XXXX
K.H. Major 613-995-1178
December 4, 1981
Dear XXXX
This is in reply to your letter of November 12, 1981 concerning the computation of an allowable business investment loss.
Paragraph 6 of Interpretation Bulletin IT-239R2 dated February 9, 1981 deals with the Departmental practice concerning capital losses on loans and guarantees by a shareholder of a Canadian corporation. Provided that the conditions of paragraph 39(1)(c) of the Income Tax Act (the Act) are met, it is our opinion that any loss on a loan or guarantee which satisfies the conditions described in paragraph 6 would also be treated as part of a taxpayer's business investment loss for the purpose of computing his allowable business investment loss under paragraph 38(c) of the Act.
We trust this information will be of assistance to you.
Yours truly,
ORIGINAL SIGNED BY ORIGINAL SIGNÉ PAR
for Director Specialty Corporations Rulings Division
Corporate Rulings Directorate Legislation Branch
39(1)(c)