22 March 1990 Ruling 59633 F - Allowable Business Investment Loss

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

March 22, 1990

Dear Sirs:

Re: Advance Income Tax Ruling Request

We are writing in reply to your letter of February 22, 1990 wherein you requested an advance income tax ruling regarding an allowable business investment loss ("ABIL")  on behalf of investors in your corporation.

As noted in our previous correspondence to you dated February 5, 1990, we cannot consider your request for an advance tax ruling in a situation such as this where the matter on which the determination is requested is primarily one of fact. Determinations of fact are generally resolved at a District Office upon audit.

You should note that the ABIL provisions are relieving provisions directed at assisting taxpayers who have made legitimate investments and who have after a number of years come to realize that their investment has been lost.  ABILs were not introduced into the Income Tax Act to operate as or to be promoted as a tax shelter.  The general anti-avoidance rules which allow Revenue Canada to redetermine tax consequences when a transaction would otherwise result in a "tax benefit" may have application in a situation where a promoter has sold investments to be realized as ABILs over a very short time frame.

Yours truly,

for Director Business and General DivisionSpecialty Rulings DirectorateLegislative and Intergovernmental  Affairs Branch