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 CCRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ADRC.
Principal Issues:
1. Whether paragraph 13(7)(e) of the Act applies to a disposition of property from a US sister company to a Canadian sister company.
2. Whether subsection 1102(3) of the Regulations applies to the property the Canadian company acquires from the US company.
Position: 1. Question of fact.
2. Yes.
Reasons:
1. Paragraph 13(7)(e) of the Act only applies where the property acquired by the Canadian company is "capital property of the transferor".
2. The property is not "depreciable property" of the transferor by virtue of subsection 1102(3) of the Regulations.
2003-003185
XXXXXXXXXX A. Seidel
(613) 957-2058
October 22, 2003
Dear XXXXXXXXXX:
Re: Non-arm's Length Acquisitions - Applications Software
This is further to our telephone conversation (Seidel/XXXXXXXXXX) and in reply to your letter, dated July 24, 2003, concerning the application of subsection 1102(3) of the Income Tax Regulations to a non-arm's length acquisition of computer "applications software".
As requested, we have enclosed a severed copy of our response to file 2003-003768, which is a clarification of our response in our letter of interpretation 2003-0014995, to which you referred.
Thank you for taking the time to write us.
Yours truly,
John Oulton
for Director
Business and Partnerships Division
Income Tax Rulings Directorate
Policy and Legislation Branch
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