| 19(1) | File No. 5-9633 |
| R. Albert | |
| (613) 957-2098 |
March 22, 1990
Dear Sirs:
Re: Advance Income Tax Ruling Request
We are writing in reply to your letter of February 22, 1990 wherein you requested an advance income tax ruling regarding an allowable business investment loss ("ABIL") on behalf of investors in your corporation.
As noted in our previous correspondence to you dated February 5, 1990, we cannot consider your request for an advance tax ruling in a situation such as this where the matter on which the determination is requested is primarily one of fact. Determinations of fact are generally resolved at a District Office upon audit.
You should note that the ABIL provisions are relieving provisions directed at assisting taxpayers who have made legitimate investments and who have after a number of years come to realize that their investment has been lost. ABILs were not introduced into the Income Tax Act to operate as or to be promoted as a tax shelter. The general anti-avoidance rules which allow Revenue Canada to redetermine tax consequences when a transaction would otherwise result in a "tax benefit" may have application in a situation where a promoter has sold investments to be realized as ABILs over a very short time frame.
Yours truly,
for Director Business and General DivisionSpecialty Rulings DirectorateLegislative and Intergovernmental Affairs Branch