2023 Ruling 2023-0973911R3 - Loss Consolidation Ruling -- summary under Payment & Receipt

CRA ruled on a triangular loss-shifting transaction between Lossco and its subsidiary, Profitco, under which Lossco used a daylight loan to make an interest-bearing loan (pursuant to the “IB Note”) to Profitco, who subscribed for preferred shares of its sister, “Numberco,” who made a non-interest-bearing loan to Lossco. There was to be one daylight loan whose proceeds would be circled four times as described above, before it was repaid.