CEBA Forgivable Portion of Loan Tax Treatment

There is a lot argument in the accounting community on Linked on as when the Forgivable Loan portion of 25% should be taxable. It is currently taxable when the loan is granted, not, when the conditions for forgiveness are met. CRA has released an answer that they view the forgivable portion of the CEBA loan as taxable in the year you received it.

S 12(1)(x) includes forgivable loans, not forgiven loans. What is the difference between the two, if we must meet all conditions and have the forgiveness be effective, before the loan is considered "forgivable".

However In case CRA changes its potion later I would recommend you speak to our clients about the filing position.

(1) include it in tax year CEBA was received;

(2) Don’t include it in the tax year CEBA was received, but include it in year that the 75% portion is paid off that triggers the forgiveness. Also, copy and save this email plus others for due diligence if CRA doesn’t change its position to avoid penalties

(3) Include it in year of receipt of CEBA and then file Notice of Objection on the basis that the forgivable portion did not arise until the tax year that the forgivable portion was repaid - hopefully in the meantime CRA changes its position to agree that the forgiveness did not occur until the 75% portion is paid off that triggered the forgiveness

(4) include it in tax year end of receipt of CEBA and then file T1 AdJ if CRA changes its position. But set a reminder to look at this again before the tax year goes statute barred or file a Waiver only on the CEBA amount being removed

https://www.linkedin.com/in/dorothy-kelt-52583246/detail/recent-activity/