ABIL Interpretation

comptable0421 · ‎August 06, 2020

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

DCA2 · ‎December 28, 2020

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.

View solution in original post

DCA2 · ‎December 28, 2020

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.

comptable0421 · ‎December 28, 2020

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

jessica0729 · ‎April 09, 2022

I have a similar question, although, I have entered the ABIL on the ABIL schedule - I want to carry it forward and not use in 2021, how do I carry it forward? Can you tell me where to put it? I've looked everywhere and am coming up empty

comptable0421 · ‎April 11, 2022

Hi, good day,

The software will automatically calculate the amount available for carryforward. The calculation process and result can be viewed in the schedule T1A, and the result will appear in the carryforward summary.

Thanks

Ryan