2009 Ruling 2009-0328831R3 - Standard butterfly

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

Principal Issues: Standard butterfly

Position: Rulings granted.

Reasons: The requirements of the act are met.

XXXXXXXXXX 								2009-032883

XXXXXXXXXX , 2009

Dear XXXXXXXXXX ,

Re: XXXXXXXXXX (B.N. XXXXXXXXXX , XXXXXXXXXX Tax Centre, XXXXXXXXXX TSO)

We are writing in response to your letter of XXXXXXXXXX , wherein you requested an advance income tax ruling on behalf of the above-referenced taxpayer. The documents submitted as part of your request are only part of this document to the extent described herein.

To the best of your knowledge and that of the above-referenced taxpayers, none of the issues involved in this ruling is:

(a) in an earlier return of the above-referenced taxpayers or a related person;
(b) being considered by a tax services office or taxation centre in connection with a previously filed tax return of the above-referenced taxpayers or a related person;
(c) under objection by the above-referenced taxpayers or a related person;
(d) before the courts; or
(e) the subject of a ruling previously issued by the Income Tax Rulings Directorate.

The above-referenced taxpayers have confirmed that the proposed transactions described herein will not affect their ability to pay any of their outstanding tax liabilities.

All statutory references herein are to provisions or parts of the Income Tax Act (Canada), R.S.C. 1985 (5th Supp.) c. 1, as amended to the date hereof (the "Act") and all references to monetary amounts are in Canadian dollars.

DEFINITIONS

In this letter, the following terms have the meanings specified:

"ACo" means XXXXXXXXXX . ACo is a taxable Canadian corporation and a Canadian-controlled private corporation that was incorporated XXXXXXXXXX under the Business Corporations Act (XXXXXXXXXX ). ACo carries on the business of XXXXXXXXXX . The taxation year of ACo ends on XXXXXXXXXX . ACo's address is XXXXXXXXXX . The authorized capital of ACo consists of the following: (i) XXXXXXXXXX class A common voting shares with a par value of $XXXXXXXXXX each; (ii) XXXXXXXXXX class B common non-voting shares with a par value of $XXXXXXXXXX each; (iii) XXXXXXXXXX class C common non-voting shares with no par value; (iv) XXXXXXXXXX class D preferred voting shares with a par value of $XXXXXXXXXX each; (v) XXXXXXXXXX class E preferred non-voting shares with a par value of $XXXXXXXXXX each; (vi) XXXXXXXXXX class F preferred non-voting shares with a par value of $XXXXXXXXXX each; (vii) XXXXXXXXXX class G preferred non-voting shares with a par value of $XXXXXXXXXX each; and (viii) XXXXXXXXXX class H preferred non-voting shares with a par value of $XXXXXXXXXX each;

"agreed amount" means the amount agreed in respect of a disposition of property pursuant to paragraph 85(1)(a);

"adjusted cost base" has the meaning assigned by section 54;

"agreed amount" means the amount agreed on by the transferor and transferee in respect of the transfer of an eligible property (as defined in subsection 85(1.1)) in a joint election filed pursuant to subsection 85(1);

"BCo" means XXXXXXXXXX .;

"Business Property" means all of the assets of ACo, other than Cash or Near-Cash Property, any income from which would, for the purposes of the Act, be income from the business of ACo (other than a specified investment business). The inventory of ACo will be considered to be Business Property (prior to reclassification of certain Cash or Near Cash Property as Business Property) to the extent that its disposition gives rise to business income. In determining the net fair market value of the Business Property, immediately before the transfer of half of ACo's property to Newco, (i) liabilities, other than current liabilities, that relate to a particular Business Property will be allocated to that property to the extent of its fair market value; (ii) liabilities that pertain to Business Property but not to a particular property will be allocated Business Property; (iii) deferred revenue, representing revenue received or receivable in the ordinary course of ACo's business, the recognition of which has been deferred due to the legal obligation of ACo to render services or deliver products from which such revenue was received, will be considered a liability only to the extent that it gives rise to a legal obligation to repay the amount should the services not be provided or the products not be delivered; (iv) any deferred charges, deferred taxes, and tax accounts will be ignored in determining the net fair market value of the Types of Property; (v) provided that the amount of Cash or Near-Cash Property exceeds ACo's current liabilities, the fair market value of all accounts receivable, inventory and prepaid expenses of ACo that will relate to the ACo's business and that will be collected or consumed in the ordinary course of ACo's business, net of allocated liabilities, will be reclassified as Business Property and the net fair market value thereof will be included in the net fair market value of the Business Property and will not be included in the net fair market value of the Cash or Near-Cash Property; (vi) any liabilities that remain after the allocation to Cash or Near-Cash Property and the allocations and reclassifications described above in this definition will be allocated to the Business Property based on the relative net fair market value of the Business Property prior to the allocation of such excess unallocated liabilities. To the extent that the liabilities allocated to Business Property exceed the total fair market value of the Business Property, ACo will be considered to have a negative amount of Business Property;

"Canadian-controlled private corporation" has the meaning assigned by subsection 125(7);

"capital property" has the meaning assigned by section 54;

"Cash or Near-Cash Property" means all the current assets of ACo, including: (i) cash; (ii) accounts receivable; (iii) inventory; (iv) income taxes recoverable; (v) prepaid expenses; and (vi) deposits and advances to related persons, shareholders of ACo or persons related to such shareholders that are due within the next 12 months or those with no fixed term of repayment. In determining the net fair market value of the Cash or Near-Cash Property, immediately before the transfer, (i) current liabilities will be allocated to a Cash or Near-Cash Property of ACo in the proportion that the net fair market value of each such property is of the fair market value of all its Cash or Near-Cash Property; (ii) deferred revenue, representing revenue received or receivable in the ordinary course of ACo's business, the recognition of which has been deferred due to the legal obligation of ACo to render services or deliver products from which such revenue was received, will be considered a liability only to the extent that it gives rise to a legal obligation to repay the amount should the services not be provided or the products not be delivered; (iii) any deferred charges, deferred taxes, and tax accounts will be ignored in determining the net fair market value of the Types of Property. Current liabilities will include accounts payable, accrued liabilities, amounts owing to shareholders, income taxes payable and the amount described in (ii) above in the current definition. All the liabilities of ACo are current liabilities. It is expected that the total current liabilities of ACo will not exceed the total fair market value of the Cash or Near-Cash Property (an excess would result in a negative amount of Cash or Near-Cash Property). Should any liabilities remain after the allocation to Cash or Near-Cash Property, such excess will be allocated to Business Property based on the relative net fair market value of the Business Property prior to the allocation of such excess;

"CDA" has the meaning assigned by subsection 89(1);

"Cost amount" has the meaning assigned by subsection 248(1);

"dividend rental arrangement" has the meaning assigned by subsection 248(1);

"eligible property" has the meaning assigned by subsection 85(1.1);

"fair market value" means the amount, expressed in money terms, that is the highest price available in an open and unrestricted market between informed and prudent parties dealing at arm's length;

"Investment Property" of an entity means all of the assets other than Cash or Near-Cash Property, any income from which would, for the purposes of the Act, be income from property or from a specified investment business of that entity. Any liabilities of that entity other than current liabilities or liabilities allocated to Business Property will be allocated to the Cash or Near-cash Property, Investment Property and Business Property of that entity, based on the relative net fair market value of each Type of Property prior to the allocation of such excess unallocated liabilities but after the allocation of the other liabilities;

"Mr. A" means XXXXXXXXXX . Mr. A's social insurance number is XXXXXXXXXX . He resides at XXXXXXXXXX Mr. A is serviced by the XXXXXXXXXX tax services office;

"Mr. B" means XXXXXXXXXX . Mr. B's social insurance number is XXXXXXXXXX . He resides at XXXXXXXXXX Mr. B is serviced by the XXXXXXXXXX tax services office;

"Newco" means XXXXXXXXXX ., a taxable Canadian corporation and a Canadian-controlled private corporation to be incorporated pursuant to the Business Corporations Act (XXXXXXXXXX ) which will have a XXXXXXXXXX , taxation year-end. The authorized share capital of Newco will include (i) class A common shares; (ii) class G preferred shares which will not be convertible into any other shares, will not give right to stock dividends, will give right to non-cumulative dividends at a rate set by the Directors at the time the preferred shares are allotted, but not to exceed the prescribed rate of interest as set out under Regulation 4301(c) of the Act at the time the shares are issued and having a redemption amount that will be set by the directors at the time of issue and which will be equal to the difference between the fair market value of the property acquired for their issuance and the non-share consideration given by Newco for such property, but subject to adjustment if a dispute arises with the CRA as to the fair market value of the property transferred. A dividend may be declared on any class of share at the exclusion of any other class of share, common or preferred. All dividends will be restricted to an amount that will leave sufficient equity in the company to fully redeem any outstanding preferred shares; and (iii) class H preferred shares which will have terms similar to the terms of the class G preferred shares described herein;

"paid-up capital" has the meaning assigned by subsection 89(1);

"private corporation" has the meaning assigned by subsection 89(1); and

"Promissory note #1" means the non-interest bearing demand promissory note issued by Newco to ACo on the redemption of the class H preferred non-voting shares held by ACo as described in the proposed transactions;

"Promissory note #2" means the non-interest bearing demand promissory note issued by ACo on the purchase for cancellation of the class B common non-voting shares and class D preferred voting shares;

"refundable dividend tax on hand" has the meaning assigned by subsection 129(3);

"specified financial institution" has the meaning assigned by subsection 248(1);

"taxable Canadian corporation" has the meaning assigned by subsection 89(1); and

"Type of Property" means one of the following three (3) types of property into which ACo's property may be classified: (a) Cash or Near Cash Property; (b) Business Property; and (c) Investment Property. For greater certainty, any tax accounts, such as the balance of ACo's non-capital losses, refundable dividend tax on hand or CDA will not be considered as a Type of Property.

FACT

1) Mr. A and Mr. B both reside in Canada for the purposes of the Act.

2) Mr. A and Mr. B are brothers.

3) Mr. A and Mr. B each own XXXXXXXXXX Class B common non-voting common shares, XXXXXXXXXX class D preferred voting shares, and XXXXXXXXXX class G preferred non-voting shares of ACo as capital property.

4) Mr. B and Mr. A respectively subscribed for their XXXXXXXXXX Class B Common non-voting shares for cash consideration of $XXXXXXXXXX per share ($XXXXXXXXXX in aggregate) on XXXXXXXXXX

5) Mr. B and Mr. A respectively acquired their XXXXXXXXXX class D preferred voting shares and part of their class G preferred non-voting shares on XXXXXXXXXX , as follows:

a) Mr. B purchased XXXXXXXXXX class D preferred voting shares for $XXXXXXXXXX and XXXXXXXXXX class G preferred non-voting shares for $XXXXXXXXXX from XXXXXXXXXX ;

b) Mr. A purchased XXXXXXXXXX class D preferred voting shares for $XXXXXXXXXX and XXXXXXXXXX class G preferred non-voting shares for $XXXXXXXXXX from XXXXXXXXXX .

6) Mr. B and Mr. A each acquired an additional XXXXXXXXXX class G preferred non-voting shares as consideration for XXXXXXXXXX class B common non-voting shares of BCo on XXXXXXXXXX . The parties jointly elected pursuant to subsection 85(1) at an agreed amount of $XXXXXXXXXX .

7) The issued share capital of ACo consists of:

Shareholder
number and class of shares
Paid-up capital
Adjusted Cost Basis

Mr. A

XXXXXXXXXX
XXXXXXXXXX
XXXXXXXXXX

Mr. A

XXXXXXXXXX
XXXXXXXXXX
XXXXXXXXXX

Mr. A

XXXXXXXXXX
XXXXXXXXXX
XXXXXXXXXX

Mr. B

XXXXXXXXXX
XXXXXXXXXX
XXXXXXXXXX

Mr. B

XXXXXXXXXX
XXXXXXXXXX
XXXXXXXXXX

Mr. B

XXXXXXXXXX
XXXXXXXXXX
XXXXXXXXXX

8) XXXXXXXXXX

9) ACo currently has a CDA balance of $XXXXXXXXXX and a refundable dividend tax on hand account balance of $XXXXXXXXXX . To the extent that ACo does have a positive CDA balance immediately prior to the proposed transactions, ACo will declare and pay separate dividends to each shareholder of an aggregate amount that will not be greater than such CDA balance. ACo will elect under subsection 83(2) in a prescribed manner and prescribed form.

ADDITIONAL INFORMATION

No property has or will become property of ACo and no liabilities have been or will be incurred or discharged by ACo in contemplation of and before the proposed transactions, except as described in the proposed transactions.

