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.
REVENUE CANADA ROUND TABLECTF CONFERENCE NOVEMBER 1992
Question # 63
Section Ref.: DETERMINATION OF COST AMOUNT OF DEBT HELD BY WOUND-UP SUBSIDIARY
Take the case of a wholly-owned subsidiary corporation which, at the time it is wound up pursuant to subsection 88(1), holds as capital property a debt receivable the face amount of which exceeds its adjusted cost base to the subsidiary. For the purposes of subparagraph 88(1)(a)(iii), should the "cost amount" of the debt to the subsidiary be determined under paragraph (b) or under paragraph (e) of the definition of that expression in subsection 248(1)?
Department's Position
As indicated in paragraph 9 of Interpretation Bulletin IT-488R, it is our position that, for purposes of subparagraph 88(1)(a)(iii), the cost amount of a debt that is capital property to the subsidiary is determined under paragraph (b) of the definition of "cost amount" in subsection 248(1).
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