Regarding when a mooted small business corporation, which had ceased its restaurant operations in 20X1, but sued the franchisor at the same time with that suit being dismissed in 20X6, ceased to carry on its active business, CRA stated:
Following [Poulin], we accept … that an amount for damages may be deducted in a year in which a taxpayer no longer carries on business, since the taxpayer is presumed not to have ceased carrying on business for as long as the taxpayer is engaged in carrying through on acts committed to by the taxpayer in the course of the business, even if, at the time the amount is deducted, the taxpayer is no longer transacting and can no longer attend to the taxpayer’s customers.