P.K. Tang (613) 593-6201
December 23, 1980
Dear Sirs:
In reply to your letter of November 18, 1980 concerning the treatment of capital loss in calculating the capital dividend account balance under paragraph 89(1)(b) of the Income Tax Act, we confirm that it is our opinion that the amount of capital loss used in the calculation is the capital loss as modified by the application of subsection 112(3) of the Act.
We trust the above will be of satisfactory to you.
Yours truly,
ORIGINAL SIGNED BY ORIGINAL SIGNÉ PAR D.B. MORPHY
for Director Corporate Rulings Division Corporate Rulings Directorate Legislation Branch
PKT/mj