| 913418 | |
| R.B. Day | |
| (613) 957-2136 |
January 7, 1992
K. BeriniAppeals BranchBusiness and GeneralAppeals & Referrals Division Division
19(1) - Maintenance Payments
We are writing in reply to your memorandum of December 9, 1991, wherein you requested our opinion as to whether or not payments made by the above-noted taxpayer to his adult daughter could be considered to be maintenance payments for purposes of paragraphs 60(b), 60(c) and subsection 60.1(1).
Our understanding of the facts in this case are as follows:
24(1) 24(1)
It is your opinion that these payments do not qualify as a deduction under either of paragraphs 60(b), (c) or subsection 60.1(1) because the daughter has reached the age of majority and the payments were not made at the direction of the spouse as required under the Act. However, you have requested our views on the following matters that concern you, prior to making your final recommendation:
1. Do third party payments, deductible under subsection 60.1(1), include payments made directly to a child?
2. Do payments made to a child subsequent to reaching the age of majority qualify as maintenance payments considering the requirements of 24(1) law?
Our Comments
We have reviewed your submission along with the detailed analysis submitted by the Designated Appeals Office in Edmonton. As a result of this review we are in complete agreement with the view that the payments to the adult daughter of the marriage do not qualify as maintenance payments as envisioned by paragraphs 60(b) and (c) and subsection 60.1(1).
1. Despite the absence of specific comments in IT-118R3 it remains our position that a payment made for the benefit of a child in the custody of the spouse would include a payment made directly to the child and would qualify for a deduction as long as the payment was made at the discretion of the spouse and otherwise met the criteria set out in paragraphs 60(b),(c) or (c.1).
2. In this case, in order for subsection 60.1(1) to apply to the payments made to the adult daughter, the payments must first meet all the criteria in paragraphs 60(b) or (c). In addition, since it is not being made directly to the spouse it must be for the benefit of the spouse or children in the custody of the spouse. Once a child of the marriage reaches the age of majority that child is no longer considered to be in the custody of the parent. Therefore, a payment made directly to an adult child cannot be said to be for the benefit of either the spouse or a child in the custody of the spouse. The requirements of 24(1) law have no bearing on the foregoing position.
In conclusion, we believe that the well reasoned arguments of the DAO provide sufficient support for proceeding with the appeal.
Your file is returned herewith.
B.W. DathDirectorBusiness and General DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch