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

Forum|Forum|5 years ago
August 7, 2020
1 reply
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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.

Best answer by DCA2

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.

C

comptable0421Author

Level 2

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

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