1. As the sole shareholder of the business, is a dissolution of my CCPC be treated as share disposed at Arm's-length? S4-F8-C1. Article 1.12, "For a loss described in ¶1.11 to qualify as a business investment loss, the disposition must be:to an arm's-length person; ordeemed to have occurred under subsection 50(1)."2. Could ABIL be deducted with an optional amount? For example, I had other source of income of $70,000 in 2019 and ABIL of $100,000. Could I choose to deduct $50,000 in 2019 and carry forward the other $50,000? Thanks!Ryan Li

Level 2

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ABIL Interpretation

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1. As the sole shareholder of the business, is a dissolution of my CCPC be treated as share disposed at Arm's-length?

S4-F8-C1. Article 1.12,

"For a loss described in ¶1.11 to qualify as a business investment loss, the disposition must be:

to an arm's-length person; or
deemed to have occurred under subsection 50(1)."

2. Could ABIL be deducted with an optional amount? For example, I had other source of income of $70,000 in 2019 and ABIL of $100,000. Could I choose to deduct $50,000 in 2019 and carry forward the other $50,000?

Thanks!

Ryan Li

ProFile (Canada)

This topic has been closed for replies.

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DCA2Answer

Level 3

1. Subsection 50(1)(b) should negate the requirement for arms length. It only requires that shares be owned in an insolvent corporation. 2. I don't see why not, but the amount not claimed would be carried forward as a non-capital loss. To me, a more interesting question is the valuation used to determine the ABIL in the first place.

D

DCA2Answer

Level 3

1. Subsection 50(1)(b) should negate the requirement for arms length. It only requires that shares be owned in an insolvent corporation. 2. I don't see why not, but the amount not claimed would be carried forward as a non-capital loss. To me, a more interesting question is the valuation used to determine the ABIL in the first place.

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comptable0421Author

Level 2

Quality reply, clear and enlightening. Thank you!!!

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