Open market repurchases by the issuer of US dollar notes may produce a better tax result than a tender offer

Where a Canadian issuer makes a tender offer for its notes, which have an accrued foreign exchange gain but which also trade at a substantial discount to their US dollar principal, the issuer will realize a capital loss under s. 39(2), and a forgiven amount which generally will offset other more valuable tax attributes rather than such loss. Contrast this with open market purchases of the same notes which might result in only a smaller capital gain under s. 39(3). This result depends in part on 2008-0302511I7, where CRA considered that s. 80 should not apply to an open-market purchase to which s. 39(3) applies

Neal Armstrong. Summary of Carrie Smit, "Repurchasing Underwater US Dollar Notes", International Tax (Wolters Kluwer), August 2015, No. 83 under s. 39(3).