right or licence of a capital nature to buy and resell, to sublet or to otherwise market computer software is not a right or licence...

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4 August 1992 T.I. 921654 (April 1993 Access Letter, p. 132, ¶C9-259)

18-litre bottles used to hold water delivered to customers' premises until returned to the taxpayer for refilling by it belong to Class 8 rather...

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4 March 1992 T.I. (Tax Window, No. 17, p. 21, ¶1782)

Videotape cassettes may be depreciated under Class 12(r) if the owner acquires them for the purpose of renting and the cassettes are not expected...

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9 April 1992 Memorandum (Tax Window, No. 18, p. 15, ¶1870)

Styroblocks that are used in seed boxes for starting young trees do not meet the requirements of Class 12 (tools or returnable containers) and,...

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3 January 1992 T.I. (Tax Window, No. 15, p. 17, ¶1681)

Re meaning of "consumers" in Class 12(s).

25 Aug. 89 T.I. (Jan. 90 Access Letter, ¶1088)

A "right or licence to use computer software" can include the right to reproduce computer software, the right to use it internally, the right to...

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18 Aug. 89 T.I. (Jan. 90 Access Letter, ¶1087)

If the Minister revokes a certification, the revocation is effective as of the date of issue of the film certificate and the asset is removed from...

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Paragraph (c)

Administrative Policy

18 May 2011 External T.I. 2011-0392441E5 F - Outils - déduction pour amortissement

In finding that small tools that the taxpayer purchased at a unit cost of less than $200 to maintain the units in a rental building (one of which...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Regulations - Regulation 1102 - Subsection 1102(1) - Paragraph 1102(1)(c) CCA claim was to be proportionately reduced based on personal use percentage 64

Class 13

Cases

The Queen v. Mount Robson Motor Inn Ltd., 81 DTC 5188, [1981] CTC 345 (FCA)

When improvements (such as 2 frame buildings and pavement for a parking area) are constructed by a tenant, they normally become the property of...

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The Queen v. Saskatoon Drug & Stationery Co. Ltd., 78 DTC 6396, [1978] CTC 578 (FCTD)

The taxpayer acquired a leasehold interest in a drug store. It was found that the terms of the lease were such that a prospective sub-lessee would...

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See Also

Plan A Leasing Ltd. v. The Queen, 76 DTC 6159, [1976] CTC 261 (FCTD)

An individual ("Lunenfeld") conveyed a building to a corporation ("159 Bay") and conveyed the underlying land to a second corporation ("Great...

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Rudnikoff v. The Queen, 75 DTC 5008, [1975] CTC 1 (FCA)

"[W]hile the general rule ... is that a substantial building becomes a part of the land and belongs to the owner of the land, this situation may...

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Administrative Policy

IT-464R "Capital Cost Allowance - Leasehold Interest"

Class 14

Cases

Bomag (Canada) Ltd. v. The Queen, 81 DTC 5085, [1981] CTC 156 (FCTD), aff'd 84 DTC 6363, [1984] CTC 378 (FCA)

The cost to the taxpayer (namely, the sum of $108,000 paid by it to terminate a previous franchise arrangment) of obtaining a contractual right to...

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Locations of other summaries Wordcount
Tax Topics - General Concepts - Purpose/Intention 51
Tax Topics - Income Tax Act - Section 13 - Subsection 13(21) - Undepreciated Capital Cost - A cost of obtaining surrender of previous contact was part of cost of new contract 36

MNR v. Canadian Glassine Co. Ltd., 76 DTC 6083, [1976] CTC 141 (FCA)

Payments made by the taxpayer to reimburse a pulp company ("Anglo-Canadian") for the costs of installing pipelines connecting the taxpayer's...

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Words and Phrases
franchise

Capital Management Ltd. v. MNR, 68 DTC 5041 (SCC)

The taxpayer purchased, from an affiliated company, the right to manage two mutual funds (which would entitle it to earn a quarterly fee of 1/8 of...

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Metropolitan Taxi Ltd. v. MNR, 67 DTC 5073 (Ex Ct), aff'd 68 DTC 5098, [1968] CTC 163 (SCC)

$70,000 of the $104,000 purchase price paid by the taxpayer for a taxicab business was allocated by it to 14 taxicab licences which had been...

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Investors Group v. MNR, 65 DTC 5120, [1965] CTC 192 (Ex Ct)

In finding that the purchase price paid for the acquisition of rights under a sales management agreement (pursuant to which the vendor had...

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Mandrell Industries, Inc. v. M.N.R., 65 DTC 5142 (Ex Ct)

The taxpayer, a manufacturer of geophysical equipment, had granted an affiliated company the exclusive right to market its products for five years...

