Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
RULINGS DIRECTORATE
CORRESPONDENCE SUMMARY
Principal Issues:
Do sections 79 and 80 apply where a creditor has a right to sue a debtor for any shortfall where an asset is foreclosed?
Position TAKEN:
Rules in section 79 apply. Subsection 80 does not apply.
Reasons FOR POSITION TAKEN:
Section 79 and 80.
Nova Scotia Institute of Chartered Accountants' Taxation
Comittee - Round Table
Question 13 Foreclosure
What happens where a creditor has a right to sue a debtor for any shortfall when an asset is foreclosed? In this case, the debt is not extinguished on foreclosure and possibly section 80 might apply.
Department's position
Paragraph 80(1) of the Act does not apply where a debt is not settled nor extinguished; neither does it apply where section 79 is applicable in respect of a debt. Section 79 of the Act applies where a mortgagee or similar creditor acquires the beneficial ownership of a property in consequence of a failure of a mortgagor or other debtor to pay all or any part of an amount owed to the creditor. Interpretation bulletin IT-505 deals with the rules provided in section 79 of the Act.
R. Gagnon
5-940162
February 10, 1994
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