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.
CTF - 1990 Conference Report
QUESTION I-26
QUALIFIED SMALL BUSINESS CORPORATION
The definition of a "qualified small business corporation share" requires, inter alia, that throughout the 24 months immediately preceding the determination time, more than 50% of the fair market value of the corporation's assets be attributable to "assets used in an active business carried on ... by the corporation".
Assume a corporation purchased vacant land, obtained necessary zoning and planning clearances and, in due course, built head office premises on the land and then occupied them, occupancy occurring approximately 24 months after acquisition of the land.
Would the land and building be considered to have been "used in an active business" from the date of acquisition to the date of occupancy?
ANSWER
The Department is of the opinion that, where land is acquired and a building is constructed for use in an active business which will be expanding or relocating to the new facility, and the new facility is in fact used in the active business within a reasonable period of time after completion and not for any other purpose, the land and building in question would be considered to have been used in an active business from the date of acquisition to the date of occupancy.
CTFNovember 1990R. MundellSection 23
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