| 19(1) | File No. 5-9797 |
| C.R. Brown | |
| 957-2082 |
May 24, 1990
19(1)
This is in reply to your letter of March 19, 1990 concerning a business investment loss. We apologize for the delay in replying.
24(1)
There is not sufficient information to provide a definite answer to your question. However, we are providing copies of IT-484R, Business Investment Losses and IT-239R2 (see paragraph 6) which explains losses from loaning funds to a corporation.
Generally, if you were obligated to pay an amount owed by a small business corporation, and that corporation was still in existence at the time, the corporation is considered to have incurred a debt to you for the amount paid. If the corporation later winds-up without paying the debt or if it is established that the debt is uncollectible you could be entitled to claim a loss. The enclosed bulletins explains the requirements that must be met.
We trust this information will allow you to determine if you may claim a business investment loss.
Yours sincerely,
for DirectorBusiness and General DivisionSpecialty Rulings DirectorateLegislative and Intergovernmental Affairs Branch