CRA illustrates s. 249(3), and accords s. 22 elections to Amalco

CRA has augmented its Folio on amalgamations.

It indicates, in an example, that if a predecessor with a calendar taxation year amalgamated on January 2, 2019, s. 249(3) would prevent the taxation year that otherwise would have ended on December 31, 2018 from being extended to January 1, 2019.

Notwithstanding no continuity rule in s. 87(2) to this effect, CRA will permit Amalco to make a s. 22 election respecting receivables generated by sales of a predecessor, provided that there was no disruption in the operation of the business between the time of the amalgamation and the business sale (and assuming the usual s. 22 conditions were satisfied).

Neal Armstrong. Additional summaries of Folio S4-F7-C1 under s. 249(3) and s. 22(1).