4. Where one business operation succeeds another the following comments may be of assistance in determining if the two businesses are the same business:
(a) where the succeeding business operation is not the same kind as the former, the two operations will be viewed as different businesses at the different times and no other factors will operate to change that view;
(b) where a business operation ceases or is disposed of and following this the same taxpayer acquires another business operation of the same kind, the two business operations will normally be considered to be the same business if the second business operation is purchased on or around the same time that the first operation is disposed of or it can be established that a second operation was contemplated at the time of disposition of the first operation;
(c) where the succeeding business operation of a corporation is of the same kind, but ownership of the corporation has changed, the two operations will normally not be considered the same business if the first business ceases operation before the second operation begins. Whether a business ceases is dependent upon factors such as the following:
(i) the sale of all inventory,
(ii) dismissal of all employees,
(iii) vacation of business premises.
The sale of all fixed assets of a business is not considered a mandatory requirement for the ceasing of a business if it can otherwise be established to have ceased.
5. When determining whether business operations are of the same kind, the principal factor to be considered is the type of business that a taxpayer is in. It is not essential that the same inventory or machinery and equipment be used in the two operations. Factors, such as a change in name or a change in location of a business are not, in themselves, material when determining whether business operations are the same kind. Comprehensive rules on when business operations are of the same kind are not possible, but the following are examples:
(a) the operation of hotels, motels and lodging houses, even though the facilities and services offered may vary widely;
(b) the operation of retail drug stores, whether or not each has a prescription service, a lunch counter, or an extended line of non-drug goods;
(c) those activities that come within the definition of "farming" in subsection 248(1) even though they are dissimilar or are conducted in different places;
(d) those activities that come within the definition of "fishing" in subsection 248(1) even though they may be conducted seasonally at widely separated fishing grounds.