I am filing the final T2 for a company, company has a balance Due to shareholder of 8,000 and negative retained earnings of $8,000, for accounting purposes the forgiven amount was included as other income in GIFI, but deducted in S1 net income for tax as the amount would not be taxable under S80 as it is a non-commercial loan that was forgiven (non interest Bearing). I had to include as other income on GIFI to close out opening retained earnings of -8000.
Would Section 80.3 apply in this case, and would the amount need to be applied to previous losses with the difference included in income ? or is how I treated the forgiveness of the shareholder loan correct ?