| January 29, 1990 | |
| L. Tremblay | Head Office |
| Acting Director | Specialty Rulings |
| Appeals & Referrals Division | Dave Turner |
| Appeals branch | (613) 957-2094 |
| Attention: E. Short | File No. 8-0317 |
Subject: 24(1)
We are writing in reply to your memorandum of August 21, 1989, concerning 24(1) In your memorandum you requested our comments related to Taxation's position and general policy on grain elevator operations, specifically the classification of assets for the purpose of calculating capital cost allowance ("CCA").
24(1)
Taxpayer's representation
24(1)
Audit Division's representation
Audit division's position is based upon an interpretation issued by Rulings division on February 2, 1987 a copy of which was attached to your letter. The interpretation related to the Income Tax treatment 24(1)
Our comments
Our general policy on grain terminal operations is that they are not used primarily for processing and as such only assets used directly in cleaning, mixing or some other processing function will qualify as class 29 assets. As such, the CCA classes of assets in the a terminal should be determined on an individual basis giving consideration to both the specific use that is made of the asset and the degree of connection to or integration with other assets used for an identifiable function in which the asset is used. As outlined in our interpretation of February 2, 1987. 24(1)
We trust that out comments will be of assistance.
DirectorBusiness and General DivisionSpecialty Rulings directorateLegislative and Intergovernmental Affairs Branch