16 October 1989 Ruling 58561 F - Capital Dividend not Added to a Corporation's Capital Dividend Account

By services, 18 January, 2022
Official title
Capital Dividend not Added to a Corporation's Capital Dividend Account
Language
French
CRA tags
89(1) capital dividend account, 89(1) private corporation, 104(20)
Document number
Citation name
58561
Severed letter type
Ruling
d7 import status
Drupal 7 entity type
Node
Drupal 7 entity ID
632607
Extra import data
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"field_external_guid": [],
"field_proprietary_citation": [],
"field_release_date_new": "1989-10-16 08:00:00",
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Main text
19(1) File No. 5-8561
  Maureen Shea-DesRosierss
  (613) 957-8953

October 16, 1989

Dear Sirs:

Re:  Subsection 104(20) of the Income Tax Act (the "Act")

This is in reply to your letter of august 21, 1989 wherein you request a technical interpretation on the interaction of subsection 104(20) and paragraph 89(1)(b) of the Act where a private corporation is a beneficiary of a trust.

It is our view that subparagraph 89(1)(b)(ii) of the Act does not include capital dividends received through trusts.  We therefore concur with your opinion that such a capital dividend could not be added to a corporation's capital dividend account as that term is defined in paragraph 89(1)(b) of the Act.

It is not the Department's practice to allow, on an administrative basis, a capital dividend received under subsection 104(20) of the Act to be added to the capital dividend account of a corporation.

We trust the above comments will be of assistance to you.

Yours truly,

for DirectorFinancial Industries DivisionRulings Directorate