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In a scenario when a corporation is in a capital loss carryover situation would the officers...

In a scenario when a corporation is in a capital loss carryover situation would the officers want to have the transaction treated as a capital gain? What do you think and why? Is it true that a corporation might want a different tax treatment?

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Answer #1

Capital loss can only be set off against capital gains. If the corporation have insufficient capital gains then the balance capital loss can be carried forward up to 8 years. If the corporation is in a capital loss carryover situation and if the corporation have capital gain in the current financial year then it would be advisable to set off the capital loss with the capital gains.

No the officers cannot treat the transaction of capital loss into capital gain. There is one rule for everyone. The corporation have to apply the standard rule regarding the tax treatment.

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