Re: Home Relocation Loan Deduction
This letter is in reply to yours dated January 7, 1991 on the above noted issue.
Your question concerns whether the "Home Relocation Loan Deduction" available under paragraph 110(1)(j) of the Income Tax Act (the "Act") applies only to employer initiated relocations and secondly, whether this deduction is available to each spouse in situations involving the relocation of a husband and wife who are both employed with the 24(1) and who both would qualify for such a loan.
If the loan which gives rise to a taxable benefit under section 80.4 of the Act is determined to be a "Home Relocation Loan" as defined in subsection 248(1) of the Act, the employee is entitled to a deduction from taxable income within the limitations imposed by paragraph 110(1)(j) of the Act. The wording of the provision does not require the relocation to be employer initiated.
With respect to paragraph (d) of the definition of "Home Relocation Loan" in subsection 248(1) of the Act, each employee/spouse may designate his/her loan notwithstanding that only one dwelling is being acquired.
The provisions of subsection 80.4(1) And paragraph 110(1)(j) of the Act applies to each employee/spouse with respect to his/her particular loan.
We trust our comments will be of assistance to you.
Yours truly,
for DirectorBusiness and General DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch