Alex Klyguine reminds us that, if the CRA reassesses a year and the taxpayer wishes to dispute the reassessment, the taxpayer must be cautious about applying losses of other years to reduce the taxable income of the reassessed year. If the losses of other years are used to reduce taxable income to nil, the taxpayer will be prevented from disputing the reassessment. The taxpayer should leave enough taxable income in the year to ensure that more than $2.00 of federal tax is left payable. See Nottawasaga Inn Ltd. v R, 2013 TCC 377. Alex Klyguine, “CRA Reassessments: The Trap in Eliminating the Extra Tax by a Loss Carryback” Canadian Tax Focus 4:4 (November 2014).
