| 24(1) | 902343 |
| M. Eisner | |
| (613) 957-2138 |
19(1)
December 18, 1990
Dear Sirs:
This is in reply to your letter of August 22, 1990 concerning whether certain amounts for maintenance and support received by a taxpayer subsequent to the death of her former husband must be included in income. We also understand, pursuant to a telephone conversation on October 26 (Eisner 19(1)) that the payments in question are being received from a beneficiary rather than the former husband's estate as indicated in your letter.
24(1)
As the review of completed transactions of specific taxpayers falls within the responsibility of the local District Taxation Office, you should normally contact the Toronto District Taxation Office for the purposes of determining the tax consequences of payments made in circumstances as set out above. However, we are prepared to provide you with the following general comments which we hope will be of assistance to you.
In order for maintenance and support payments to be required to be included in the income of the recipient they must satisfy the conditions set out in paragraphs 56(1)(b) and (c) of the Income Tax Act. One of those conditions requires that at the time the payment was received the spouse and former spouse were living separate and apart. Accordingly, where the former spouse responsible for making maintenance and support payments dies, it is our view that subsequent payments made by the estate of the former spouse or its beneficiary would cease to be made at a time when the spouse and former spouse are living separate and apart. Consequently, the amounts received would not be subject to tax in the hands of the recipient. In addition, the payer (the estate or beneficiary) would not be entitled to a deduction under paragraphs 60(b) or (c) of the Act.
We trust that you will find the foregoing satisfactory.
Yours truly,
for DirectorBusiness and General DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch