CRA appears to find that a payout of cash pursuant to an amalgamation agreement does not preclude satisfying s. 87(1)

Two individuals, Mr. A and Mr. B, wholly-own two corporations of equal value (A Inc. and B Inc.), which amalgamate. On the amalgamation, the two individuals, in addition to receiving equal numbers of shares of Amalco, also received an equal amount of cash from Amalco.

CRA explicitly stated that the payout of the cash (pursuant to the Amalgamation Agreement) would comply with s. 87(1)(c) (i.e., the predecessor shareholders received shares of Amalco) and implicitly appeared to accept (consistently with Envision) that this complied with s. 87(1)(a) (all the property of the predecessors became property of Amalco).

CRA went on to explain that the cash busted a rollover at the shareholder level that otherwise would have been available under s. 87(4).

Neal Armstrong. Summaries of 15 September 2017 External T.I. 2017-0696821E5 F under s. 87(1)(a) and s. 87(4).