E. Mikhail (613) 995-1787
August 17, 1983
Dear Sirs:
This is in reply to your letters dated March 25, 1983 and July 5, 1983 in which you inquired about the proper capital cost allowance class applicable to videotapes of movies, films, etc. rented out.
It is our view that videotapes included in class 10(s) are those where the taxpayer acquires the required elements of ownership outlined in paragraph 2 of IT-441 which include ownership of the master negative and copyright of the tape. In the situation described by you, the taxpayer acquires merely videotape cassettes with a reprint of a movie or film. Such videotape cassettes do not qualify for inclusion in class 10(s) or class 12. They do qualify for inclusion in class 8 by way of the catch-all provision in paragraph (i).
It is our understanding that the Department of Finance is aware of the inadequate write-off afforded under class 8 and will look into the matter in due time.
We apologize for the delay. Yours truly,
for Director
Specialty Corporations Rulings Division Corporate Rulings Directorate Legislation Branch