Xref: utzoo can.politics:1457 misc.taxes:505
Path: utzoo!mnetor!lsuc!dave
From: dave@lsuc.uucp (David Sherman)
Newsgroups: can.politics,misc.taxes
Subject: unintelligible legislation
Message-ID: <1988Feb27.225704.29588@lsuc.uucp>
Date: 28 Feb 88 03:57:03 GMT
Distribution: can
Organization: Law Society of Upper Canada, Toronto
Lines: 76
Summary: contest, prize (heh heh)

I'm usually not at all bothered by the fact that the
Income Tax Act is incomprehensible to non-lawyers.
After all, it deals with a complex subject.  I'm trying
to parse a particular subsection at the moment, however
(it's one that will be changed due to the budget of a
couple of weeks ago), and I'm finding it a little bit much,
even though I read the Act all the time.  Just thought I'd
share it with the net, so you can all know the rules that
govern you :-)

Income Tax Act, section 56.1, subsection (2):

(2). For the purposes of paragraphs 56(1)(b), (c) and (c.1),
the amount, if any, by which
	(a) the aggregate of all amounts each of which is
	an amount (other than an amount to which paragraph
	56(1)(b), (c) or (c.1) otherwise applies) paid by a
	person in a taxation year, pursuant to a decree, order
	or judgment of a competent tribunal or pursuant to a
	written agreement, in respect of an expense (other than
	an expenditure in respect of a self-contained domestic
	establishment of the person or an expenditure for the
	acquisition of tangible property that is not an expenditure
	on account of a medical or educational expense or in
	respect of the acquisition, improvement or maintenance of
	an owner-occupied home of a taxpayer described in
	subparagraph (i) or (ii)) incurred in the year or the
	immediately preceding taxation year for maintenance of
	a taxpayer who is
		(i) that persons' spouse or former spouse, or
		(ii) where the amount was paid pursuant to an
		order made in accordance with the laws of a province,
		an individual within a prescribed class of persons
		described in the laws of the province,
	or for the maintenance of children of the taxpayer in the
	taxpayer's custody, or both the taxpayer and such children,
	if at the time the expense was incurred and throughout the
	remainder of the year, the taxpayer was living apart from
	that person
exceeds
	(b) the amount, if any, by which
		(i) the aggregate of all amounts each of which is an
		amount included in the aggregate determined under
		paragraph (a) in respect of the acquisition or
		improvement of an owner-occupied home of the taxpayer,
		including any payment of the principal or interest in
		respect of a loan made or indebtedness incurred to
		finance, in any manner whatever, such acquisition
		or improvement
	exceeds
		(ii) the aggregate of all amounts each of which is
		an amount equal to 1/5 of the original principal
		amount of a loan or indebtedness described in
		subparagraph (b)
shall, where the decree, order, judgment or written agreement,
as the case may be, provides that this subsection and subsection
60.1(2) shall apply to any payment made pursuant thereto, be deemed
to be an amount paid by that person and received by the taxpayer
as an allowance payable on a periodic basis.



Aha, now I understand it (typing it always helps).  A prize
(free tax advice by email) to the first person who tells me
what the above really means. (I'll even throw in a clue: paragraphs
56(1)(b), (c) and (c.1) provide for certain alimony and maintenance
(support) payments to be deducted by the payer and taxable to the
recipient.)

What's scary is that this is actually an important rule for separated
or divorced couples to know, when negotiating support arrangements.

David Sherman
The Law Society of Upper Canada
-- 
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