5-901691
Dear Sirs:
This is in reply to your letter of July 20, 1990 asking if the proceeds on a life insurance policy would be considered substituted property such that the attribution rules would apply.
Based on the facts given in your letter and on a subsequent telephone conversation (Baldwin 19(1) Is our opinion that the proceeds on the life insurance policy would be considered to be substituted property. It is also our opinion, assuming that the grandchildren are minors, that subsection 74.1(2) of the act would apply to attribute any non-business income or loss on the cash proceeds or any property substituted for the cash proceeds.
We trust our comments will be of assistance to you.
Yours truly,
for DirectorFinancial Industries DivisionRulings Directorate