| 24(1) | 5-902301 |
| Bill Guglich | |
| (613) 957-2102 | |
| 19(1) | EACC9657 |
September 13, 1990
Dear Sirs:
This is in reply to your letter of August 21, 1990 concerning the application of subsection 119(4) of the Income Tax Act (the Act) in a situation where there is no requirement to file returns for two of the "six years immediately preceding the year of averaging".
You described a hypothetical situation where a taxpayer had no federal tax payable and there was also no other requirement to file returns for the 1988 and 1989 taxation years. We are also asked to assume that for the taxation years 1987, 1990, 1991, 1992 and 1993 the taxpayer otherwise meets the elective requirements of section 119 of the Act.
OUR COMMENTS
The Department's views regarding the requirements that must be met by a taxpayer, in order that he may be eligible to elect under subsection 119(1) of the Act, are set out on page 36 of the 1989 Farming Income Tax Guide.
In your hypothetical situation, the taxpayer is under no obligation to file returns for the 1988 and 1989 taxation years and otherwise meets the requirements for the election under subsection 119(1) of the Act. In such a case, an election could be made with 1993 as the year of averaging and the 1987, 1990, 1991 and 1992 taxation years as the four immediately preceding years.
For your information we are enclosing the 1989 Farming Income Tax Guide. We hope his of assistance.
Yours truly,
E.M. Wheeler for DirectorBusiness and General DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch