When a business ceases to operate and its accounts receivable are disposed of with the other business assets, any loss on the receivables will be treated as a capital loss unless a joint election is made by the purchaser and seller.

Question

Quizplus · Accepted Answer

This is true according to the Canadian Income Tax Act. If the purchaser and seller make a joint election, the loss can be treated as an allowable business investment loss instead.

When a Business Ceases to Operate and Its Accounts Receivable