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Hi Kam,
In this case, the family member is using the loan for a personal investment. The key question here is whether the loan is used for a purpose that is tied to the corporation’s business or personal activities. Since this loan is being used for a personal investment (not related to the business), the CRA is likely to view the loan as potentially being a personal benefit to the family member. The family member must include the amount of the loan in his/her income.
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