Opco made an excessive eligible dividend designation in respect of two dividends of $200 each paid by it in its 2020 taxation year (the “2020 Loss Year”). In its Part III.1 return for the 2020 Loss Year, only one of the taxable dividends was reported due to a good faith error. The Part III.1 tax potentially would be reversed if CRA accepted a reversal of carrybacks of a loss to earlier years, thereby restoring Opco’s GRIP balance for the 2020 Loss Year. CRA stated:
Under subsections 152(3) and 185.2(2), an inaccurate or incomplete assessment would not affect Opco's liability for Part III.1 tax for the 2020 Loss Year. Opco would therefore be responsible for filing an amended Schedule 55 to report that the actual amount of taxable dividends paid in the 2020 Loss Year was $400 rather than $200, correcting the amount of the excessive eligible dividend designation for that year, if any - regardless of whether the original carrybacks of its NCLs were reversed - and paying the resulting Part III.1 tax, subject to the subsection 185.1(2) election.