24 January 1991 Income Tax Severed Letter

19(1)                              5-903668
                                             B.G. Dodd
                                             (613) 952-1764

January 24, 1991

          19(1)

We are writing in reply to your letter dated December 10, 1990 concerning losses of investors in

          24(1)

You refer to the letter of December 21, 1989 which sets out the
Department's position on certain income tax issues affecting     
24(1)         investors. You note that while one section of the
Department's letter discusses the issue of losses, there is no
discussion of losses in the section dealing with             24(1) 
       investment contracts held in, or as, a registered retirement
savings plan ("RRSP").

There is no provision in the Income Tax Act which permits a deduction in respect of losses incurred in an RRSP. The income tax treatment is essentially that any amount received under an RRSP must be included in income. Should it happen that the total amount received from the RRSP is less than the total amount contributed, it is only the amount received which is included in income not the amount of the contributions made even though those contributions were fully deductible for tax purposes when made.

In the case of     24(1)        the Department has recently
received a submission from                 24(1)                  
                                  This is presently being
considered and we hope to be able to respond in the near future. 
It is our understanding that       24(1)    intends to advise note
holders accordingly.

We hope this will be of assistance to you.

Yours truly,

for Director Financial Industries Division Rulings Directorate

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