17 August 1992, T.I. 921353 (April 1993 Access Letter, p. 135, ¶C20-1141)

Forgiveness of accrued interest has legal effect from the date of the amendment to the debt obligation or such later date as is provided in the amendment. It is not possible to retroactively waive the right to receive interest.

In order for the forgiveness of accrued interest owing by a non-arm's length person to be effective, there must be an amendment to the original agreement. A unilateral forgiveness in a non-arm's length situation will not suffice. Where the forgiveness has legal effect, it is effective only from the date of the amendment.

In order for the forgiveness of accrued interest owing by a non-arm's length person to be effective, there must be an amendment to the original agreement. A unilateral forgiveness in a non-arm's length situation will not suffice. Where the forgiveness has legal effect, it is effective only from the date of the amendment. The fact that interest which formerly was receivable has been waived or forgiven does not mean that the interest was a bad debt. Sincere efforts must have been made to collect the receivable.