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.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
942533
XXXXXXXXXX Cal Brown
October 27, 1994
Dear XXXXXXXXXX:
Re: Scientific Research and Experimental Development
As discussed by telephone we have reviewed your request with respect to the scientific research and experimental development expenditures which have not been deducted in a particular corporation. It is intended that this corporation be dissolved. However, because agreement has not been reached with certain creditors of this corporation, the corporation can not be dissolved at the present time. You have requested our views on whether these expenditures can be used in a new corporation that was incorporated to carry on the former business.
As we indicated in our telephone conversation of October 26, 1994, it was our conclusion, in consultation with our Corporate Reorganization Section, that under these circumstances the scientific research and experimental development expenditures are only available for use within the original corporation which currently continues to exist. There are no provisions within the Income Tax Act that would allow the scientific research and experimental development expenditures to be transferred to another taxpayer while the original corporation still exists. This treatment is normally considered appropriate since until the original corporation is actually dissolved, it is not known for certain that such expenditures will not be used by this corporation at some future time.
While it may be possible in the future to wind-up or amalgamate this original corporation in such a manner that the scientific research and experimental development expenditures may be utilized by a successor, this would depend on facts, at that time, concerning the dissolution of the original corporation.
We hope these comments will be of assistance.
Yours truly,
for Director
Manufacturing Industries,
Partnerships and Trusts Division
Rulings Directorate
Policy and Legislation Branch
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