CRA finds that s. 12(14) does not deny losses on the disposition of housing units

S. 12(14) provides that a taxpayer’s loss from a business in respect of a flipped property is deemed to be nil.

CRA found that s. 12(14) does not deem a loss on the disposition of a housing unit to be nil, irrespective of whether the housing unit was held as inventory or capital property. If held as inventory, a flipped property by definition excludes inventory. If held as capital property, deeming a loss from a business to be nil does not have the effect of deeming a capital loss to be nil.

Although not stated by CRA, the implication appears to be that s. 12(14) only denies the deduction of net operating losses from the fictional flipped-property business.

Neal Armstrong. Summary of 9 October 2025 APFF Financial Planning Roundtable, Q.6 under s. 12(14).