Principales Questions: Opco is a CCPC. Opco's regular taxation year-end is July 31. On December 26, 20-A, a public company ("Pubco") and Opco's shareholders would enter into a binding agreement by which Pubco would acquire, provided that some conditions are met, all of the issued and outstanding shares of the capital stock of Opco on January 1st, 20-B. By virtue of paragraph 251(5)b), Pubco would be deemed to control Opco as at December 26, 20-A for purposes of, among other things, the definition of CCPC in subsection 125(7). Subsection 249(3.1) would trigger a deemed year-end for Opco on December 26, 20-A, as it would cease to be a CPCC. Opco would also have a deemed year-end on December 31, 20-A under subsection 256(9) and 249(4) as its control would be acquired by Pubco on January 1st, 20-B. A) Whether Opco may elect under paragraph 249(4)(c) to have its taxation year otherwise ending on December 26, 20-A, deemed to end on December 31, 20-A. B) If so, would Opco be allowed to claim a small business deduction under subsection 125(1) for its taxation year ended on December 31, 20-A?
Position Adoptée: A) Yes; B) No.
Raisons: A) Meets the requirements of the law. B) Since Opco would not be a CCPC throughout the taxation year ended on December 31, 20-A.