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MNR v. Kirby Maurice Co. Ltd., 58 DTC 1033, [1958] CTC 41 (Ex Ct)

A proprietorship was granted the exclusive right to market the products of a manufacturer of vacuum cleaners in the County of York pursuant to an...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 251 - Subsection 251(1) - Paragraph 251(1)(c) purchaser exercising no independent judgment 148

Golden Arrow Sprayers Ltd. v. MNR, 61 DTC 1185 (Ex Ct)

A right to use the patents of an individual was a Class 14 property to the corporation that acquired those rights. However, the capital cost was...

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See Also

Rocheleau v. The Queen, 2010 DTC 1016 [at 2615], 2009 TCC 484 (Informal Procedure)

A contract under which the taxpayer made a total contribution of $25,500 in consideration for a company agreeing to pay to the taxpayer 5.5% of...

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Gouchee v. MNR, 67 DTC 203 (TAB)

In finding that a taxpayer, who had acquired assets of a business together with the right to use the name "V.W. Body & Paint Shop" was not...

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No. 728 v. MNR, 61 DTC 34 (TAB)

In connection with a purchase by the taxpayer from its president and general manager of the insurance business previously carried on by him, the...

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No. 678 v. MNR, 60 DTC 45 (TAB)

The assets of a proprietorship ("Beaver Oil Company") purchased by the taxpayer included "the good will of Beaver Oil Company and the exclusive...

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Administrative Policy

7 November 2011 Internal T.I. 2011-0424641I7 F - Right to cut Christmas trees

A taxpayer purchased the right to cut, over a period of 10 years, Christmas trees on another taxpayer's land for a lump sum payable over 4 years....

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 13 - Subsection 13(21) - Timber Resource Property right to cut Christmas trees was not a timber resource property 93
Tax Topics - Income Tax Regulations - Regulation 1100 - Subsection 1100(1) - Paragraph 1100(1)(e) Christmas trees are not “timber” 184

17 July 2018 External T.I. 2018-0747311E5 - Geothermal Energy Project

After noting that different licence, lease and permit fees may be imposed under the applicable provincial law in connection with a geothermal...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Regulations - Regulation 1219 - Subsection 1219(1) - Paragraph 1219(1)(h) completing an exploratory geothermal well ultimately used in production generates Class 43.1 costs, not CRCE 264
Tax Topics - Income Tax Regulations - Schedules - Schedule II - Class 43.1 - Paragraph (d) - Subparagraph (d)(viii) inclusion of cost of completing geothermal exploratory wells in fact used in production 95

30 July 2015 External T.I. 2014-0552041E5 F - Permis XXXXXXXXXX

Government permits granted to the taxpayer are renewable each year on the payment of $X. In finding that the permits were eligible capital...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 14 - Subsection 14(5) - Eligible Capital Expenditure renewable government licences were ECP, not Class 14 49

30 May 2013 External T.I. 2013-0487301E5 - 3P Project

The query noted that para. 12 of 2006-0218781R3 stated:

In return for the grant of the Concession, the Partnership will agree to construct the...

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25 January 2007 External T.I. 2006-0199451E5 - License Agreement

Amounts that the taxpayer was required to reimburse a school board for in respect of a licensed space in a school that was constructed by the...

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2007 Ruling 2006-0218781R3 - XXXXXXXXXX

A Canadian public corporation ("Z Co"), as LP, and newly-incorporated CBCA grandchild subsidiary ("GP") of Z Co, as GP, form the Partnership. The...

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16 November 1994 Internal T.I. 9414677 - FILM RIGHTS

Even though it may be likely that a CRTC licence issued for a period of five years will be extended or renewed following the expiration of that...

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9 November 1994 Internal T.I. 9425187 - PLANT BREEDERS RIGHTS ACT

Rights granted pursuant to the Breeders Act do not constitute a franchise, concession or licence for the purposes of Class 14 because the effect...

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7 September 1992 T.I. (Tax Window, No. 24, p. 7, ¶2189)

Most computer software acquired for use internally in a business is included in Class 12(o). However, a contractual right or licence of a capital...

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20 August 1992 T.I. (Tax Window, No. 23, p. 14, ¶2170)

A contractual right or licence of a capital nature to buy and resell, to sublet or to otherwise market computer software is not a right or licence...

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14 May 1990 T.I. AC59728 [bare right to income not a concession]

A payment made by a public company to acquire a contractual right to a 50% share in a partnership's net proceeds from the purchase, processing and...

