| Minister(2)/D.M. Office | Y.S. 9226008 |
| Central Records | |
| Author / Section Chief | |
| District Office? | |
| Research File | |
| Taxpayer's File | |
| Return to Specialty Rulings, Room 303, Met. | |
| October 11, 1989 |
24(1)
I am replying to you, letter of March 1, 1989, addressed to Mr. Terry Clifford, M.P. for London-Middlesex, which was subsequently referred to the Honourable Don Mazankowski, Minister of Agriculture. As Mr. Mazankowski indicated in his letter to you of August 8, 1989, he has asked me to reply to your concerns regarding the eligibility of 24(1) for the small business deduction.
The small business deduction is calculated on the income of a corporation for the year from an active business carried on in Canada. However, the definition of income from an active business does not include income derived from the rental of property. This deduction and the related issue of "active business" is described in Interpretation Bulletin IT-73R4, a copy of which is enclosed.
From the information available, 24(1) appears to be earning property income and therefore it would not be eligible for the small business deduction.
I trust this information will be of assistance to you.
Yours sincerely,
Otto Jelinek
c.c: The Honourable Don Mazankowski, Deputy Prime Minister, President of the Queen's Privy Council for Canada and Minister of Agriculture
G. Thornley/sb(957-2101)/ys9226008Sept. 29, 1989