CTF - 1990 Conference Report
24(1)
LOSS CLAIMS FOR SHARES OF INSOLVENT CORPORATIONS
QUESTION
In reference to 50(1)(b)(iii) relating to loss claims for shares of insolvent corporations, could you please clarify whether the use of the word insolvent refers to the legal usage in the Winding-up Act (as indicated in 50(1)(b)(ii)) or is this a more general test?
ANSWER
The meaning of insolvent in subparagraph 50(1)(b)(iii) of the Income Tax Act (the "Act") is the ordinary dictionary meaning: "unable to pay one's debt's". The definition given in the Winding-up Act as referred to in subparagraph 50(1)(b)(ii) of the Act, is an extended definition the use of which would not be appropriate for purposes of 50(1)(b)(iii).
24(1)
November 1990L. HollowaySection 23