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IT-283R2 "Capital Cost Allowance - Video Tapes, Videotapes Cassettes, Films, Computer Software and Master Recording Media"

A contractual right or licence of a capital nature to buy and to resell, to sublet or to otherwise market computer software is not a right or...

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IT-477 "Capital Cost Allowance - Patents, Franchises, Concessions and Licences," consolidated October 2001

15. The provisions of a franchise, concession or licence concerning renewals or extensions following the original term are relevent in...

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Articles

Shane Onufrechuk, Warren Pashkowick, "Tax Considerations of Major Construction Projects", 2014 Conference Report, Canadian Tax Foundation, 10:1-35.

Construction costs incurred for Class 14 licence (p. 10:18)

[The project] contract states that in exchange for granting the concession, the P3...

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Scheuermann, "Income and Commodity Tax Aspects of Acquiring and Exploiting Technology", 1991 Conference Report, c. 45.

Class 14.1

See Also

Agence du revenu du Québec v. Unidisc Musique Inc., 2021 QCCA 393

The respondent (Unidisc) bought master recordings of music, i.e., the magnetic tapes containing the original recordings of the songs or other...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Regulations - Schedules - Schedule II - Class 8 - Paragraph 8(j) the portion of the value of master recordings that was tangible property was not demonstrated by the taxpayer 269
Tax Topics - General Concepts - Onus failure to lead evidence as to allocation meant that the taxpayer was stuck with the ARQ allocation 143
Tax Topics - Income Tax Act - Section 152 - Subsection 152(8) misunderstanding by the ARQ of the Copyright provisions supporting its reassessment did not invalidate it 152

Perron-Ali v. The Queen, 2021 TCC 6 (Informal Procedure)

A couple wanted to start investing in rental real estate but, in the year prior to that in which they started looking seriously at potential...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(b) - Capital Expenditure v. Expense - Know-How and Training costs of training on how to invest in real estate were capital expenditures 190

Unidisc Musique Inc.v. Agence du revenu du Québec, 2019 QCCQ 1818, rev'd 2021 QCCA 393

Unidisc bought master recordings of music (“masters”), i.e., the magnetic tapes containing the original recordings of the songs or other music...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Regulations - Schedules - Schedule II - Class 8 - Paragraph 8(j) purchase cost of master music recordings was for Class 8(j) tangible property 368

Administrative Policy

27 November 2018 CTF Roundtable Q. 15, 2018-0780011C6 - Class 14.1

Class 14.1 depreciable property references “property” of the taxpayer. CRA confirmed that this does not have the effect of disqualifying...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 13 - Subsection 13(35) - Paragraph 13(35)(a) capital expenditures not giving rise to property are deemed to be goodwill property 106

19 July 2018 External T.I. 2017-0727041E5 - Legal and accounting fees - aborted share purchase

Does the position in 2002-0151405, respecting an aborted attempt to acquire shares, that “these fees qualify as eligible capital expenditures if...

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9 November 2005 Internal T.I. 2005-0154301I7 F - Choix concernant les immobilisations admissibles

On a sale of a residential care facility, the taxpayer allocated substantially all of the sale price to operating agreements with the Quebec...

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Words and Phrases
goodwill
Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 14 - Subsection 14(1.01) cost of property acquired can be nil 113

Paragraph (a)

See Also

Commissioner of State Revenue v Placer Dome Inc., [2018] HCA 59

Whether the acquisition by Barrick Gold Corporation ("Barrick") of another Canadian public company, namely, Placer Dome Inc. ("Placer") triggered...

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Words and Phrases
goodwill
Locations of other summaries Wordcount
Tax Topics - General Concepts - Fair Market Value - Other discounted cash flow valuation undervalued resource lands and residual valuation overstated goodwill 342
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Property protean nature of property concept 491

Class 16

Paragraph (e)

Administrative Policy

16 June 2010 External T.I. 2009-0344861E5 F - Actifs de la Catégorie 16

A taxable Canadian corporation acquires pick-up trucks for short-term lease (not exceeding 30 days in any 12-month period) to lessees for personal...

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Class 17

Cases

The Queen v. Mont-Sutton Inc., 99 DTC 5733, [1999] F.T.R. 33467 (FCA)

Létourneau J. A. found that the types of surface construction referred to in Class 17(c) had the following characteristics: first the land which,...

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Words and Phrases
surface construction

Administrative Policy

27 March 2014 External T.I. 2014-0520941E5 F - Industrial mineral mine and related expenditures

The costs of a temporary access road to a quarry would not be considered to be in respect of a "specified temporary access road" as defined in...

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18 December 2013 External T.I. 2013-0479421E5 F - Section 30 and Cranberry Farm

In converting lands to a cranberry farm, there would need to be a reasonable allocation of the relevant costs between the cost of installing a...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(b) - Capital Expenditure v. Expense - Improvements v. Repairs or Running Expense initial cranberry plant planting is a cost of land 94
Tax Topics - Income Tax Act - Section 30 costs of clearing, levelling and draining lands, but not of constructing basins, for a cranberry farm are currently deductible 136
Tax Topics - Income Tax Regulations - Schedules - Schedule II - Class 6 costs of constructing irrigation pond included 33
Tax Topics - Income Tax Regulations - Schedules - Schedule II - Class 8 irrigation system included, drainage costs deductible under s. 30 79

8 January 2008 Internal T.I. 2007-0254881I7 F - Amortissement d'une aire de camping

In finding that a campground should be included in Class 17(c), the Directorate stated:

2000-0029597 … in light of the Mont-Sutton decision,...

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Words and Phrases
surface construction
Locations of other summaries Wordcount
Tax Topics - Income Tax Regulations - Regulation 1100 - Subsection 1100(17) campground, if a business, not subject to leasing property restriction rule 108
Tax Topics - Income Tax Regulations - Schedules - Schedule II - Class 1 septic tanks are structures 167
Tax Topics - Income Tax Regulations - Schedules - Schedule II - Class 6 swimming pool is a water storage tank 98

14 February 2005 External T.I. 2005-011130

Discussion of criteria to be satisfied in order for ski trails to qualify as surface construction for purposes of paragraph (c) of Class 17.

28 June 2001 External T.I. 2001-0068425 - CLEARING LAND-GOLF COURSE

The creation of greens, tees and fairways for a golf course would constitute "surface construction" and, therefore, would qualify for inclusion in...

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Class 22

Cases

Lindwest Holdings Ltd. v. The Queen, 88 DTC 6482, [1988] 2 CTC 287 (FCTD)

Equipment which both was "designed" for the purpose of excavating or moving earth and rock (Class 22) and which was acquired for logging...

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The Queen v. Nomad Sand & Gravel Ltd., 87 DTC 5343, [1987] 2 CTC 112 (FCTD)

A sand and gravel pit was not a "mine", and front end loaders used in the gravel pit operation accordingly were Class 22, rather than Class 10...

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Class 24

Administrative Policy

IT-336R "Pollution Control Property"

27 September 1991 T.I. (Tax Window, No. 10, p. 18, ¶1485)

The Minister of the Environment has the authority only to make the determination referred to in paragraph (b)(iv).

27 September 1991 Memorandum (Tax Window, No. 10, p. 18, ¶1487)

Equipment used to provide pollution reduction services to oil and gas lease holders will not qualify for inclusion in Class 24 unless the...

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Class 26

Administrative Policy

7 June 2017 CPTS Roundtable, 2017-0695131C6

Most modern refinery catalysts have a useful life of 1 to 3 years and are disposed of at the end of this period. Is CRA still of the view that the...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 13 - Subsection 13(21) - Proceeds of Disposition Q.1 - Daishowa extends beyond reforestation and reclamation obligations only on a case-by-case basis 213
Tax Topics - Income Tax Act - Section 66 - Subsection 66(15) - Canadian Resource Property - Paragraph (d) Q.2 - a Canadian resource royalty interest requires a right to “take production” 135
Tax Topics - Treaties - Income Tax Conventions - Article 13 Q.3 - Canada-U.K. Treaty does not exempt shares deriving their value from Canadian oil and gas licences – even where the Canadian business is carried on “in” them 193
Tax Topics - Income Tax Act - Section 115 - Subsection 115(1) - Paragraph 115(1)(a) - Subparagraph 115(1)(a)(ii) Q.4 - by analogy to mining, hydrocarbons may be similar properties 348
Tax Topics - Income Tax Regulations - Regulation 1101 - Subsection 1101(1) Q.5 - normal course dispositions of oil and gas properties generally are not of a separate business 131
Tax Topics - Income Tax Act - Section 4 - Subsection 4(1) Q.5 - application of Scales test to determining whether there is a separate business 224
Tax Topics - Income Tax Regulations - Schedules - Schedule II - Class 49 Q.8 - taxpayers generally have the documentary evidence on hand to allocate costs between pipelines and pipeline appendages 117

Class 28

Administrative Policy

November 1991 Memorandum (Tax Window, No. 12, p. 21, ¶1570)

An acquisition of equipment will not be considered a "major expansion" where it increases or recovery at a mine by more than 25% but there is no...

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Class 29

Cases

Will-Kare Paving & Contracting Ltd. v. Canada, 2000 DTC 6467, 2000 SCC 36, [2000] 1 S.C.R. 915 (SCC)

The taxpayer, which paved driveways, parking lots and small roadways, also operated an asphalt-producing plant. 75% of the output was utilized in...

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The Queen v. Donohue Normick Inc., 96 DTC 6061 (FCA)

Seventeen spare parts having a cost in excess of $1 million that the taxpayer purchased to be held until such time as identical parts in a...

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The Queen v. Coopers & Lybrand Ltd., Trustee of Hawboldt Hydraulics (Canada) Inc., 94 DTC 6541, [1994] 2 CTC 336 (FCA)

An operation of repairing and "re-manufacturing" hydraulic systems for customers (including the replacement of a part or parts of a customer's...

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Halliburton Services Ltd. v. The Queen, 85 DTC 5336, [1985] 2 CTC 52 (FCTD), aff'd 90 DTC 6320 (FCA).

Equipment which the taxpayer bolted or welded to its trucks to be used in its well-pumping operations was held to be contractor's movable...

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Nova Construction Co. Ltd. v. The Queen, 83 DTC 5105, [1983] CTC 58 (FCTD)

The Act contemplates that an activity may constitute both manufacturing or processing and construction. Accordingly, it was found that an asphalt...

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See Also

Adélard Soucy (1975) Inc. v. Agence du revenu du Québec, 2019 QCCQ 6956, rev'd 2021 QCCA 1050

The taxpayer custom-fabricated pieces of heavy specialized equipment at the northern mining site of one of its mining customers. In order that...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Regulations - Schedules - Schedule II - Class 8 - Paragraph 8(a) a building for warming equipment qualified as “manufacturing or processing machinery or equipment” 333

Coop de travailleurs en serres Belle-de-Jour v. Agence du revenu du Québec, 2019 QCCQ 6609

The taxpayer used approximately 20% of the area within greenhouses to grow cucumbers or other vegetables, or flowers, from seed for sale as...

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Words and Phrases
processing manufacturing
Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 4 - Subsection 4(1) - Paragraph 4(1)(a) use of greenhouses to further grow flowers before use in making floral arrangements was separate from the taxpayer’s greenhouse plant-growing farming business 221
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Farming use of greenhouses to further grow flowers before use in making floral arrangements did not constitute farming 163

Stark International Inc. v. The Queen, 2019 TCC 248

The taxpayer (“Stark”) used three newly-constructed transformer maintenance trailers (which were 50-foot trailers (“TMT 3, TMT 4 and TMT...

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Words and Phrases
sale
Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 127 - Subsection 127(9) - Qualified Property - Paragraph (c) a use test could be applied by looking beyond the property’s immediate intended use 235

Environnement Sanivac Inc. v. ARQ, 2016 QCCQ 9461

A company used somewhat modified trucks to collect dirty oils from customers. On the trucks’ return to the company premises, they would sit...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 127 - Subsection 127(9) - Qualified Property - Paragraph (c) - Subparagraph (c)(i) transporting trucks with decanting tanks used in M&P 281

Mont-Sutton Inc. v. The Queen, 96 DTC 1472, [1996] 3 CTC 2492 (TCC)

Artificial snow-making equipment did not qualify for inclusion in Class 29.

Démolition A.M. de l'est du Québec Inc. v. MNR, 93 DTC 889, [1993] 2 CTC 2447 (TCC)

The taxpayer, which derived its revenues from contracts for the demolition of buildings or other works, and from the sale of materials resulting...

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Lehmann Bookbindings Ltd. v. MNR, 92 DTC 1308, [1992] 1 CTC 2766 (TCC)

The taxpayer, which bound periodicals, textbooks and other materials owned by its customers, was engaged in manufacturing or processing.

Roy Legumex Inc. v. MNR, 90 DTC 1858, [1990] 2 CTC 2389 (TCC)

Containers which were used to dry legumes in order that they could be split were found to be structures that were manufacturing or processing...

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Red Deer Adviser Publications Ltd. v. MNR, 89 DTC 520, [1989] 2 CTC 2315 (TCC)

This taxpayer sought (at p. 523) to characterize two bi-weekly or weekly publications each "as a multiple advertisement flyer consisting of...

