| 24(1) | 5-902882 |
| M.P. Baldwin | |
| (613) 957-3499 |
19(1)
November 20, 1990
Dear Sirs:
Re: Designation under subsection 104(13.1) of the Income Tax Act (the "Act")
This is in reply to your letter of October 4, 1990, in which you requested an interpretation of the meaning of "D" in the formula in subsection 104(13.1) of the Act.
It is our view that "D" of the subsection 104(13.1) formula refers to the total amount deducted for the year by the trust under subsection 104(6) of the Act.
As indicated in the Department of Finance's Explanatory Notes issued in June 1988, it was not intended that a subsection 104(13.1) designation be made for only one of two or more income beneficiaries. Rather, its purpose was to provide a mechanism for a trust to designate to all its beneficiaries their respective shares of that portion of the trust's actual income distributions that was not deducted by the trust in computing its income for the year. It is our view that the application of the formula to the situation described above will produce a result that is in accordance with this stated intent.
We trust the above comments will be of assistance to you.
Yours truly,
for DirectorFinancial Industries DivisionRulings Directorate