24(1)
3-902934
K.B. Harding
(613) 957-2130
19(1)Dear Sirs:
24(1)
This is in reply to your letter of October 19, 1990 in which you requested an advance income tax ruling on behalf of the above-mentioned taxpayer, and the subsequent letter of November 30, 1990 in which you withdrew that request in view of the fact that no proposed transaction had yet been identified.
This will confirm at your request for an advance income tax ruling on behalf of 24(1) has been withdrawn and your advance payment of $400 will be returned under separate cover.
We are prepared, however, to offer the following opinion of a general nature concerning the treatment of paragraph 1 of Article XXI of the Canada-U.S. Income Tax Convention (the "Convention").
Any income or taxable capital gains derived by a U.S. Charity described in paragraph 1 of Article XXI of the Convention, which is a resident of the United States in accordance with Article IV of the Convention, will be exempt from tax in Canada by virtue of that paragraph to the extent that such gains are exempt from tax in the United States and provided that paragraph 3 of Article XXI of the Convention does not have
application to such gains. However, such organization would be required to comply with paragraph 76(c) of the Information Circular 77-16R3 in order to ensure whether the particular organization qualifies for exempt status under paragraph 1 of Article XXI of the Convention.
We trust this is adequate for your purposes.
Yours truly,
for Director Reorganizations and Non-Resident Division Rulings Directorate Legislative and Intergovernmental Affairs Branch