,canada ,cu/oms                       #a
& ,rev5ue ,ag5cy

          ,9t]pret,n ,bullet9
    
,subject3 ,9come ,tax ,act
  ,prizes f ,lott]y ,s*emes1 ,pool
  ,sy/em ,bett+ & ,giveaway ,3te/s
,numb]3 ,,it-#bac;,r
,date3 ,octob] #ai1 #aihd
,ref];e3 ,p>agraph #dj7#b77f7 7al
  subsec;ns #eb7#d71 #e7#a7 & #i7#a71 &
  p>agraph #fi7#a77c77

  ,? bullet9 c.els & replaces ,,it-#bac
dat$ ,may #ab1 #aige4 ,curr5t revi.ns >e
designat$ 0v]tical l9es4

       ,lott]y ,s*emes 7p>agraphs
                 #a-c7
    
#a4 ,! am.t or value (a prize rcvd 0a
  taxpay] f a lott]y s*eme is n taxa# z
  ei a capital ga9 or 9come un.s1 due 6!
  circum/.es apply+ 6! lott]y         #a
              ,,it-#bac;,r           a#a
  s*eme1 ! prize c 2 3sid]$ 6be 9come f
  employ;t1 busi;s or prop]ty or a prize
  = a*ieve;t ref]r$ 6in p>agraph
  #ef7#a77n74
#b4 ,:ile p>agraph #dj7#b77f7 specifies
  t no taxa# capital ga9 or all[a#
  capital loss results f ! 4posi;n (a
  *.e 6w9 or a "r 6rcv an am.t z a prize
  9 3nec;n )a lott]y s*eme1 subsec;n
  #eb7#d7 /ates t =! purposes ( -put+
  any tax 3sequ;es af rcvg a prize a
  w9n] 9 a lott]y s*eme is deem$ 6h
  acquir$ ! prize at a co/ equal 6xs
  fair m>ket value at ! "t ( acquisi;n4
#c4 ,a lott]y has be5 def9$ z a s*eme =
  4tribut+ prizes 0lot or *.e am;g
  p]sons :o h pur*as$ a ticket or a "r
  6! *.e4 ,if r1l skill or m]it plays a
  "p 9 det]m9+ ! 4tribu;n (! prize !
  s*eme is n a lott]y 7un.s x is bas$
  ess5ti,y on *.e &! degree ( skill is
  m9imal74 ,ag1 :5 ! *.es (a prize >e
  obta9$ :olly gratuit\sly1 z = 9/.e1 a
                                      #b
              ,,it-#bac;,r           b#a
  prize aw>d$ 6! w9n] (a game1 ! s*eme
  is n a lott]y4

     ,pool ,sy/em ,bett+ 7p>agraphs
                 #d-e7
    
#d4 ,p>agraph #dj7#b77f7 al provides t
  no taxa# capital ga9s or all[a#
  capital losses >ise f ! 4posi;n (a *.e
  6w9 a bet or a "r 6rcv an am.t z w9n+s
  on a bet 9 3nec;n )a pool sy/em (
  bett+ ref]r$ 6in sec;n #ahh.a (!
  ,crim9al ,code4 ,! nature ( pool sy/em
  bett+ is s* t ! only w9n+s >e 9 ! =m (
  ca% f ! respective pool4 ,3sequ5tly1
  no a4i;nal capital ga9
--------------------------------------#b
  or loss tax 3sequ;es cd >ise on
  subsequ5t 4posi;n (! w9n+s & ?us x is
  n nec 7z describ$ 9 #b abv1 9 ! case
  (a lott]y7 6deem ! w9n+s 6h be5
  acquir$ at fair m>ket value4
#e4 ,a 8pool sy/em0 ( bett+ is def9$ 9 !
  ,a?letic ,3te/s & ,ev5ts ,pools     #c
              ,,it-#bac;,r           a#b
  ,act z a pool sy/em ( bett+ on any
  -b9,n ( two or m profes.nal a?letic
  3te/s or ev5ts4 ,! fact t a degree (
  skill is 9volv$ 9 ! selec;n (! \tcome
  (! 3te/ or ev5t 9 ! pool bett+
  4t+ui%es x f a lott]y s*eme z describ$
  9 #c abv4

