Income Tax Severed Letters - 2026-05-20

Ruling

2026 Ruling 2025-1086331R3 - : Loss Consolidation

Principal Issues: 1) Whether a corporation with accumulated non-capital losses can use those losses against interest income on loans made to an related/affiliated corporation; 2) Whether the proposed loss consolidation transactions are consistent with the scheme of the Act.

Position: 1) Yes; 2) Yes.

Reasons: The proposed loss consolidation meets the requirements for deductibility of interest in paragraph 20(1)(c) and the carry forward of accumulated non-capital losses; 2) The proposed transactions will be legally effective, commercially reasonable, and be fully implemented within 36 months of the commencement of the proposed transactions - further, the proposed transactions are consistent with the scheme of the Act as it applies to the use of losses within an affiliated/related group.

2025 Ruling 2024-1046651R3 - Loss Consolidation

Unedited CRA Tags
12(1)(c) and (x); 20(1)(c); 55(2) and (2.1); 112; Part IV.1; Part VI.6; 245(2)

Principal Issues: Whether a corporation with accumulated non-capital losses can use those losses against interest income on loans made to related/affiliated corporations; 2) Whether the proposed loss consolidation transactions are consistent with the scheme of the Act.

Position: 1) Yes; 2) Yes.

Reasons: The proposed loss consolidation meets the requirements for deductibility of interest in paragraph 20(1)(c) and the carry forward of accumulated non-capital losses; 2) The proposed transactions will be legally effective, commercially reasonable, and be fully implemented within 36 months of the commencement of the proposed transactions – further, the proposed transactions are consistent with the scheme of the Act as it applies to the use of losses within an affiliated/related group.

2025 Ruling 2025-1076391R3 - Loss Consolidation

Unedited CRA Tags
12(1)(c) and (x); 18.2; 20(1)(c); 55(2) and (2.1); 112; Part IV.1; Part IV.6, 245(2).

Principal Issues: Whether a corporation with accumulated non-capital losses can use those losses against interest income on loans made to an related/affiliated corporation; 2) Whether the proposed loss consolidation transactions are consistent with the scheme of the Act.

Position: 1) Yes; 2) Yes.

Reasons: The proposed loss consolidation meets the requirements for deductibility of interest in paragraph 20(1)(c) and the carry forward of accumulated non-capital losses; 2) The proposed transactions will be legally effective, commercially reasonable, and be fully implemented within 36 months of the commencement of the proposed transactions – further, the proposed transactions are consistent with the scheme of the Act as it applies to the use of losses within an affiliated/related group.

2025 Ruling 2025-1081231R3 - Supplemental ruling to 2025-107639

Unedited CRA Tags
12(1)(c) and (x); 18.2; 20(1)(c); 55(2) and (2.1); 112; Part IV.1; Part IV.6, 245(2).

Principal Issues: Whether the changes to the Facts impact the rulings given in 2025-107639.

Position: Supplemental ruling given.

Reasons: The changes do not impact the rulings given in 2025-107639.

Technical Interpretation - External

4 February 2026 External T.I. 2025-1083931E5 F - Biens exclus - Sous-alinéa 1100(1.13)a)(ii) RIR

Unedited CRA Tags
RIR : 1100(1.13)a)

Principales Questions: Les biens suivants, donnés en location et destinés à un usage résidentiel, constituent-ils des « biens exclus » au sens du sous-alinéa 1100(1.13)a)(ii) RIR : thermopompe (murale et centrale), climatiseur (mural et central), fournaise, chaudière, ainsi que des équipements et accessoires tels que des plinthes et convecteurs électriques, chauffe-eau, humidificateurs, génératrices, panneaux et entrées électriques? / Do the listed items constitute "exempt property" under subparaph 1100(1.13)(a)(ii) ITR when rented for residential use?

Position: Oui / Yes.

Raisons: Les biens énumérés, lorsqu'ils sont conçus pour être utilisés par une unité d'habitation autonome, pourraient constituer des biens exclus en vertu du sous-alinéa 1100(1.13)a)(ii) RIR. / The listed properties, when designed for use by a self-contained domestic establishment, could constitute exempt property pursuant to subparagraph 1100(1.13)(a)(ii) of the ITR.

25 November 2025 External T.I. 2025-1049831E5 - Capital Cost of a XXXXXXXXXX - Temporary Workspace

Unedited CRA Tags
13(21), 14(5), 18(1)(a) 18(1)(b), 18(9), 20(1)(a), 20(1)(aa), 20(1)(dd 54, 248(1), 127.44, 127.44(9), 127.44(15) and 127.49 of the Income Tax Act, Class 14, 14.1, 43.1, 43.2 and 57 of Schedule II of the Income Tax Regulations; 1100(1)(c) , 1100(1)(e

Principal Issues: Whether fees incurred pursuant to a Temporary Workspace Agreement can be included in the capital cost of a XXXXXXXXXX for purposes of computing the CCUS ITC of a Taxpayer pursuant to section 127.44 of the Income Tax Act?

Position: Question of fact but likely no.

Reasons: While a question of fact, it appears that the TWA Fees would not be eligible to be included in the capital cost of the XXXXXXXXXX as the associated rights do not appear to form an integral part of or necessary to the use of the XXXXXXXXXX. As well, these fees do not fall within the meaning of an installation cost, site preparation cost, or other cost to put the XXXXXXXXXX into service. Rather, the TWA Fees appear to be an expenditure incurred in connection with a separate asset that is of a capital nature and therefore, would not be a cost that could be included in Class 57 for CCUS ITC purposes.