You may be able to recover some of that loss as a tax reduction or refund.
What is an Allowable Business Investment Loss (ABIL)?
Canadian tax laws are purposefully designed to reduce the risk of loss of investments or loans involving small business corporations.
ABILs are deductible against all other incomes in certain applicable tax years.
Provided Canada Revenue Agency (CRA) has the proper proof and documentation of your loss and proper filing procedures are followed, the actual cash or tax saved could be 15% to 21% of the amount invested or loaned depending on your marginal income tax rates.
Recently, tax court case outcomes have been more favourable for taxpayers disputing CRA's denial of loss claims. The reasons for such success are subtle but provide for more arguments provided by TaxWatch to CRA for accepting your loss claim.
All you have to do is gather the information and documentation and TaxWatch will do the rest.
We are not saying that loss claims are easy and always successful but persistence is the key to success. Arbitrary denials by CRA are unacceptable to us.
Download our guide What You Need to Know About Successful ABIL Claims
If you have lost, or feel you will lose, money investing in or loaning money to a Small Business Corporation (including your own business) you may be able to recover some of that loss as a tax reduction or refund.