30 November 1996 Ruling 9722793 - DISTRESS PREFERRED SHARES - AMENDMENT

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.

Principal Issues:

Minor change to facts

Position:

Amendment to one ruling

Reasons:

Ghange to facts

XXXXXXXXXX							972279
XXXXXXXXXX

Attention: XXXXXXXXXX

XXXXXXXXXX, 1997

Dear Sirs:

Re: Advance Income Tax Ruling
XXXXXXXXXX

We are writing in response to your correspondence of XXXXXXXXXX wherein you had requested certain modifications to the advance income tax ruling issued to your firm on behalf of XXXXXXXXXX (our file 970917 on XXXXXXXXXX, 1997). We also acknowledge our telephone conversation with XXXXXXXXXX of your office with respect to this matter.

In accordance with your request, subparagraph 17(i) of the aforementioned income tax ruling is amended to read as follows:

Newco will be required, at the request of XXXXXXXXXX, to purchase all or some of the Newco Preferred Shares from XXXXXXXXXX for a purchase price equal to the Retraction Price of the Preferred Shares. The purchase price will be paid

(a) in cash or;

(b) by the reassignment of a corresponding portion of the Mortgage Loan by Newco to XXXXXXXXXX.

Accordingly, Ruling "H" of the aforementioned advance income tax ruling is amended to read as follows:

The "cost amount", within the meaning of that term in subsection 248(1) of the Act, to XXXXXXXXXX of a Mortgage Loan or portion thereof, as the particular case may be, which is acquired in circumstances described in paragraph 17 of the Proposed Transactions, will, immediately after such acquisition, be equal to the amount paid therefor.

As with the rulings initially provided, this ruling is given subject to the limitations and qualifications set out in Information Circular 70-6R3 issued by Revenue Canada on December 30, 1996 and is binding upon the Department provided that the proposed transactions are completed on or prior to XXXXXXXXXX. The rulings are based on the Act and the Income Tax Regulations in their present form and do not take into account the effects of any proposed amendments thereto.

Yours truly,

for Director
Financial Industries Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch