P.K. Tang (613) 957-2103
January 16, 1986
Dear Sirs:
Re: Replacement Property
This is in reply to your letter of November 11, 1985 wherein you requested our view as to whether or not a mini-storage facility would qualify as a "former business property" under the Income Tax Act (the "Act"). In this connection, you enclosed a copy of a letter that you sent us in 1980 concerning a mini-storage facility being financed by the issuance of a Small Business Development Bond and our reply thereto. In our reply, we indicated that the company in question would not be considered to be carrying on a "specified investment business" as defined in the Act.
We noted that the mini-storage facility is used by the company to provide various sized storage units to the general public. In addition, the company also provides cleaning, security and other services required to make these units appeal to the general public. Hence, we are inclined to agree with you that this storage facility could qualify as a "former business property" as defined under subsection 248(1) of the Act. When the company sells this facility and replaces it with a similar facility the company may make an election under subsection 44(1) of the Act if other requirements described therein are also met.
Yours truly,
for Director Small Business and General Division Specialty Rulings Directorate Legislative and Intergovernmental Affairs Branch