| September 20, 1989 | |
| Mrs. P. McNally | Current Amendments and |
| Director | Regulations Division |
| Enquiries & Taxpayer | D.C. Burnett 957-2078 |
| Assistance Division | |
| F-3160 |
Rental Income Tax Guide
This is in response to the memorandum of August 4, 1989 prepared by J. Leigh concerning the above Guide.
We have the following comments with respect to the Guide:
1) On page 2 under the heading "New for 1989", you might mention in your explanation of a tax shelter the 4 year period for losses exceeding costs.
2) On page 3, the reference to "rental income" in the second-last line of the last paragraph under the heading "Business income or property income?" should be a reference to "property income".
15(1)(g)
4) On page 9, the expression "included this interest in rental income" on the fourth line under the heading "Interest" is confusing. We are uncertain what the status of the interest paid would be if there was no interest earned on the deposits, e.g. the deposits were used as working capital.
5) On page 16, the references to Class 6 under the heading "Class 1 (4%)" are inappropriate. You should refer to Class 3 only.
6) The first note on page 17 is incorrect. MURBs owned on June 18, 1987 will continue to qualify as Class 31 or 31 after 1993, however, commencing with the 1994 taxation year MURBs will be subject to the same CCA restrictions as other classes of rental property.
B.J. BrysonActing Director Current Amendments and Regulations Division
DCB/jab
c.c. Mr. A.G. Cockell