90-day rule may not be available for upstream loans

To provide relief from the rule in s. 90(6), which potentially deems an income inclusion to a Canadian-resident taxpayer in respect of an upstream loan made by a foreign affiliate, s. 90(9) potentially allows a deduction under the s. 113 or 91(5) rules that would have been available if the upstream loan had instead been distributed as a dividend or a series of dividends to the taxpayer.

Ken Buttenham points out, among other observations, that it is unclear whether the 90-day look-back rule in Reg. 5901(2) (i.e., for back-dating year-end surplus balances to the time of the dividend) can be used for these purposes.

Neal Armstrong.  Summaries of Ken J. Buttenham, "Are you Ready for the Upstream Loan Rules?", Canadian Tax Journal, (2013) 61:3, 747-68, under ss. 90(6), 90(9) and 90(14).