29 August 1997 External T.I. 9720845 - UTILIZATION OF LOSSES FOLLOWING A CHANGE OF CONTROL

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.

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Attention: XXXXXXXXXX

August 29, 1997

Dear Sirs:

Re: Subsection 111(5) of the Income Tax Act ("Act")

We are writing in response to your letter of July 23, 1997 wherein you requested our confirmation that subsection 111(5) of the Act would not apply to deny certain non-capital losses in the circumstances described in your letter.

The situation described in your letter appears to relate to an actual fact situation. To the extent that you require assistance in determining the tax treatment with regard to a completed transaction, you should contact your local tax services office. To the extent that you require confirmation of the tax consequences of proposed transactions, your request should be the subject of a request for an advance income tax ruling. The procedures for requesting an advance income tax ruling are outlined in Information Circular 70-6R3 dated December 30, 1996 issued by Revenue Canada, Customs, Excise and Taxation. Since the issue of whether a corporation is carrying on the same business in which the non-capital losses were incurred is a question of fact, we regret that we are unable to offer any general comments which will be of assistance to you.

Yours truly,

for Director
Reorganizations and International Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch