| 19(1) | J.A. Szeszycki |
| (613) 957-2103 | |
| File No. 7-4684 |
April 23, 1990
Re: Leasing Costs Deduction
We are responding to your faxed enquiry dated January 23, 1990, received by our Head Office Source Deductions Division, wherein you requested the Department's opinion as to the meaning of the term "amounts deducted" as that term is used in paragraph 67.3(c) of the Income Tax Act (the "Act"). The enquiry was forwarded to this Division for reply. The question you have raised, as we understand it, is whether the "amount deducted in computing the taxpayer's income for the preceding year is in respect of the lease of the vehicle" is the amount determined before or after making any reductions for personal use of the vehicle. How that term is interpreted may affect whether the first or second formula set out in Section 67.3 of the Act produces the lesser amount for the purposes of the limitation described therein. We regret the delay in responding to your enquiry.
We have reviewed the matter and have concluded that the "amounts deducted" refer to that portion of the expense that was determined as being laid out to earn income, under the provisions of the Income Tax Act, and was actually used in the computation of income for the year.
We trust the foregoing responds to your enquiry.
Yours truly,
for DirectorBusiness and General DivisionSpecialty Rulings DirectorateLegislative and Intergovernmental Affairs Branch
c.c. John Wilson Source Deductions Division