| December 5, 1990 | |
| Director | Current Amendments and |
| Special Audits Division | Regulations Division |
| W.R. McColm | |
| Attention: Sharon Gulliver | 957-2068 |
| Tax Avoidance Section | |
| F-3973 |
In-House Loss Utilization
This is in reply to your memorandum of November 5, 1990 concerning the above subject matter.
In your memo you asked for comment from a policy perspective on the two examples described. In example 2 the taxpayer corporation utilizes non-capital losses carried forward (that are about to expire) by transferring capital property to a subsidiary created for the purpose and recognizing the appropriate amount of accrued gains therein. This is followed shortly thereafter by an amalgamation (or wind-up) of the parent and the subsidiary.
21(1)(b)
Your second example would not seem to fit into this category and, therefore, falls within the stated lenient policy of Finance in respect of in-house loss transfers.
21(1)(b)
Please contact us if we can be of further assistance.
R. D'AurelioDirectorCurrent Amendments and Regulations Division
c.c. Al ShortDepartment of Finance