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.
A. Seidel (613)957-8960
January 13, 1989
Dear Sirs:
This is in reply to your letter dated September 1, 1988 with respect to the definition of short-term preferred share within the meaning of subsection 248(1) of the Income Tax Act. We apologize for the delay.
Where at a particular time an agreement relating to a share of the capital stock of a corporation is entered into or modified the fair market value of the unissued share at the particular time, for purposes of clauses (a)(i)(A) or (e)(i)(A) of the above definition, is a determination of fact which can only be made with consideration to the specific circumstances. As a general comment it would seem that the fair market value of an issued share of the same class of capital stock of the corporation at the particular time would be representative of the fair market value of the authorized but unissued share.
While we hope our comments are of assistance to you they do not constitute an advance income tax ruling and therefore are not binding on the Department in respect of a specific situation.
Yours truly,
for Director Financial Industries Division Rulings Directorate
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© Her Majesty the Queen in Right of Canada, 1989
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© Sa Majesté la Reine du Chef du Canada, 1989
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