Allowable Business Investment Losses (ABIL)

A business investment loss results from the actual or deemed disposition of certain capital properties, including a share of a small business corporation or a debt owed to you by a small business corporation.

You may also have such a loss if you are deemed to have disposed of, for nil proceeds of disposition, a debt or a share of a small business corporation. For a loss to be claimed in this situation a small business corporation must owe you a debt (other than debt from the sale of personal-use property) that is considered to be bad debt at the end of the year. Also, if at the end of the year you own a share of a small business corporation that has gone bankrupt, is insolvent, or the individual that you do not deal with at arm’s length will be deemed to have realized an offsetting capital gain, then you may also qualify for an Allowable Business Investment Loss. The majority of ABIL claims are from people who had an outstanding shareholder loan in their corporation when it closed. If you think you may have an ABIL from prior years or have one coming up please do come and speak with us!