Except as described in this letter, none of Mr. A or Mr. B will dispose of any shares of ACo or Newco as part of the series of transaction or events that includes the proposed transactions.

Neither ACo nor Newco is, at any time during the series of transactions or events that includes the proposed transaction described herein, a specified financial institution, a restricted financial institution or a corporation described in any of paragraphs (a) to (f) of the definition of "financial intermediary corporation" in subsection 191(1).

None of the shares of ACo or Newco is or will be, at any time during the series of transactions or events that includes the proposed transactions:

a) the subject of any undertaking or agreement that is a guarantee agreement, within the meaning referred to in subsection 112(2.2);

b) the subject of a dividend rental arrangement;

c) the subject of any secured undertaking of the type described in paragraph 112(2.4)(a); or

d) issued for consideration that is or includes:

(i) an obligation of the type described in subparagraph 112(2.4)(b)(i), other than an obligation of a corporation that is related (otherwise than by reason of a right referred to in paragraph 251(5)(b));

(ii) any right of the type described in subparagraph 112(2.4)(b)(ii) held on condition that it or property substituted therefore may revert or pass to Profitco or a person to be determined by Profitco; or

e) issued or acquired as part of a transaction or event or series of transactions or events of the type described in subsection 112(2.5).

Each of ACo and Newco will have the financial capacity to honor, upon presentation for payment, the amount payable under the promissory note issued by it as part of the proposed transactions.

Neither ACo nor Newco has any expectation or intention of disposing of any property owned by it, as part of a series of transactions or events that includes the proposed transactions, to a person to whom it is not related or to a partnership, subsequent to the proposed transactions, other than in the ordinary course of such corporation's business.

PROPOSED TRANSACTIONS

The proposed transactions will occur in the order presented unless otherwise indicated, with the exception of filing the applicable election forms, which will be filed within the applicable due dates following the completion of the proposed transactions.

10) Mr. A will subscribe for XXXXXXXXXX class A voting common shares of Newco. Mr. A will open a bank account for Newco and deposit the $XXXXXXXXXX paid for Class A voting shares into that account.

11) The assets of ACo will be classified into the three Types of Property. For the purposes of determining the fair market value of each Type of Property, no amount will be considered to be a liability of ACo unless it represents a true legal liability that is capable of quantification.

12) Mr. A will transfer his XXXXXXXXXX class B common non-voting shares, XXXXXXXXXX class D preferred voting shares and XXXXXXXXXX class G preferred non-voting shares of ACo to Newco for a purchase price equal to the aggregate fair market value of such shares. As consideration, Newco will issue XXXXXXXXXX class G preferred non-voting shares and XXXXXXXXXX class A common voting shares of Newco to Mr. A. The class G preferred shares will have a redemption amount of $XXXXXXXXXX to be set by the director at the time of their issuance.

13) Immediately following Mr. A's transfer of shares to Newco, Newco will receive from ACo property of each Type of Property owned by ACo and the aggregate net fair market value of the property of each Type of Property so received will be equal to or approximate the amount that is equal to the proportion of the net fair market value of all property of ACo of that Type of Property that:

a) the aggregate fair market value, immediately before the transfer of the property by ACo to to Newco, of all of the shares of ACo owned by Newco at that time;

is of

b) the aggregate fair market value, immediately before the transfer of the property by ACo to Newco, of all of the issued and outstanding shares of ACo at that time.

The expression "approximate" used above means that the discrepancy between the percentage of the net fair market value of all the property of each Type of Property which Newco will receive as compared what Newco would have received had Newco received its appropriate pro rata share (50%) of the net fair market value of all the property of that Type of Property will not exceed one percent.

As consideration for the transfer of the property of ACo, Newco will assume a pro rata portion of liabilities owing by ACo and will issue class H preferred non-voting shares, which will have an aggregate redemption amount and aggregate fair market value equal to the amount by which the aggregate fair market value of the property received by Newco from ACo exceeds the amount the liabilities of ACo assumed by Newco.

14) ACo will jointly elect with Newco in prescribed form and within the time allowed by subsection 85(6), to have the provisions of subsection 85(1) apply to the transfer of each property of ACo that is an eligible property transferred to Newco. The agreed amount in respect of each of the eligible properties transferred will be:

a) in the case of capital property (other than depreciable property of a prescribed class) and inventory, an amount equal to the lesser of the amounts described in subparagraphs 85(1)(c.1)(i) and (ii);

b) in the case of depreciable property of a prescribed class, an amount not less than the least of the amounts described in subparagraphs 85(1)(e)(i), (ii) and (iii); and

c) in respect of eligible capital property, an amount not less than the least of the amounts described in subparagraph 85(1)(d)(i), (ii) and (iii).

For purposes of the joint elections in this paragraph, the reference to the "undepreciated capital cost to the taxpayer of all of the property of that class immediately before the disposition" in subparagraph 85(1)(e)(i) shall be interpreted to mean that proportion of the undepreciated capital cost to ACo of all of the property of that class that the capital cost of the asset immediately before the disposition is of the capital cost of all of the property of the class before the disposition.

The amount added to the stated capital account for the class H preferred non-voting shares issued by Newco as partial consideration for the transferred property will be the maximum amount permitted to be added to the paid-up capital of the class H preferred non-voting shares having reference to subsection 85(2.1).

15) Immediately after receiving part of the property of ACo, Newco will redeem all the class H preferred non-voting shares held by ACo for their aggregate redemption amount and will issue Promissory note #1 to ACo. The principal amount and fair market value of Promissory note #1 will be equal to the aggregate redemption amount of the redeemed class H preferred non-voting shares.

16) ACo will redeem the XXXXXXXXXX class G preferred non-voting shares held by Newco, and will purchase for cancellation the XXXXXXXXXX class B common non-voting shares and XXXXXXXXXX class D preferred voting shares held by Newco. ACo will pay for the respective shares by issuing Promissory note #2 having a principal amount and fair market value equal to the aggregate fair market value of the XXXXXXXXXX class G preferred non-voting shares and XXXXXXXXXX class B common non-voting shares and XXXXXXXXXX class D preferred voting shares redeemed and purchased for cancellation.

17) The principal amount owing by Newco to ACo under Promissory note #1 will be set-off against the principal amount owning by ACo to Newco under Promissory note #2.

PURPOSE OF THE PROPOSED TRANSACTIONS

Mr. A and Mr. B wish to carry on separate businesses independent of one another. The proposed transactions will allow Mr. A and Mr. B to have direct and separate control over their pro-rata share of ACo's property so they can run their businesses independently.

RULINGS

Provided that the above statements of facts, proposed transactions and purpose of the proposed transactions thereof are accurate and constitute complete disclosure of all relevant facts and proposed transactions, our rulings are as follows:

A. Provided that the requisite joint elections are filed in prescribed form and within the prescribed time and subject to the application of subsection 69(11) and paragraph 85(1)(b), the provisions of subsection 85(1) will apply to the transfer by ACo to Newco of the transferred property described in paragraph 13 above with result that the agreed amount in respect of such property will be deemed pursuant to paragraph 85(1)(a) to be proceeds of disposition thereof to ACo and the cost thereof to Newco.

For greater certainty, the provisions of paragraph 85(1)(e.2) will not apply to the transfer described in Paragraph 13.

B. The redemption by Newco of the class H preferred non-voting shares referred to in Paragraph 15 will have the following results:

a) Newco will be deemed by paragraph 84(3)(a) to have paid and ACo will be deemed by paragraph 84(3)(b) to have received a dividend equal to the amount by which the amount paid on such redemption exceeds the paid-up capital of the class H preferred non-voting shares;

b) the amount of such deemed dividend will be excluded, pursuant to paragraph (j) of the definition of "proceeds of disposition" in section 54, in determining ACo's proceeds of disposition for the class H preferred non-voting shares;

c) ACo will be entitled, pursuant to subsection 112(1), to deduct the amount of such deemed dividend in computing its taxable income for the taxation year in which such dividend is deemed to be received and, for greater certainty, the provisions of subsections 112(2.1), (2.2), (2.3) or (2.4) will not apply to deny the deduction of such deemed dividend;

d) no taxes under Part IV.1 will be payable by ACo in respect of such deemed dividend;

e) no taxes under Part VI.1 will be payable by Newco in respect of such deemed dividend; and

f) no taxes under Part IV will be payable by ACo in respect of such deemed dividend, except to the extent that Newco is entitled to a dividend refund for its taxation year in which such dividend is paid.

C. The redemption by ACo of the class G preferred non-voting shares and the purchase for cancellation of the XXXXXXXXXX class B common non-voting shares and the XXXXXXXXXX class D preferred voting shares referred to in paragraph 16 above will have the following results:

a) ACo will be deemed by paragraph 84(3)(a) to have paid and Newco will be deemed by paragraph 84(3)(b) to have received a dividend equal to the aggregate of the amount by which the amount paid on such redemption of the class G preferred non-voting shares exceeds the paid-up capital of the redeemed shares and of the amount by which the amount paid on the respective purchase for cancellation of the XXXXXXXXXX class B common non-voting shares and the XXXXXXXXXX class D preferred voting shares exceeds the paid-up capital of the purchased and cancelled shares;

b) the amount of such excess in respect of the class G preferred non-voting shares will be excluded, pursuant to paragraph (j) of the definition of "proceeds of disposition" in section 54, in determining Newco's proceeds of disposition for the class G preferred non-voting shares;

c) the amount of such excess in respect of the class B common non-voting shares will be excluded, pursuant to paragraph (j) of the definition of "proceeds of disposition" in section 54, in determining Newco's proceeds of disposition for the class B common non-voting shares;

d) the amount of such excess in respect of the class D preferred voting shares will be excluded, pursuant to paragraph (j) of the definition of "proceeds of disposition" in section 54, in determining Newco's proceeds of disposition for the class D preferred voting shares;

e) Newco will be entitled, pursuant to subsection 112(1), to deduct the amount of the deemed dividends in computing its taxable income for the taxation year in which such dividends are deemed to be received and, for greater certainty, the provisions of subsections 112(2.1), (2.2), (2.3) or (2.4) will not apply to deny the deduction of such deemed dividends;

f) no taxes under Part IV.1 will be payable by Newco in respect of such deemed dividends;

g) no taxes under Part VI.1 will be payable by ACo in respect of such deemed dividends; and

h) no taxes under Part IV will be payable by Newco in respect of such deemed dividends, except to the extent that ACo is entitled to a dividend refund for its taxation year in which such dividends are paid.

D. Provided that, as part of the series of transactions or events that includes the proposed transactions, there is not:

a) a disposition of property in the circumstances described in subparagraph 55(3.1)(b)(i);

b) an acquisition of control in the circumstances described in subparagraph 55(3.1)(b)(ii);

c) an acquisition of any shares of ACo in contemplation of the distribution in the circumstances described in subparagraph 55(3.1)(b)(iii);

d) in respect of the taxable dividend described in Rulings B and C above, an acquisition of property in the circumstances described in paragraph 55(3.1)(c); or

e) in respect of the taxable dividends described in Ruling B above, an acquisition of property in the circumstances described in paragraph 55(3.1)(d);

which has not been described herein, then by virtue of paragraph 55(3)(b), subsection 55(2) will not apply to the taxable dividends referred to in rulings B and C above. For greater certainty, subsection 55(3.1) will not apply to deny the exemption under paragraph 55(3)(b).

E. The set-off and cancellation of Promissory note #1 against Promissory note #2 described in paragraph 17 above will not, in and of itself, give rise to a forgiven amount, and neither ACo nor Newco will realize a gain or incur any loss as a result of such set-off and cancellation.

F. Subsection 245(2) will not apply as a result of the proposed transactions, in and by themselves, to re-determine the tax consequences confirmed in the rulings given above.

These rulings are given subject to the limitations and qualifications set forth in Information Circular 70-6R5 issued on May 17, 2002, and are binding on the CRA, provided that the proposed transactions are completed not later than six months of the date of this letter.

The above rulings are based on the Act in its present form and do not take into account any proposed amendments to the Act, which if enacted, could have an effect on the rulings provided herein.

COMMENTS

Nothing in this ruling should be construed as implying that the CRA has agreed to or reviewed:

a) the determination of the amount of the ACB, paid-up capital or fair market value of any shares referred to herein; and

b) any tax consequences relating to the definitions, facts and proposed transactions described herein, other than those described in the rulings given above, including whether any subsequent transaction or event is or is not considered to be part of the series of transactions or events described herein.

Yours truly,

XXXXXXXXXX
Manager
Reorganizations and Resources Division
Corporate Reorganizations Section I
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch