Subsequent Year

"CRA also addressed the reference in B(c) to a reduction for amounts included in computing Canco’s income under s. 91(1) not only in the particular year but also in a subsequent year of Canco, provided that the amount could reasonably be attributed to interest on Loan 2 for the particular year. The following example may capture CRA’s point:\n\nIn Year 1, there are inclusions in computing Canco’s FAPI for $200 of interest on Loan 2 and $100 of term deposits interest. However, expenses on the term deposits for Year 1 reduce the net income therefrom to a loss of $50. As a result, the net FAPI of Canco, and therefore the reduction under B(c), is $150.\n\nIf, in Year 2, after the deduction of applicable expenses, there is $50 of interest income earned on the term deposits that is included in Canco’s FAPI for Year 2, Canco could include this amount as a further reduction in Year 1 under B(c) by amending its return for that year."