CRA confirms that an s. 20(1)(ww) deduction is available for a TOSI taxable capital gain even where an offsetting allowable capital loss

Although, where an individual is subject to the tax on split income (“TOSI”) under s. 120.4(2) for a particular year, and the amount of split income is also included in the individual’s income under Division B of Part I, double taxation is avoided pursuant to s. 20(1)(ww), which provides a deduction, in computing an individual’s income from a business or property, for an amount equal to that of the individual’s split income.

CRA confirmed that the s. 20(1)(ww) deduction is available for a taxable capital gain that is included in TOSI even where the individual realized an offsetting allowable loss from an unrelated transaction in the same year.

Neal Armstrong. Summary of 20 June 2023 STEP Roundtable, Q.9 under s. 20(1)(ww).