D.S. Delorey (613) 957-3495
19(1)
March 23, 1990
Dear Madam:
This is in reply to your letter of March 5, 1990 requesting our views on whether or not subsection 105(1) of the Income Tax Act (the "Act") applies where a debt is forgiven under a will.
As stated in paragraph 3 of Interpretation Bulletin IT-382 , the Department's practice outlined therein means that "there are no tax consequences" to the debtor (under section 80, subsection 105(1) or otherwise) where a debt is forgiven under the creditor's will.
As you indicate in your letter, that practice as it relates to the forgiveness of debt under a will is now law by virtue of paragraph 80(1)(h) of the Act.
The above comments are an expression of opinion only and are not binding on the Department, as explained in paragraph 24 of Information Circular 70-6R. We trust however that they are of assistance to you.
for Director Financial Industries Division Rulings Directorate