Principal Issues: Recaptured CCA - whether active income or property income.
Position: None taken
Reasons: Our position regarding the income tax treatment of recaptured CCA is discussed in IT-73R6. If further assistance is needed and the situation involves specific taxpayers and completed transactions, the information can be submitted to the local TSO for their views. If the situation involves proposed transactions, a request for an income tax ruling can be submitted in the manners set out in IC-70-6R5.
XXXXXXXXXX 2008-029420
Tim Fitzgerald, CGA
December 5, 2008
Dear XXXXXXXXXX ,
Re: Recaptured Capital Cost Allowance (CCA)
This is in reply to your letter of September 18, 2008 concerning the tax treatment of recaptured CCA in a situation where there is a change in the income-use of a depreciable property.
Our views concerning the income tax treatment of recaptured CCA are discussed in the CRA's interpretation bulletin, IT-73R6 - The Small Business Deduction. Should you need further assistance and the situation involves specific taxpayers and completed transactions, you can submit the information to the local tax services office for their views. A list of tax service offices is available on the CRA website at
http://www.cra-arc.gc.ca/cntct/tso-bsf-eng.html. If the situation involves proposed transactions, you may submit a request for an advanced income tax ruling in the manner set out in Information Circular 70-6R5.
We trust our comments are of assistance.
Yours truly,
Sandy Parnanzone
for Director
Business and Partnerships Division
Income Tax Rulings Directorate
Legislative Policy & Regulatory Affairs Branch