     ,o!r ,s*emes 7p>agraphs #f-i7
    
#f4 ,": a prize has be5 won o!rwise ?an
  "? a lott]y s*eme or a pool sy/em (
  bett+1 nei p>agraph #dj7#b77f7 nor
  subsec;n #eb7#d7 w apply4 ,! tax
  implic,ns ( rcvg ^! o!r prizes w v>y1
  dep5d+ on ! foll[+ factors3
  7a7 ,:5 ! prize has be5 rcvd z a gift1
    x is n 9clud$ 9 -put+ 9come at ! "t
    ( receipt4 ,h["e1 ! recipi5t w 2
    deem$ 6h acquir$ ! prize at xs fair
    m>ket value pursuant 6p>agraph
    #fi7#a77c71 s t a subsequ5t 4posi;n
    (! prize w result 9 a capital ga9 on
    any 9cr1se 9 value s9ce ! "t (    #d
              ,,it-#bac;,r           b#b
    xs acquisi;n4 ,a prize c 2 r1sonably
    3sid]$ 6be a gift f ! viewpo9t (!
    recipi5t1 ev5 ?\< *.e &/or skill may
    h be5 9volv$ 9 ! w94 ,ord9>ily a
    gift is n 3sid]$ 6h be5 made until !
    donee has rcvd deliv]y (! gift &
    a3ept$ x 9 a -plet$ & irrev]si#
    transac;n4
  7b7 ,! prize w 2 rcvd z 9come ": x is
    rcvd 0virtue (! recipi5t's employ;t
    pursuant 6subsec;n #e7#a7 & p>agraph
    #f7#a77a71 rcvd 0virtue (!
    recipi5t's busi;s pursuant 6subsec;n
    #i7#a7 or rcvd 9 respect ( an
    a*ieve;t 9 a field ( 5d1vor ord9>ily
    c>ri$ on 0! recipi5t pursuant
    6p>agraph #ef7#a77n7 7see
    ,,it-#ge;,r#b74
  7c7 ,": ! prize is n rcvd z 9come z
    describ$ 9 7b7 & is n a gift z
    describ$ 9 7a71 no am.t w 2 9clud$ 9
    9come ^u receipt (! prize &!
    provi.ns ( p>agraph #fi7#a77c7 w n
    apply4 ,s* a situ,n wd >ise ":    #e
              ,,it-#bac;,r           c#b
    ! 3te/ant has 9curr$ a co/ t[>ds
    w9n+ ! prize s* z pur*as+ a ticket
    or pay+ an 5tr.e fee 5titl+ !
    3te/ant 6"picip,n 9 ! 3te/4 ,9 s* a
    case1 :ile "! >e no tax 3sequ;es
    result+ f receipt (! prize1 any
    subsequ5t 4posi;n ( t prize may
    result 9 a capital ga9 or loss4 ,9
    -put+ any s* ga9 or loss ! taxpay]'s
    co/ (! prize w 2 ! orig9al co/ (!
    ticket or 5tr.e fee r ?an ! fair
    m>ket value (! prize z us$ 9 7a7
--------------------------------------#c
    abv4 ,x %d 2 not$ t ": 8p]sonal use
    prop]ty0 is 9volv$1 ! 4#a1jjj
    exemp;n 3ta9$ 9 subsec;n #df7#a7 may
    elim9ate any capital ga9s on 4posi;n
    (a prize z describ$ 9 7a7 & 7c7 abv4
#g4 ,9 "s 9/.es1 a ticket 7or 5tr.e fee7
  (! type describ$ 9 #f7c7 abv 5titles !
  hold] 6"s?+ 9 a4i;n 6a prize1 =
  example1 "s 5t]ta9;t value4 ,":1 9 s*
  a case1 ! por;n (! ticket t relates 6!
  prize is 3sid]$ 9significant 9      #f
              ,,it-#bac;,r           a#c
  rel,n 6! total co/ (! ticket1 ! fact t
  a por;n (! co/ has be5 9curr$ t[>ds !
  prize may 2 ignor$ &! prize w 2 tr1t$
  z a gift 6! taxpay] z describ$ 9 #f7a7
  abv4
#h4 ,": ! w9n] ref]r$ 6in any (!
  p>agraphs abv is a syndicate1 ! 9come
  tax 3sequ;es 6! 9dividual memb]s (!
  syndicate >e ! same4
#i4 ,"s examples (! mann] 9 : ! rules 9
  #f 6#h abv apply >e giv5 9 ! p>agraphs
  : foll[4

        ,employ]-promot$ ,3te/s
             7p>agraph #aj7
    
#aj4 ,": an employ] :o 0 a3u/om$ 6aw>d+
  employees )a bonus has provid$ a s*eme
  or giveaway 3te/ 9 : ! bonus or "s
  am.t 9 lieu (a bonus is divid$ am;g !
  employees z prizes foll[+ a draw1 !
  s*eme wd n 2 a lott]y &! prizes >e
  3sid]$ 6be employ;t 9come "u subsec;n
  #e7#a74 ,h["e1 if ! employees &     #g
              ,,it-#bac;,r           b#c
  _! families a3.t = only a small
  p]c5tage (! "picipants 9 a s*eme1 >e n
  giv5 a fav\r$ posi;n 9 rel,n 6! o!r
  "picipants & !y >e subject 6! same
  3tribu;n require;ts 7if any7 t[>ds !
  s*eme z o!r "picipants1 ! value ( any
  prize won 0*.e is n employ;t 9come b
  is 3sid]$ a w9 f a lott]y s*eme4
  ,"!=e1 p>agraph #dj7#b77f7 & subsec;n
  #eb7#d7 w apply4 ,,it-#dgj1
  8,employees' ,fr+e ,b5efits--,af
  #aihj0 & ,special ,rel1ses 6,,it-#dgj
  4cuss holi"d trips & o!r prizes4

      ,televi.n & ,radio ,programs
             7p>agraph #aa7
    
#aa4 ,! value (a prize or o!r aw>d rcvd
  0a p]son = 2+ at or "picipat+ 9 a
  radio or televi.n program is g5],y n
  9clud$ 9 9come :5 ! p]son is n "py 6an
  employ;t or busi;s 3tract1 &
  7a7 x is aw>d$ "? a draw 2c1 =
    example1 ! p]son is 9 a 8lucky0   #h
              ,,it-#bac;,r           c#c
    s1t or has a c]ta9 br& ( m]*&ise at
    home1 ev5 ?\< ! p]son may h
    6demon/rate "s m9or degree ( skill
    or k 2f 2+ eligi# 6rcv ! prize1 or
  7b7 ! prizes t g 6w9n+ 3te/ants1 !
    3sol,n prizes t g 6los+ 3te/ants or
--------------------------------------#d
    ! m]*&ise gifts giv5 6all "picipants
    >e all t ! p]son rcvs = appe>+ 9 !
    program4

  ,on ! o!r h&1 if a 3tract exi/s1 s* z
  may 2 ! case ": a profes.nal actor1 an
  5t]ta9] or "s o!r p]son appe>s on a
  televi.n %[ z a celebr;y & rcvs a
  giveaway prize or w9s a prize 0skill
  or *.e = appe>+ or "picipat+ 9 a 3te/
  on ! %[1 ! prize w 2 subject 6tax z
  busi;s or employ;t 9come4

  ,9 all cases cit$ 9 ? p>agraph1 !
  capital ga9s implic,ns w 2 e/abli%$ on
  ! basis (! "picul> circum/.es 9 ea*
                                      #i
              ,,it-#bac;,r           a#d
  case "? applic,n (! rules giv5 9 #f or
  #g abv4

        ,free ,tickets 9 ,lieu (
      ,volume ,rebates or ,bonuses
             7p>agraph #ab7
    
#ab4 ,volume bonuses or rebates f
  suppli]s >e 9clud$ 9 -put+ a pur*as]'s
  busi;s 9come4 ,h["e1 ": a suppli]
  provides cu/om]s ) free tickets =a
  draw =a prize )! w9n+ ticket 6be drawn
  /rictly 0*.e1 ! prize is ord9>ily
  3sid]$ a gift4 ,xs value is n 9clud$ 9
  ! recipi5t's busi;s 9come &! applic,n
  ( p>agraph #fi7#a77c7 6! deem$ co/ (
  acquisi;n (! prize is z set \ 9 #f
  abv4 ,on ! o!r h&1 if r1l skill or
  m]it is 9volv$ 9 ! w91 x w 2 a "q (
  fact 6be det]m9$ 9 a3ord.e )!
  circum/.es 9 ea* case :e!r ! prize is
  a gift or :e!r xs value is busi;s
  9come 6! recipi5t4
                                     #aj
          ,annuities z ,prizes       b#d
             7p>agraph #ac7
    
#ac4 ,": ! prize 9 a lott]y s*eme is an
  annu;y1 =! purposes ( det]m9+ ! am.ts
  6be br"\ 969come1 ! 9itial adju/$ mo/
  basis (! annu;y is 3sid]$ 6be ! fair
  m>ket value (! annu;y :5 x 0 acquir$ 9
  a3ord.e ) subsec;n #eb7#d74 ,%d !
  annu;y 2 a prescrib$ annu;y 3tract1 z
  def9$ 9 ,regul,n #cjd1 ! adju/$
  pur*ase price (! annu;y w 2 xs fair
  m>ket value at ! "t x 0 acquir$4 ,=
  prescrib$ annu;y 3tracts & ^? o!r
  annu;y 3tracts n subject 6! a3rual
  rules1 annu;y pay;ts >e br"\ 969come
  "u p>agraph #ef7#a77d7 &a deduc;n f
  9come is all[$ "u p>agraph #fj7a7 =a
  por;n (! adju/$ pur*ase price z
  det]m9$ "u ,regul,n #cjj4 ,= o!r
  annu;y 3tracts1 : >e subject 6! a3rual
  rules1 ! 9come f ! annu;y is det]m9$
  ac 6! provi.ns ( p>agraph
  #ef7#a77d4#a7 & sec;n #ab.b 9 : !
  adju/$ co/ basis is a det]m9+      #aa
              ,,it-#bac;,r           c#d
  factor4 ,9 ! case (! applic,n (
  p>agraph #ef7#a77d4#a7 & sec;n #ab.b1
  ! 9come calcul,n %d 2 furni%$ 0!
  issu]4



















                                     #ab