| 19(1) | 5-9065 |
| C. Robb | |
| (613) 957-2744 | |
| December 18, 1989 |
Dear 19(1)
We are writing in response to your letter of November 8, 1989, in which you requested a technical interpretation regarding paragraph 20(1)(c) of the Income Tax Act (the "Act").
The facts described in your letter appear to relate to a specific proposed transaction. Accordingly, your query should take the form of a request for an advance income tax ruling. We do, however, offer the following comments.
In order to determine deductibility the Department looks at both the original purpose of the loan and the use to which the borrowed funds are currently put. The court case you have referred to is currently under appeal to the Federal Court of Appeal.
Yours truly,
for DirectorFinancial Industries DivisionRulings Directorate