Dear Sirs:
Re: Request for Technical Interpretation
We are replying to your letter of June 26, 1991 wherein you requested our views on whether a company is entitled to claim capital cost allowance on buildings acquired in the hypothetical situation described in your letter. 24(1)
We refer also to our telephone conversation (Larochelle 19(1) July 18, 1991.
It would appear that you have a specific situation in mind relating to a proposed transaction. Confirmation of the tax consequences of specific proposed transactions will only be provided in response to a request for an advance income tax ruling. As you are aware the procedure for requesting an advance ruling are fully described in the recently revised Information Circular IC 70-6R2. We can, however offer the following general comments with respect to your enquiry.
Our Comments
It appears from the facts of your hypothetical situation that the properties in question would not qualify for capital cost allowance. Paragraphs 1102(1)(a) and (b) of the Income Tax Regulations exclude from the classes of property upon which capital cost allowance may be claimed property the cost of which is deductible in computing income and property that is described in inventory.
We trust this information will be of assistance to you.
Yours truly,
for DirectorBusiness and General DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch