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.
SUMMARY: Tax Executives Institute—1996 annual conference—Revenue Canada Round Table—Change in control—loss company
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.
Revenue Canada Roundtable Tax Executives Institute 1996 Annual Conference
XIL. CHANGE OF CONTROL - LOSS COMPANY
Assume that A contributes property with a fair value at the time of contribution significantly in excess of its adjusted cost base to B Company, a loss corporation, in exchange for shares in B Company pursuant to section 85. Prior to three years' elapsing, C acquires control of B Company in an independent, unrelated transaction and B Company elects under paragraph 111(4)(e) to revalue all of its properties (including the property originally contributed by A) to fair market value. Assume further that any gain arising to B Company on the deemed disposition of the contributed asset would be offset by B's loss. In such a case, although B Company continues to own the property, will the paragraph 111(4)(e) election be considered a disposition for purposes of applying subsection 69(11) to A?
Department's Response
A deemed disposition pursuant to paragraph 111(4)(e) would be considered to be a disposition for the purposes of subsection 69(11).
D.A. Palamar File #963915 5/12/96
All rights reserved. Permission is granted to electronically copy and to print in hard copy for internal use only. No part of this information may be reproduced, modified, transmitted or redistributed in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, or stored in a retrieval system for any purpose other than noted above (including sales), without prior written permission of Canada Revenue Agency, Ottawa, Ontario K1A 0L5
© Her Majesty the Queen in Right of Canada, 1996
Tous droits réservés. Il est permis de copier sous forme électronique ou d'imprimer pour un usage interne seulement. Toutefois, il est interdit de reproduire, de modifier, de transmettre ou de redistributer de l'information, sous quelque forme ou par quelque moyen que ce soit, de facon électronique, méchanique, photocopies ou autre, ou par stockage dans des systèmes d'extraction ou pour tout usage autre que ceux susmentionnés (incluant pour fin commerciale), sans l'autorisation écrite préalable de l'Agence du revenu du Canada, Ottawa, Ontario K1A 0L5.
© Sa Majesté la Reine du Chef du Canada, 1996
Email this Content