15 July 2009 External T.I. 2008-0289731E5 - Forgiveness of Accrued Interest -- summary under Excluded Obligation

In response to a question whether s. 80 would apply where a creditor waived the right to receive accrued and payable interest on a debt, the Directorate indicated that where the forgiven interest amount is determined to be on account of capital, s. 80 is applicable irrespective of whether or not the amount was forgiven in the same or subsequent taxation year.