A taxpayer advanced $1,150,000 to her husband’s corporation, which, it turned out, couldn’t pay her back. She didn’t claim an ABIL in respect of the loan until 2007. The Minister, however, took the position that the corporation ceased doing business in 2004, which the taxpayer admitted was true. The result: no ABIL for you, taxpayer! The taxpayer needed to claim the ABIL at a time when the corporation had been carrying on business at any time in the previous 12 months. See McDowell v R, 2012 TCC 244 and the definition of “small business corporation” in subsection 248(1) of the Income Tax Act.
