19 April 1994 External T.I. 9337735 - REVISION OF NON-CAPITAL 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.

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

Principal Issues:

Whether loss carry-overs from former years can be revised in subsequent years by CCA increases.

Position TAKEN:

Yes. The Department stated its position at the CTF Round Table of 1988, question 77.

Reasons FOR POSITION TAKEN:

Where a taxpayer sustained a non-capital loss in a taxation year, that non-capital loss can be reviewed in any of the taxation years referred to in 111(1)(a) of the Act. The time limitation imposed by 152(4) of the Act will, however, be applicable where such a revision of the non-capital loss results in a change in the tax payable for the year in which the loss was sustained.

		                              5-933773
XXXXXXXXXX                                M. Shea-DesRosiers

Attention: XXXXXXXXXX

April 19, 1994

Dear Sirs:

Re: Revision of non-capital loss

This is in reply to your letter of December 23, 1993 concerning the above-mentioned subject. We apologize for the delay in replying to your letter. All references to statute are to the Income Tax Act S.C. 1970-71-72, c.63 as amended consolidated to June 10, 1993 (the "Act").

You enquire as to whether loss carry-overs from former years can be revised in subsequent years by CCA increases.

A similar question was asked at the Canadian Tax Conference Round Table in 1988, question 77, and the Department stated its position in the following manner:

"Where a request, as contemplated in paragraph 10 of Information Circular 84-1, is made by a taxpayer, the department will issue a nil assessment or notification that no tax is payable. Therefore, the taxpayer is then advised of the acceptance of request, and the taxpayer's file is automatically updated.

Where a taxpayer sustained a non-capital loss in a taxation year, that non-capital loss can be reviewed in any of the taxation years referred to in paragraph 111(1)(a) of the Income Tax Act (the "Act") (year of the loss application). The time limitation imposed by subsection 152(4) of the Act will, however, be applicable where such a revision of the non-capital loss results in a change in the tax payable for the year in which the loss was sustained."

Should you have any further question on this matter pertaining to a particular situation, you should contact your local district office.

The foregoing opinions are not rulings and, in accordance with the guidelines set out in Information Circular 70-6R2 dated September 28, 1990, are not binding on the Department.

We trust the above comments will be of assistance to you.

Yours truly,

for Director
Financial Industries Division
Rulings Directorate