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Words and Phrases
same transaction

Administrative Policy

6 June 2019 CPTS Roundtable, 2019-0816111C6

In light of the accelerated CCA rules under Reg. 1100(2), what are examples of manufacturing or processing properties in the oil and gas context? ...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 231.2 - Subsection 231.2(1) taxpayers can choose between reasonable alternative formats (e.g. hard or soft) for providing their tax working papers/records 140
Tax Topics - Income Tax Regulations - Regulation 1100 - Subsection 1100(2) extension of M&P guidance to oil and gas sector 61
Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(b) - Capital Expenditure v. Expense - Oversight or Investment Management project expenses incurred after determining economic feasibility and before project approval are generally deductible 248
Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(b) - Capital Expenditure v. Expense - Start-Up and Close-Down Expenditures no acceptance that expenses incurred before decision to proceed are thereby on current account 186
Tax Topics - Income Tax Act - Section 66.2 - Subsection 66.2(5) - Accelerated Canadian Development Expense - Paragraph (a) - Subparagraph (a)(ii) accelerated CDE deduction can be available for drilling on land acquired from an affiliate 131

7 March 2019 Internal T.I. 2018-0781511I7 F - Fabrication ou transformation

9406917 F indicated that:

photocopying activities from a photocopier equipped with a computer and the activities of assembling photocopies with a...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 125.1 - Subsection 125.1(3) - Canadian Manufacturing and Processing Profits commercial printing or photocopying operations may not be M&P 160

15 January 2015 External T.I. 2014-0548101E5 F - Sens de "fabrication ou transformation"

In the course of a general discussion as to whether equipment used in coating steel rods with metal alloys were includible in Class 29, CRA...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 125.1 - Subsection 125.1(3) - Manufacturing or Processing steel rod plating could qualify 151

S4-F15-C1 - Manufacturing and Processing

Meaning of used directly or indirectly

1.52 The phrase used directly or indirectly...includes any ancillary equipment such as furniture and...

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11 August 2014 Internal T.I. 2014-0528231I7 F - Dépenses en immobilisation en RS&DE

The taxpayer acquired a machine which it used as part of SR&ED to create a prototype, which in turn was used in eventually commercializing a...

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19 November 2013 External T.I. 2013-0510351E5 - Steel Tanks and Oak Barrels of a Winery Business

The taxpayer in 2013-0503311E5 carried on a wine-making business that involved both farming activities (i.e., growing grapes) and non-farming...

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22 October 2013 External T.I. 2013-0503311E5 - Class. of steel tanks & oak barrel for CCA purpose

A CCPC wine producer whose activities include growing and purchasing, and then pressing, grapes, fermenting and aging wine, and bottling and...

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3 April 2012 External T.I. 2011-0426341E5 F - Catégories 29 et 43

In 2011, a taxpayer who recycles metal acquired a new container and excavator with a shear to cut the metal, which was placed in containers...

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4 June 2010 External T.I. 2010-0358811E5 F - Catégorie d'amortissement d'un moule

Would moulds be included in Class 43 even though they are specifically described in para. (d) of Class 12? CRA responded:

Although moulds are...

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22 January 2009 External T.I. 2008-0290971E5 F - Bénéfices de fabrication et de transformation

An operation of the taxpayer consists of taking products, received in bulk in boxes, and dividing them up by category according to specific...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 125.1 - Subsection 125.1(3) - Canadian Manufacturing and Processing Profits operation of breaking bulk packages into smaller lots for repackaging and sale was not “processing” 166

21 September 1990 T.I. (Tax Window, Prelim. No. 1, p. 23, ¶1005)

RC does not consider additions of machinery and equipment to a plant under a continual expansion to meet long-term capacity objectives as...

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Class 31

Cases

Vaillancourt v. The Queen, 86 DTC 6449, [1986] 2 CTC 188 (FCTD), rev'd 91 DTC 5352 (F.R.), 91 DTC 5408 (E.) (FCA)

For a property to qualify as a MURB to a taxpayer, the taxpayer must have more than one unit in the residential building. It is not sufficient for...

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Johns-Manville Canada v. The Queen, 85 DTC 5373, [1985] 2 CTC 111, [1985] 2 S.C.R. 46

Estey, J. stated, obiter, that if it were not for the addition of Class 26 to Schedule II, expenditures for catalysts would be currently deductible.

Administrative Policy

86 C.R. - Q.25

Notwithstanding Vaillancourt, RC will continue to follow IT-367R2, para 4.

IT-304R "Capital Cost Allowance - Condominiums"

Class 32

Administrative Policy

IT-304R "Capital Cost Allowance - Condominiums"

Class 34

Administrative Policy

10 August 1994 External T.I. 9405135 - WIND TURBINES

A wind turbine installed by Company A on its own property and used to displace electricity which would otherwise be purchased from a utility could...

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2 February 1994 Internal T.I. 9400307 - HYDRO ELECTRIC EQUIPMENT FOR A MINE

Property described in Regulation 1102(9) must be included in Class 41 and cannot be included in Class 34.

