CRA confirms that taxpayers may use a specific identification method for purposes of the s. 40(3.4) suspended-loss rule

CRA considers that, for purposes of applying the 30-day loss suspension rule in s. 40(3.4), the taxpayer can designate the order in which identical shares were disposed of by it (2003-0002915 F) and that where the loss suspension rule applies, the taxpayer nonetheless can recognize a pro rata loss if there is a reduction in the number of the shares held by it (or an affiliated person) at the end of the 30-day period (2001-008815). CRA has now published an example showing the combined operation of these two administrative positions.

Neal Armstrong. Summary of 2 July 2014 T.I. 2014-0529731E5 F under s. 40(3.4).