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.
Principal Issues: What is the reassessment period for a public corporation with respect to the loss carry backs.
Position: Seven years.
Reasons: The combined effect of subparagraph 152(4)(b)(i) and paragraph 152(6)(c).
January 19, 2011
Toronto Centre Tax Services Office HEADQUARTERS
Income Tax Rulings
Directorate
Bing Zhang
Attention: Sarb Bains, A/Large File Case Manager (613) 957-2095
Audit Division
2010-038720
Reassessment Period for Loss Carry Backs
This is in reply to your emails of November 16 and November 24, 2010 wherein you requested an interpretation regarding the reassessment period for applying loss carry backs. In this case a public corporation reported a non-capital loss for the 2009 taxation year. The corporation wishes to carry the loss back to the 2006 and 2007 taxation years.
The normal reassessment period is defined in subsection 152(3.1) of the Income Tax Act (the "Act"). The period runs from the earlier of the day of mailing of an original assessment for the year and the day of mailing of an original notification that no tax is payable for the year. Paragraph 152(3.1)(a) provides that the reassessment period for a public corporation is four years.
Pursuant to paragraph 152(4)(b) of the Act, the normal reassessment period may be extended by an additional three years. The rules governing the extension are contained in subparagraphs 152(4)(b)(i) to (vi). In the instance of subparagraph 152(4)(b)(i) the reassessment period can be extended as required pursuant to subsection 152(6). Paragraph 152(6)(c) pertains in part to the deduction of losses under section 111, and the additional three years extension under subparagraph 152(4)(b)(i) is applicable to the carry back of such losses.
Should you need clarification or additional information on the foregoing, please do not hesitate to contact Bing Zhang at the number provided above.
B.J. Skulski
Manager
Insolvency and Administrative Law Section
Ontario Corporate Tax Division
Income Tax Rulings Directorate
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