NO: IT-481 (Consolidated)
DATE: See Bulletin Revisions section
SUBJECT: INCOME TAX ACT
Timber Resource Property and Timber Limits
REFERENCE: The definition of “timber resource property” in subsection 13(21) of the Income Tax Act (the “Act”); and subsection 1101(3), paragraph 1100(1)( e ), Class 33 of Schedule II and Schedule VI of the Income Tax Regulations (the “Regulations”) (also the definition of “undepreciated capital cost” in subsection 13(21), paragraph 20(1)(a) and paragraph 39(1)( a ) of the Act; and subsection 1102(14) and subparagraph 1100(1)(a)(xxiv) of the Regulations)
Latest Revisions – Reference section and ¶s 2, 7 and 8
This bulletin is a consolidation of the following:
- Interpretation Bulletin IT-481 dated November 27, 1981; and
- subsequent amendments thereto.
For further particulars, see the “ Bulletin Revisions ” section near the end of this bulletin.
Unless otherwise noted, all statutory references throughout the bulletin are to the Act.
This bulletin discusses the differences between the tax treatment of “timber resource properties” (as defined in subsection 13(21)) and “timber limits” (referred to in paragraph 1100(1)( e ) of the Regulations). The cost of acquisition of the former is included in Class 33 (which has a 15% rate of capital cost allowance (“CCA”)), and a disposition of such property generally results in an income inclusion rather than a capital gain. A deduction in respect of the capital cost of of a timber limit or a right to cut timber from a limit other than a timber resource property is calculated in accordance with Schedule VI of the Regulations and the disposition of such property may result in a capital gain.