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.
| |
December 5, 1989 |
| TO - VANCOUVER DISTRICT OFFICE |
FROM - Business and General |
| |
Division |
| Mr. Stan McKenzie |
M. Eisner |
| Chief of Audit |
(613) 957-2138 |
| |
File No. 7-4353 |
SUBJECT: Capital Loss on Winding-Up of Subsidiary
This is in reply to your memorandum of September 15, 1989 concerning the application of subparagraph 40(2)(g)(ii) in the following situation:
24(1)
OUR COMMENTS
The comments in paragraph 6 of IT-239R2 are generally directed to a situation where a shareholder incurs a loss in respect of a loan with the only related tax ramification being that subparagraph 40(2)(g)(ii) will not deem the loss to be NIL provided the requirements in paragraphs 6(a) to (d) have been satisfied. In our view, this paragraph implies that if there are other considerations with respect to a loss (e.g. subsections 88(1.1) and 80(3)), the comments in the paragraph are not applicable. In addition, paragraph 6(d) requires that "the loan from the shareholder to the corporation at less than a reasonable rate of interest (or at no interest) does not result in any undue tax advantage to either the shareholder or the corporation".
24(1)
24(1) 21(1)(b)
ChiefServices, Public Utilities andExempt Corporations SectionBusiness and General DivisionSpecialty Rulings DirectorateLegislative and IntergovernmentalAffairs Branch
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© Her Majesty the Queen in Right of Canada, 1989
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© Sa Majesté la Reine du Chef du Canada, 1989
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