Principal Issues: What is meant by "taken together" in subparagraph 118.4(1)(c.1)(ii) which states that, in the context of a basic activity of daily living, mental functions necessary for everyday life include "problem-solving, goal-setting and judgement (taken together)."
Position: It is a question of fact.
Reasons: All three activities taken together are considered mental functions necessary for everyday life (a basic activity of daily living) for purposes of paragraph 118.4(1)(c.1). Any single one of those activities would likely not. Whether a combination of any two of the three activities would be considered a basic activity of daily living would likely be a question of fact.
March 22, 2018
Canada Revenue Agency HEADQUARTERS Assessment, Benefit and Services Branch Income Tax Rulings Directorate 750 Heron Road, 7th Floor Ottawa ON K1A 0L5 Eric Wirag, CPA, CMA (613) 670-9053
Attention: Marie Corey 2016-068120
Subparagraph 118.4(1)(c.1)(ii) of the Income Tax Act
We are replying to your email of December 22, 2016, and further to our conversation of March 28, 2017, in which you asked for our comments on the phrase “taken together” in subparagraph 118.4(1)(c.1)(ii) of the Income Tax Act (“Act”). You are wondering if all three of problem-solving, goal-setting and judgement as described in subparagraph 118.4(1)(c.1)(ii) have to exist to be considered mental functions necessary for everyday life.
Our Comments
For the purpose of the disability tax credit, a “basic activity of daily living” is defined in paragraph 118.4(1)(c) of the Act. It includes, in subparagraph 118.4(1)(c)(i) of the Act, “mental functions necessary for everyday life.” Paragraph 118.4(1)(c.1) describes mental functions necessary for everyday life to include:
(i) Memory,
(ii) Problem solving, goal-setting and judgement (taken together), and
(iii) Adaptive functioning.
In our view, the phrase “taken together” when considering problem-solving, goal-setting and judgement as a basic activity of daily living means that the three functions would need to be considered in the aggregate. It is the combination of all three mental functions that is examined in determining a basic activity of daily living as described in subparagraph 118.4(1)(c.1)(ii). Certainly all three activities together are considered a basic activity of daily living for purposes of paragraph 118.4(1)(c.1), and any single one of those activities would likely not be.
If you have any questions regarding the above, please do not hesitate to contact us.
Lita Krantz CPA, CA
Tax Credits and Ministerial Issues
Business and Employment Division
Income Tax Rulings Directorate