15 April 1988 Income Tax Severed Letter 7-2529 - [Paragraph 5, Interpretation Bulletin, IT-111R]

By services, 22 July, 2022
Official title
[Paragraph 5, Interpretation Bulletin, IT-111R]
Language
English
Document number
Citation name
7-2529
Severed letter type
Miscellaneous
d7 import status
Drupal 7 entity type
Node
Drupal 7 entity ID
657553
Extra import data
{
"field_external_guid": [],
"field_proprietary_citation": [],
"field_release_date_new": "1988-04-15 08:00:00",
"field_tags": []
}
Main text

REVENUE CANADA TAXATION MEMORANDUM

APR 15 1988

TO- SAINT JOHN, N.B. DISTRICT OFFICE

FROM- Small Business and 
                  General Division 
                  F.B. Fontaine 
                  (613) 957-2140
ATTENTION     D. Arsenault 
                          Enquiries and Office 
                             Examination Section

RE: Paragraph 5, Interpretation Bulletin, IT-111R

This is in reply to your memorandum of February 1, 1988 concerning the calculation of the total amount expected to be received under a life annuity by an annuitant where the table in IT-111R is not adequate.

Enquiries and Taxpayer Assistance Division at Head Office has tables comprising a greater range of values of life expectancies than those shown in the Bulletin. This Division should be consulted with regard to some of the information required.

We understand that the basic information provided by these tables is the number of yearly payments (based on life expectancy) that an annuitant can expect to receive under an annuity contract given certain information, such as:

(i) the annuitant's age at the time he/she enters into the annuity contract,

(ii) whether the annuitant is male or female,

(iii) whether the particular contract is for a joint and last survivor annuity or a single life annuity, and

(iv) whether the annuity payments will be for life or a fixed guaranteed period.

It would appear that XXXX would have to provide further details under (i) to (iii) above for the appropriate information to be extracted from the tables.

We should note, however, that based on the information provided by XXXX in example B) of their letter a determination of the amount of the donation to be made by the annuitant would not be possible. In order to calculate the donation we must also be able to determine the expected payout over the life of the annuity. This would not be possible where the annuity is calculated on a variable rate of interest.

We trust the above comments will be helpful to you and will also assist in advising XXXX accordingly.

for Director Director Small Business and General Division Specialty Rulings Directorate Legislative and Intergovernnental Affairs Branch