Subsection 5903.1(1)
Administrative Policy
21 April 2015 Internal T.I. 2014-0560811I7 - FACL carryback Surplus & PAS election
In 2010, CFA paid the "2010 Dividend" to its 100% parent ("Canco"). On audit, CRA identified that CFA had realized a capital gain (giving rise to foreign accrual property income). Canco designated a portion of a foreign accrual capital loss arising from a disposition in 2011 to be carried back to 2010.
CRA noted that there was "some uncertainty with respect to the application of the Act and the Regulations to the carryback of a FACL incurred by a foreign affiliate in a taxation year that ends after August 19, 2011 to one of its taxation years that end before August 20, 2011," it went on to state (after referencing the Finance Explanatory Notes) that "it is the CRA's current practice to generally not challenge FACL carrybacks that straddle August 19, 2011, provided there is no double use of any such loss."
See summaries under Reg. 5901(2)(b) and Reg. 5907(1) – net earnings.
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 220 - Subsection 220(3.2) | no relief for late-filed Reg. 5901(2)(b) election | 54 |
| Tax Topics - Income Tax Regulations - Regulation 5901 - Subsection 5901(2) - Paragraph 5901(2)(b) | no relief for late-filed Reg. 5901(2)(b) election | 172 |
| Tax Topics - Income Tax Regulations - Regulation 5907 - Subsection 5907(1) - Net Earnings | surplus pools are not to be retroactively adjusted for a FACL carryback | 171 |
| Tax Topics - Income Tax Regulations - Regulation 600 | no relief for late-filed Reg. 5901(2)(b) election | 54 |