CRA rules on cash circling to effect intercompany payments and that s. 80 does not apply to a loan extinguishment without an explicit set-off

A ruled-upon loss shifting transaction between Lossco and its indirect Parent avoids a daylight loan through Lossco making a series of loans to Parent and Parent making a series of subscriptions for Lossco pref shares (so that presumably the same sum of money is continually circled, although the ruling letter is too bashful to say this).

The transaction will be unwound by Lossco delivering the loans (owing to it by parent) to Parent as the redemption proceeds for the prefs in its capital.  CRA ruled that this would not give rise to a forgiven amount (see also 2013-0498551R3).

Neal Armstrong.  Summary of 2014 Ruling 2014-0543911R3 under s. 111(1)(a).