17 November 2005 External T.I. 2005-0118101E5 F - Disposition réputée -- summary under Subparagraph 39(1)(c)(ii)

In finding that a capital loss arising under to s. 128.1(4)(b) could not be a business investment loss (BIL), CRA stated:

Taking into account the wording of paragraphs 128.1(4)(b) and 128.1(4)(c), we are of the view that a capital loss resulting from the application of paragraph 128.1(4)(b) is not a capital loss resulting from the disposition of a property to a person with whom the taxpayer was dealing at arm's length.