| 19(1) | 902327 |
| R.B. Day | |
| (613) 957-2136 |
October 18, 1990
19(1)
Re: Subsection 155(1) of the Income Tax Act (the "Act")
This is in reply to your letter of August 28, 1990, wherein you requested our views as to whether or not instalment interest would be charged in the following situation.
A farmer who, at the beginning of a year, believes that his chief source would be from farming, delayed making any instalment payments until December 31 of that year, pursuant to subsection 155(1) of the Act. The farmer subsequently discovers that his investment income will exceed his farming income for the year.
You have asked whether the farmer would, in these circumstances, be charged interest on deficient instalments pursuant to subsection 156(1) of the Act.
Our Comments
Where, in the above instance, the year in question is the individual's first year of farming, interest on deficient instalments would not be charged under subsection 156(1). Also, if in the year preceding the year in question, the farmer was a taxpayer whose chief source of income was from farming, instalment payments pursuant to subsection 155(1) of the Act for the current year would be accepted.
If, in the preceding year, the farmer was a taxpayer whose chief source of income was from a source other than farming, the taxpayer would be treated as any other individual required to make quarterly instalments pursuant to subsection 156(1) of the Act.
Should the situation described above relate to a particular case, you may wish to approach the appropriate District Office for further information and clarification of departmental practices in this regard.
We trust our comments are of assistance to you.
Yours truly,
for DirectorBusiness and General DivisionSpecialty Rulings DirectorateLegislative and IntergovernmentalAffairs Branch