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.
950486
XXXXXXXXXX J. Teixeira
(613) 957-8953
April 24, 1995
Dear Sir:
Re: Exchanges of Property
Section 44 of the Income Tax Act1
This is in reply to your letters dated February 16 and March 31, 1995, wherein you requested our views on the application of subsection 44(1) to the disposition of
XXXXXXXXXX
It is our opinion that a shareholder of XXXXXXXXXX whose shares were acquired by XXXXXXXXXX pursuant to the provisions of section 188 of the OBCA would have received proceeds of disposition for his shares either as compensation for property taken under statutory authority or as the sale price of property sold to a person by whom notice of an intention to take it under statutory authority was given, such that the proceeds of disposition would be described in paragraph (d) of the definition "proceeds of disposition" in section 54.
Provided the common shares of XXXXXXXXXX were capital property to the shareholder, it is our opinion that the shareholder would be entitled to elect pursuant to the provisions of subsection 44(1) in respect of the disposition where the shareholder has, before the end of the second taxation year following the initial year, acquired a capital property as a replacement property for his former property and the replacement property has not been disposed of by him prior to the time he disposed of his former property. A share of a corporation listed on a prescribed stock exchange in Canada would ordinarily be a replacement property in this particular situation.
The foregoing comments are given in accordance with the practice referred to in paragraph 21 of IC 70-6R2 and are not binding on Revenue Canada.
Your truly,
for Director
Reorganizations and Foreign Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
1 All statutory references in this letter are to the Income Tax Act (Canada) R.S.C. 1985 (5th Supp.) C.1, as amended, consolidated to June 23, 1994.
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