CRA finds that a land developer can bump the cost amount of land (for use by it as land inventory) which was held by a target as capital property when its control was acquired

Where a corporation engaged in a land development business acquires a corporation holding a parcel of land as capital property, CRA accepts that the cost of the land can be bumped under s. 88(1)(d) if the target corporation is wound-up, even if the land will be acquired by the developer as inventory and even if the wind-up occurs several years later. The posited facts and CRA analysis stipulated that the land was capital property to the target at the time of the acquisition of its control rather than at the time of the wind-up, which may suggest it would not be a concern for the land to have been converted into inventory in the hands of the target after its acquisition and before its wind-up.

Neal Armstrong. Summary of 30 March 2016 T.I. 2016-0629701E5 Tr under s. 88(1)(d).