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.
This is in reply to your letter of January 24 concerning the deductibility for income tax purposes of prepaid expenses by a corporation formed by an amalgamation where the expenses in question were paid by a predecessor corporation.
It is our view that expenses paid by a predecessor corporation which have been accounted for by it as prepaid expenses (as outlined in Interpretation Bulletin IT-417) will be considered to be prepaid expenses of the amalgamated corporation This view is predicated on the amalgamation constituting an amalgamation within the meaning of subsection 87(1) of the Act.
We trust these comments will be of assistance to you.
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