Principal Issues: Whether transferring the business of the income trust's corporate subsidiary to partnerships on a rollover basis using section 85, 97(2) and 132.2 meets the requirements of the Act and is within policy. Before the proposed transactions, the trust owns notes and shares of the corporate subsidiary that holds the shares of the corporations carrying on a business. At the end of the proposed transactions, it owns a limited partnership and shares of the general partners of partnerships that carry on the business.
Position: The proposed transactions meet the requirement of the Act and rulings on the various rollover provisions and section 245 are granted.
Reasons: The provisions of the Act; the trustees of the trust do not form the majority of the directors of the corporate general partner.