| October 11, 1990 | |
| Mr. Keith Hillier, Director | Business and General |
| Non-Resident Taxation Division | Division |
| A. Humenuk | |
| (613) 957-2135 | |
| Attention: Mr. J. Hartwick, Chief | |
| Assessing Programs | 901379 |
SUBJECT: 19(1) Calculation of Non-Capital loss
As agreed yesterday by telephone (Weil/Hartwick), we are transferring the attached Minister's correspondence file (YS# 90150021) concerning the above taxpayer to you for reply and reassessment (if necessary) of his returns for 1986, 1987 and 1988.
As you know, this file was previously transferred to us from your division on June 27 for an opinion on a technical question relating to the calculation of 24(1). We apologize for the delay in rendering this opinion which resulted from consultations with our legal advisors and Current Amendments Division.
We are now able to advise you that 24(1)
As discussed with you, we have two concerns with the facts in this case, which we draw to your attention for whatever action you consider necessary:
1) 24(1)
What circumstances changed in 1989 which would warrant a change in the method of reporting 24(1) to that of an income account based reporting.
2) 24(1)
If he was a non-resident for 1989, his losses for the period while non- resident could not be carried back (see IT-262). We would not accept the view that the trading of publicly-held securities by a non-resident through a broker in Canada constitutes a business with a permanent establishment in Canada within the meaning of section 253 of the Act.
If we can be of any further assistance to you in this matter, please contact us.
B.W. DathDirectorBusiness and General DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch