Hopefully you haven’t, but maybe you’ve had a loss on one of your allowable business investments. An allowable business investment is any investment in a private Canadian corporation that is

a “small business” corporation that:

a)    carries out 90% of its business on Canadian soil, and;
b)    existed 12 months before the disposition of the investment

While capital losses can only be used to reduce capital gains, you can use 50% of an “allowable business investment loss” to reduce all other types of income. 

Do note that the disposition cannot be with a person you are in an arm’s length relationship with, ie, a family member.

Have questions? Give us a call at 905-571-2665.