Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
Principal Issues:
Whether or not the prepayment of maintenance for child support can be deducted in whole or in part.
Position:
No
Reasons:
The court order providing for the child support payments was suspended for three years in exchange for a lump sum payment.
971254
XXXXXXXXXX Jacques E. Grisé
(613) 957-2059
Attention: XXXXXXXXXXOctober 22, 1997
Dear Sirs:
Re: Prepayment of Monthly Child Support
This is in reply to your letter of February 26, 1997 to the Surrey Taxation Centre concerning the payment in 1996 of a single payment in lieu of paying monthly maintenance for child support for three years. We apologize for the delay in replying.
In our view, a single payment or any part of such a single payment is not deductible in computing the payer's income for a taxation year. In order to be deductible, a payment must be in respect of an allowance payable on a periodic basis. The second paragraph of the court order submitted with your letter indicates "XXXXXXXXXX". Accordingly, from the date of the $XXXXXXXXXX payment there is no longer a requirement for an allowance to be paid on a periodic basis for a period of three years and no deduction for child support can be allowed for tax purposes.
Please note that paragraph 13 of Interpretation Bulletin IT-118R3 still reflects the Department's position with respect to a payment made in place of several periodic payments not yet due but imposed under a court order.
Yours truly,
John F. Oulton
for Director
Business and Publications Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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