| 19(1) | File No. 5-9490 |
| B.G. Dodd | |
| (613) 957-9769 |
February 15, 1990
Dear 19(1)
We are writing in reply to your letter dated January 21, 1990 concerning 24(1)
24(1)
Again in general terms the Income Tax Act requires that accrued interest be included in the calculation of a taxpayer's income. If the taxpayer suffers a loss because such interest is not subsequently received the Income Tax Act provides various deductions, such as those in paragraph 20(1)(p) or subsection 20(21), to effectively mitigate the previous taxation of the interest. In other words the taxpayer is put in the same position he would have been in had he not included the accrued interest in income in a prior year.
The Income Tax Act does not contain any provisions which would permit a taxpayer, in addition to taking a deduction from income, to create a capital loss for interest or other income that is subsequently not received.
We hope the foregoing will be of assistance to you.
Yours truly,
for DirectorFinancial Industries DivisionRulings Directorate