Class 39

Cases

Will Kare Paving & Contracting Ltd. v. The Queen, 98 DTC 6203 (FCA)

The taxpayer purchased an asphalt plant with the expectation that it would sell up to 40% of the production of the plant to third parties and use...

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Words and Phrases
primarily

Class 41

Administrative Policy

November 1991 Memorandum (Tax Window, No. 12, p. 21, ¶1570)

An acquisition of equipment will not be considered a "major expansion" where it increases recoveries at a mine by more than 25% but there is no mill.

Class 43

See Also

Ateliers Ferroviaires de Mont-Joli Inc. v. The Queen, 2011 DTC 1358 [at 2006], 2011 TCC 352

The taxpayer's parent company ("Séma") was in the business of providing consulting and maintenance services to the Canadian National Railway...

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Scieri St-Elzéar Inc. v. The Queen, 2003 DTC 14 (TCC)

A fire protection system and a steam heating system used in the taxpayer's lumber plant were includable in Class 43. The fire protection system...

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Administrative Policy

4 June 2010 External T.I. 2009-0324801E5 F - catégorie 43

General discussion as to potential qualification of moulds, overhead crane and crane for inclusion in Class 43 or 29, whereas a forklift truck is...

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16 September 2008 External T.I. 2008-0268021E5 F - Catégorie 43 - poinçon hydraulique

A company specializing in the manufacture of PVC profiles and the design of door and window systems, sold its profiles and window and door...

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23 June 2005 Internal T.I. 2005-0118191I7 F - Améliorations faites à un séchoir à bois

The taxpayer, which operated a sawmill, made alterations after February 25, 1992 to a lumber kiln that it had acquired before that date, in order...

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Class 43.1

Administrative Policy

17 January 2020 External T.I. 2017-0685341E5 - Tax Comparison of the FIT & Net Metering Programs

Under the Feed-in Tariff and microFIT programs (the “FIT/micro-FIT Programs”) administered by the Ontario Power Authority (the “OPA”), a...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 9 - Computation of Profit a credit generated by a business under the Ontario Net Metering Program is only income when applied, and is offset by a deduction for the electricity consumed 261
Tax Topics - Income Tax Act - Section 3 - Paragraph 3(a) - Business Source/Reasonable Expectation of Profit credits received under the Ontario Net Metering Program respecting electricity generated for personal consumption are not income 210
Tax Topics - Income Tax Regulations - Regulation 1100 - Subsection 1100(25) application of exception to the specified energy property rules to equipment used in the Ontario Feed-in Tariff program 364

16 May 2017 External T.I. 2016-0670661E5 - Capital Cost of De-icing Equipment

New aluminum shingles with an electric cable (the “Equipment”) will be attached over existing asphalt shingles on the portion of a roof...

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Words and Phrases
related fixture

6 May 2014 Internal T.I. 2014-0521261I7 - Biomass Electrical Facility Owned by First Nation

General discussion respecting a general biomass-fuelled electricity generating facility, which would be described in Class 43.1 and therefore...

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6 July 2012 External T.I. 2012-0444401E5 - Definition of “wood waste” in Class 43.2

"[I]t has been our longstanding view that wood pellets manufactured from inputs meeting the definition of 'wood waste' in subsection 1104(13) of...

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3 April 2013 External T.I. 2012-0469941E5 - CCA class and rate

Waste water treatment equipment is not eligible under subparagraphs (a)(i) to (a)(v) or Class 43.1, and consequently is not eligible for inclusion...

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11 May 2009 External T.I. 2008-0276761E5 F - Class 43.1 and 43.2

A wood waste fuelled heat production system and ground source heat pump likely could qualify for inclusion in Class 43.2. CRA stated:

in general,...

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15 November 2006 External T.I. 2006-0190041E5 F - Biogas / Codigestion Process / Produced for Sale

Opco, which utilizes biomass through anaerobic digestion processes in order to produce biogas (containing significant methane) will install a...

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Articles

Tim Hay, "Federal Income Tax Incentives for Independent Power Generation: Accelerated Capital Cost Allowance of Class 43.1 Assets and 100% Write-Off of Canadian Renewable and Conservation Expenses", Business Vehicles, Vol, VII, No. 3, 2001, p. 342.

Paragraph (d)

Subparagraph (d)(v)

Administrative Policy

21 December 2005 External T.I. 2005-0150711E5 F - Wind turbines - Class 43.1

CRA described a structure under which the operator can satisfy the requirement of being the owner of the depreciable property (the wind...

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Subparagraph (d)(vii)

Subparagraph (d)(viii)

Administrative Policy

17 July 2018 External T.I. 2018-0747311E5 - Geothermal Energy Project

CRA indicated that the costs of both drilling and (except as noted below) completing exploratory wells for a geothermal project generally qualify...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Regulations - Regulation 1219 - Subsection 1219(1) - Paragraph 1219(1)(h) completing an exploratory geothermal well ultimately used in production generates Class 43.1 costs, not CRCE 264
Tax Topics - Income Tax Regulations - Schedules - Schedule II - Class 14 if renegotiation, further permit fees may generate Class 14 property 125

11 January 2011 External T.I. 2010-0385231E5 F - Class 43.2

The Corporation will plant fast-growing trees, such as poplars, on land acquired by it and fertilized by it with sludge from municipal water...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Regulations - Schedules - Schedule II - Class 43.1 - Paragraph (d) - Subparagraph (d)(xiii) digester producing gas from municipal sludge for thermal production could qualify 196

Subparagraph (d)(xiii)

Administrative Policy

11 January 2011 External T.I. 2010-0385231E5 F - Class 43.2

The "Corporation" acquires sludge from municipal water treatment plant which, through processing by a digester, produces gas and digestate. The...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Regulations - Schedules - Schedule II - Class 43.1 - Paragraph (d) - Subparagraph (d)(viii) biomass boiler using wood chips from poplars grown by taxpayer did not qualify 215

Class 43.2

Administrative Policy

S3-F8-C1 - Principal-business Corporations in the Resource Industries

Overview: Class 43.1 and 43.2

1.9 Class 43.1 and 43.2 of Schedule II to the Regulations provide an accelerated CCA for investments in certain...

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10 February 2015 External T.I. 2014-0549331E5 F - Borne de recharge – catégorie d'amortissement

An employer acquired charging stations, which were used only to recharge the employer's electric vehicles that were used by its employees for...

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21 October 2014 External T.I. 2014-0543041E5 - Class 43.2 - Photovoltaic System

General discussion of the considerations applicable to claiming CCA on solar photovoltaic systems.

21 August 2013 External T.I. 2013-0486441E5 - CCA and ITCs on anaerobic digester

Regarding anaerobic digesters (machines for extracting methane from manure, a byproduct of which is fertilizer), CRA stated:

Property of a...

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29 February 2012 External T.I. 2012-0435151E5 - Installation of Solar Panels

Discussion of CCA rules applicable to solar photovoltaic equipment.

Class 45

Administrative Policy

5 October 2007 APFF Roundtable Q. 26, 2007-0243381C6 F - Classification des équipements de bureautique

(a) The questioner pointed out that equipment manufacturers often sell products at a minimum price and charge a premium for supplies (e.g....

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Class 46

Administrative Policy

29 October 2013 External T.I. 2013-0507121E5 - Website costs

Determining whether website costs are in the nature of income or capital should entail an analysis of each component of the site. The...

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Class 49

Administrative Policy

7 June 2017 CPTS Roundtable, 2017-0695131C6

CRA noted that, as per IT-482, an attachment to a pipeline is not an integral and component part of the pipeline, and is considered to be separate...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 13 - Subsection 13(21) - Proceeds of Disposition Q.1 - Daishowa extends beyond reforestation and reclamation obligations only on a case-by-case basis 213
Tax Topics - Income Tax Act - Section 66 - Subsection 66(15) - Canadian Resource Property - Paragraph (d) Q.2 - a Canadian resource royalty interest requires a right to “take production” 135
Tax Topics - Treaties - Income Tax Conventions - Article 13 Q.3 - Canada-U.K. Treaty does not exempt shares deriving their value from Canadian oil and gas licences – even where the Canadian business is carried on “in” them 193
Tax Topics - Income Tax Act - Section 115 - Subsection 115(1) - Paragraph 115(1)(a) - Subparagraph 115(1)(a)(ii) Q.4 - by analogy to mining, hydrocarbons may be similar properties 348
Tax Topics - Income Tax Regulations - Regulation 1101 - Subsection 1101(1) Q.5 - normal course dispositions of oil and gas properties generally are not of a separate business 131
Tax Topics - Income Tax Act - Section 4 - Subsection 4(1) Q.5 - application of Scales test to determining whether there is a separate business 224
Tax Topics - Income Tax Regulations - Schedules - Schedule II - Class 26 Q.7 - refinery catalysts are Class 26 property 87

Class 50

Administrative Policy

19 September 2013 External T.I. 2013-0498331E5 F - Catégories 29 et 50

After noting that some computer equipment would qualify for inclusion in Class 29 if acquired before 2016, CRA stated:

[C]omputer equipment is...

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