Principal Issues: (1). Whether a bankrupt individual can continue to claim CCA on assets under his control while bankrupt.
(2). If the individual ceases operations at a later date, whether he or she can claim a terminal loss.
(3). Whether the UCC be adjusted by the forgiven debts that specifically relate to a specific asset or any asset.
(4). Whether forgiven credit card debt, used to purchase depreciable assets, fall under the debt forgiveness rules.
Position: (1). Yes.
Reasons: A bankrupt individual, in possession of assets under his or her control, may claim capital cost allowance or a terminal loss on assets acquired before he or she was adjudged bankrupt. The debt forgiveness rules do not apply to a bankruptcy.