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.
XXXXXXXXXX
Dear XXXXXXXXXX
I am writing in response to your letter received on January 22, 1993, in which you expressed concerns about an advance income tax ruling referred to in a newspaper article, a copy of which you enclosed. I apologize for the delay in replying.
Due to the confidentiality provisions of the Income Tax Act, I am unable to disclose the income tax affairs of another taxpayer. I can confirm, however, that the Income Tax Act does contain loss limitation rules which restrict steps intended to transfer losses between unrelated persons. The Act provides explicit exceptions for transactions that result in the transfer of losses between related corporations. These specific sections of the Act represent a long- standing policy. This was reflected in the White Paper on Tax Reform released in 1987 by the former Minister of Finance, the Honourable Michael Wilson, in which he stated that "the scheme of the Act as a whole, and the expressed intent of the corporate loss limitation rules, clearly permit many such transactions between related corporations".
I thank you for bringing this matter to my attention and I trust that this information will assist you in understanding the Department's position in this area.
Yours sincerely,
Otto Jelinek
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© Her Majesty the Queen in Right of Canada, 1993
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© Sa Majesté la Reine du Chef du Canada, 1993
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