Hi , Anyone has the experience of making Election under subsection 12(2.2) of the ITA for CEBA Loan forgivable portion? ( To avoid the $10,000 income inclusion of the forgivable portion of the $40,000 CEBA Loan received in FY. 2020, by reducing expenses by up to the CEBA loan forgivable portion of $10,000 accordingly in FY.2021). Appreciate any comments.
I have not. But, it seems like a more difficult way of accomplishing the same thing. Whether you recognize the forgivable portion as income or remove an equivalent amount of expenses, it’s the same increase of $10,000 to net (taxable) income. Maybe there are some situations where that makes a difference, but I haven’t encountered one with my clients.
Hi Nezzer, Thanks for your comment. No doubts about the increase of $10,000 to taxable income. Just not sure about the procedures of doing the election with CRA, or if any support documents required for it. 