| 922407 | |
| 24(1) | A. Humenuk |
| (613) 957-2134 |
Attention: 19(1)
September 28, 1992
Dear Sirs:
Re: Alimony Payable Pursuant to a Separation Agreement
We are replying to your letter of August 6, 1992 wherein you ask whether a married couple who have divorced can opt out of the provisions which require the recipient spouse (the spouse or former spouse to whom or on behalf of whom the payment is made) to include certain amounts in income and permit the payor spouse (or former spouse) to deduct them.
The authority for requiring alimony payments to be included in income is found in paragraph 56(1)(b) as modified and clarified by section 56.1 and subsection 56(12) of the Income Tax Act (the "Act"). It is not the action of the payor claiming the deduction which causes the amount to be included in the recipient spouse's income but rather it is the terms and purpose of the payment which determines the correct treatment for tax purposes.
Where the terms and purpose of the payment are such that either paragraph 56(1)(b), (c) or (c.1) of the Act require the amount to be included in the individual's income, the recipient spouse must include that amount in income regardless of whether the payor has agreed not to take a deduction for such amounts or in fact, has not done so.
We trust our comments will be of assistance to you.
Yours truly,
J.A. Szeszyckifor DirectorBusiness and General DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch