29 January 1990 Ruling 59283 F - Dividend Refund to Private Corporation in the Case of Non-Arm's Length Sale of Shares

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.

January 29, 1990

19(1)

Re:  Paragraph 84.1(1)(b) and subparagraph 129(1)(a)(i) of the Income Tax Act (the "Act")

We are writing in response to your letter of December 15, 1989 in which you requested our views concerning the question of whether a deemed dividend under paragraph 84.1(1)(b) is considered to be a taxable dividend for the purposes of subparagraph 129(1)(a)(i) of the Act.

In our view, a deemed dividend under paragraph 84.1(1)(b) would be considered to be a taxable dividend paid for the purposes of subparagraph 129(1)(a)(i) of the Act, provided that subsection 129(1.2) was not applicable.

In accordance with paragraph 24 of Information Circular 70-6R, the comments expressed herein do not constitute an advance income tax ruling and consequently are not binding on Revenue Canada, Taxation.

Yours truly,

for DirectorFinancial Industries DivisionRulings Directorate