Dear 19(1)
Re: 19(1)
We are writing in reply to your letter of January 23, 1991, wherein you requested an advance income tax ruling on behalf of the above noted taxpayer with respect to the income tax implications of maintenance payments to be paid to the taxpayer's spouse pursuant to a written separation agreement.
As discussed during our telephone conversation (Day 19(1) of March 14, 1991 and confirmed in your telefax message of March 25, 1991, we are unable to provide you with a binding advance income tax ruling because we do not have a copy of a complete text of the draft Minutes of Settlement. We are, however, prepared to offer our comments regarding the income tax implications of paragraph 60(b) of the Income Tax Act (the "Act") based on the information submitted with your request.
Our understanding of the situation, as set out in your letter, the telefax transmission of March 5, 1991 and as clarified in our telephone conversation (Day 19(1) of March 8, 1991, is as follows:
24(1)
24(1)
Our Comments
For purposes of paragraph 60(b) of the Act and paragraph 9 of Interpretation Bulletin IT-118R3, it is our view that the payments determined in accordance with the formula described above would be considered to be an "amount" for purposes of paragraph 60(b) of the Ace that would be deductible in computing the taxpayer's income under paragraph 60(b) of the Act, assuming that all other terms of that paragraph are fulfilled. The amount would also be taxable to the spouse in accordance with paragraph 56(1)(b) of the Act.
We would caution that the above comments reflect an expression of opinion only, and as such, are not binding upon the Department
Your $400 deposit will be returned under separate cover.
Yours truly,
for DirectorBusiness and General DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch