23 June 1998 External T.I. 9812275 - STOCK LOSSES AND BUSINESS LOSSES

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:

Can Stock losses be business losses ?

Position:

Question of fact

Reasons:

IT 479R

XXXXXXXXXX 981227
C. Tremblay

June 23, 1998

Dear XXXXXXXXXX:

Re: Stock Losses and Business Losses

This is in reply to your facsimile letter of March 31, 1998, concerning a newspaper article discussing stock market losses and business losses resulting from dispositions of listed securities.

Generally, gains or losses on transactions of an individual trading securities on a stock market would be on account of capital unless the transactions are determined to be carried on in the same way as a trader or dealer in securities, or there is an isolated transaction that may be considered an adventure or concern in the nature of trade. The courts have applied tests involving the “course of conduct” and “intent” when making such a determination. Paragraphs 10 to 12 of Interpretation Bulletin, IT-479R, Transactions in Securities (copy enclosed for your information) discuss some of the factors that may be considered in determining whether the transactions are on account of income. You may wish to contact the Edmonton Services Taxation Office if you require further assistance with respect to any particular situation.

We trust our comments are of assistance

Yours truly,

J. F. Oulton, CA
for Director
Business and Publications Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch