2020 Ruling 2020-0843991R3 - Single Wing Split-Up Farm Butterfly

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.

PRINCIPAL ISSUES: Whether the proposed single-wing split-up butterfly reorganization meets the requirements of paragraph 55(3)(b)

POSITION: Yes

REASONS: See discussion of issues herein

XXXXXXXXXX

2020-084399

XXXXXXXXXX 2020

RE: Advance Income Tax Ruling
XXXXXXXXXX

This is in reply to your letter dated XXXXXXXXXX, updated on XXXXXXXXXX, in which you requested an advance income tax ruling on behalf of the above-noted taxpayer. We also acknowledge the additional information provided in your letters and in various email correspondence as well as information provided in our telephone conversations (XXXXXXXXXX).

PRELIMINARY MATTERS

To the best of your knowledge, and that of the responsible officers of the above-noted taxpayers, none of the proposed transactions or issues involved in this ruling request are the same as or substantially similar to transactions or issues that are:

(a) in a previously filed tax return of any of the above-noted taxpayers or a related person and:

i. being considered by the CRA in connection with such return;

ii. under objection by any of the above-noted taxpayers or a related person;

or

iii. the subject of a current or completed court process involving any of the above-noted taxpayers or a related person; or

(b) the subject of a ruling request previously considered by the Income Tax Rulings Directorate.

Unless otherwise stated, all references herein to a part, section, subsection, paragraph, subparagraph, clause or subclause is a reference to the relevant provision of the Income Tax Act, R.S.C. 1985 (5th Suppl.) c.1, as amended (the “Act”), or the Income Tax Regulations, C.R.C., c.945 (the “Regulations”), as appropriate, and all references to monetary amounts are in Canadian dollars.

DEFINITIONS

In this ruling application, unless otherwise specified, the following terms have the meanings specified below:

“ACB” means “adjusted cost base” as that expression is defined in section 54 and subsection 248(1);

“Act1” means XXXXXXXXXX;

“agreed amount” means the amount that a transferor and a transferee have agreed on in a joint election under subsection 85(1) in respect of the transfer of an eligible property”;

“capital dividend” means a dividend to which subsection 83(2) applies;

“capital property” has the meaning assigned by section 54 and subsection 248(1);

“CCPC” means “Canadian-controlled private corporation” as that expression is defined in subsection 125(7);

“CDA” means “capital dividend account” as that expression is defined in subsection 89(1);

“cost amount” has the meaning assigned by subsection 248(1);“DC” XXXXXXXXXX, a corporation existing under Act1;

“DC Redemption Note” means the non-interest bearing demand promissory note issued by DC to TC on the purchase for cancellation of the XXXXXXXXXX common voting shares and XXXXXXXXXX preferred non-voting shares held by TC, as described in Paragraph 0;

“distribution” has the meaning assigned by subsection 55(1);

“dividend rental agreement” has the meaning assigned by subsection 248(1);

“eligible property” has the meaning assigned by subsection 85(1.1);

“ERDTOH” means “eligible refundable dividend tax on hand” and has the meaning assigned to that term by subsection 129(4);

XXXXXXXXXX

“FMV” means fair market value, being the highest price available in an open and unrestricted market between informed prudent parties acting at arm’s length and without compulsion to act, expressed in terms of money;

“Mr. A” means XXXXXXXXXX, an individual who is resident in Canada for the purposes of the Act;

“Mr. B” means XXXXXXXXXX, an individual who is resident in Canada for the purposes of the Act;

“NERDTOH” means “non-eligible refundable dividend tax on hand” and has the meaning assigned to that term by subsection 129(4);

“New Loan” means the new long-term loan advanced by XXXXXXXXXX to DC, which will be secured by XXXXXXXXXX that will remain with DC subsequent to the distribution to TC;

“Old Loan” means the current long-term loan advanced by XXXXXXXXXX to DC, which is secured by XXXXXXXXXX owned by DC that will be transferred to TC on the distribution;

“PUC” means “paid-up capital” and has the meaning assigned to that term by subsection 89(1);

“Paragraph” means a numbered paragraph in this letter;

“proceeds of disposition” has the meaning assigned by section 54;

“private corporation” has the meaning assigned by subsection 89(1);

“Proposed Transactions” means the proposed transactions described in Paragraphs 0-0;

“RDTOH” means “refundable dividend tax on hand” as that expression is defined in former subsection 129(3);

“specified financial institution” has the meaning assigned by subsection 248(1);

“TC” means XXXXXXXXXX, a corporation existing under Act1;

“TCC” means “taxable Canadian corporation” and has the meaning assigned by subsection 89(1);

“TC Redemption Note” means the non-interest bearing demand promissory note issued by TC to DC on the redemption of the XXXXXXXXXX preferred non-voting shares held by DC, as described in Paragraph 0; and

“UCC” means “undepreciated capital cost” as that term is defined in subsection 13(21).

FACTS

Facts Relating to DC

1. DC is a corporation that was incorporated on XXXXXXXXXX under Act1. DC is a TCC and a CCPC.

2. DC carries on the business of grain farming XXXXXXXXXX. DC files its tax returns with the XXXXXXXXXX Tax Centre and is served by the XXXXXXXXXX Tax Services Office. DC’s taxation year and fiscal period end on XXXXXXXXXX and DC reports its income from its grain farming business for the tax purposes using the cash method.

3. DC’s authorized share capital consists of the following:

1. unlimited common voting shares; and
2. unlimited preferred non-voting shares.

4. At the time of the Proposed Transactions, the issued and outstanding share capital of DC will be as follows:

5. As at XXXXXXXXXX, DC has an ERDTOH balance of $XXXXXXXXXX, a NERDTOH balance of nil and a GRIP balance of $XXXXXXXXXX. As at XXXXXXXXXX, DC has a CDA balance of $XXXXXXXXXX.

6. Mr. A and Mr. B are brothers. They both hold their shares of DC as capital property. Facts Relating to TC

7. TC is a corporation incorporated under Act1 on XXXXXXXXXX. TC is, and will be, at all relevant times, a TCC and a CCPC.

8. Currently, TC has no business operations. While it has not yet filed its nil tax returns for the XXXXXXXXXX and XXXXXXXXXX taxation years, it will do so with the XXXXXXXXXX Tax Centre and it is served by the XXXXXXXXXX Tax Services Office. The taxation year and fiscal period of TC ends on XXXXXXXXXX.

9. The authorized share capital of TC consists of the following:

1. unlimited Class A common voting shares
2. unlimited Class B common voting shares
3. unlimited Class C common non-voting shares
4. unlimited Class D common non-voting shares
5. unlimited Class E preferred voting shares
6. unlimited Class F preferred non-voting shares
7. unlimited Class G preferred non-voting shares

10. At the time of the Proposed Transactions, the issued share capital will be as follows:

11. As at the date of this letter, the balances in TC’s ERDTOH/NERDTOH, CDA and GRIP accounts were nil.

PROPOSED TRANSACTIONS

The Proposed Transactions will occur in the order presented unless otherwise indicated, with the exception of filing the applicable election forms, which will be filed within the applicable due dates following the completion of the Proposed Transactions.

Pre-Butterfly Transactions

12. DC will declare a dividend on its common shares and will make a capital dividend election pursuant to subsection 83(2) in respect of the full amount of the dividend. DC will issue to each of Mr. A and Mr. B a promissory note with a principal amount equal to the amount of capital dividend so received.

13. On XXXXXXXXXX, DC will reduce the PUC of the its preferred non-voting shares held by each of Mr. A and Mr. B to an amount equal to their ACB. Mr. A and Mr. B will receive from DC an amount of cash equal to the amount of the PUC reduction. Mr. A and Mr. B will both report a capital gain in their income tax returns and neither will claim a capital gains exemption pursuant to subsection 110.6(2).

The following chart shows the attributes of the issued and outstanding shares of DC immediately following the PUC reduction:

14. On XXXXXXXXXX, in preparation for the distribution, certain restructuring arrangements will be made in respect of the indebtedness of DC. The following arrangements will be made:

a. XXXXXXXXXX will advance the New Loan to DC, which will be secured by XXXXXXXXXX that will remain in DC following the distribution to TC;

and

b. DC will use the proceeds from the New Loan to repay the Old Loan.

For greater certainty, the principal amount of the New Loan will be equal to the principal amount of the Old Loan.

Single-Wing Split-Up Butterfly

15. Mr. B will transfer his XXXXXXXXXX common voting shares and XXXXXXXXXX preferred non-voting shares of DC to TC. Mr. B will jointly elect with TC in the prescribed form and within the time limit referred to in subsection 85(6) to have the provisions of subsection 85(1) apply to the transfer. The agreed amount will be an amount equal to the lesser of the amounts described in subparagraphs 85(1)(c.1)(i) and (ii). Consideration for the transfer of the common voting shares and the preferred non-voting shares of DC will consist solely of XXXXXXXXXX preferred non-voting shares in the capital stock of TC with a FMV and redemption amount equal to the aggregate FMV of the shares so transferred.

TC will add to the stated capital maintained for the XXXXXXXXXX preferred non-voting shares issued as a result of the Proposed Transactions an amount not exceeding the aggregate PUC of the shares of DC currently held by Mr. B. For greater certainty, the increase to the PUC of the XXXXXXXXXX preferred non-voting shares of TC will not exceed the maximum amount that could be added to the PUC of such share, having regard to subsection 84.1(1).

16. Immediately before the transfer of property described in Paragraph 0 below, the property owned by DC will be classified into the following three types of property for the purposes of distribution, as follows:

1. cash or near-cash property, comprised of all the current assets of DC, including cash, accounts receivable, inventory, income taxes recoverable, prepaid expenses and deposits and advances to related persons, shareholders of DC or persons related to such shareholders that are due within the next 12 months or have no fixed term of repayment, including for greater certainty, the XXXXXXXXXX;
2. investment property, comprising of all the assets of DC, other than cash or near-cash property, any income from which would, for the purposes of the Act, be income from property or from a specified investment business; and
3. business property, comprising of all the assets of DC, other than cash or near-cash property, any income from which would, for the purposes of the Act, be income from a business (other than a specified business), including for greater certainty, XXXXXXXXXX.

For greater certainty:

4. tax accounts or other tax related amounts of DC, such as the balance of non-capital losses, net capital losses, CDA, GRIP, ERDTOH/NERDTOH will not be considered property;
5. advances that are payable on demand or that are due within the next 12 months will be considered cash or near-cash property;
6. no amount will be considered a liability unless it represents a true legal liability capable of quantification;
7. the amount of any deferred tax will not be considered to be a property or a liability, as the case may be; and
8. any amount in respect of refunds of taxes, and interest thereon, actually receivable will be treated as cash or near-cash property and any potential refunds of taxes and interests thereon will, due to their contingent nature, be ignored.

17. In determining the net FMV of each type of property of DC immediately before the transfers described in Paragraph 18, the liabilities of DC will be allocated to, and deducted in the calculation of, the net FMV of each such type of property of DC in the following manner:

1. current liabilities of DC will be allocated to cash or near-cash property in the proportion that the FMV of such property is of the FMV of all cash or near-cash property. The total amount of DC’s current liabilities to be allocated to DC’s cash or near-cash property herein will not exceed the aggregate FMV of all the cash or near cash property of DC;
2. liabilities of DC, other than current liabilities, that relate to a particular property, will be allocated to that particular property (and effectively to the type of property to which the particular property belongs) to the extent of its FMV. Liabilities that pertain to a type of property, but not to a particular property, will then be allocated to that type of property, but not in excess of the net FMV of such type of property after the allocation of liabilities to a particular property, as described herein; and
3. any liabilities that remain after the allocations described in (a) and (b) are made will then be allocated among all types of property on the basis of the relative net FMV of each type of property immediately prior to the allocation of such excess, but after the allocation of liabilities as described in (a) and (b).

18. Immediately following the determination of the net FMV of the three types of property of DC as described above, DC will transfer to TC its pro rata portion of each type of property owned by it at that time such that immediately following such property transfer, the aggregate net FMV of each type of property of DC transferred to TC will be equal to or approximate the proportion determined by the formula: A x B/C

where:

A is the net FMV (determined as described above) immediately before the transfer, of all property of that type owned at that time by DC

B is the FMV, immediately before the transfer, of all the shares of the capital stock of DC owned, at that time, by TC1, TC2 or TC3, as the case may be; and

C is the FMV, immediately before the transfer, of all the issued and outstanding shares of the capital stock of DC.

For the purposes of this Paragraph, the expression “approximate the proportion” above means that the discrepancy of that proportion, if any, will not exceed one percent (1%), determined as a percentage of the net FMV of each type of property that TC has received on such transfer as compared to what TC would have received had it received its exact pro rata share of the net FMV of that type of property.

19. As consideration for the property transferred by DC to TC, TC will:

1. assume a pro rata portion of DC’s existing liabilities, as appropriate, such that TC will receive a proportionate share of the net FMV of each type of property owned by DC; and
2. issue XXXXXXXXXX preferred non-voting shares to DC which will have an aggregate redemption amount and FMV equal to the amount by which the aggregate FMV of such transferred property received by TC exceeds the amount of liabilities assumed by TC.

20. DC and TC will jointly elect under subsection 85(1) in prescribed form and within the time limits referred to in subsection 85(6) to have the provisions of subsection 85(1) apply to the transfer of each eligible property that is transferred by DC to TC. The agreed amount in respect of each eligible property so transferred will not be greater than the FMV of such property nor will it be less than the lesser of the FMV and the cost amount to DC of such property. For greater certainty, the aggregate of such agreed amounts will be greater than the aggregate amount of DC’s liabilities so assumed for such properties.

Specifically, the agreed amount under such election in respect of each eligible property so transferred will be within the limits prescribed as follows:

1. in the case of depreciable property of a prescribed class, an amount equal to the least of the amounts specified in subparagraphs 85(1)(e)(i), (ii) and (iii);
2. in the case of property described in paragraph 85(1)(c.1), an amount equal to the lesser of the amounts specified in subparagraphs 85(1)(c.1)(i) and (ii); and
3. in the case of farm inventory owned in connection with the farming business carried on by DC, an amount determined in accordance with the formula set out in paragraph 85(1)(c.2).

21. TC will add to its stated capital account for the XXXXXXXXXX preferred non-voting shares an amount equal to the aggregate of (a) the agreed amounts, in the case of each eligible property transferred to TC; and (b) the aggregate FMV, in the case of each property transferred to TC that is not an eligible property, less (c) the aggregate amount of DC’s liabilities assumed by TC as described in Paragraph 0. For greater certainty, the amount to be added to the stated capital account for TC’s XXXXXXXXXX preferred non-voting shares issued as partial consideration for the property transferred to it on the distribution will not exceed the maximum amount that could be added to the PUC of such shares without a reduction taking place pursuant to subsection 85(2.1).

22. Immediately after the distribution, TC will redeem its XXXXXXXXXX preferred non-voting shares held by DC for the aggregate redemption amount. As consideration, TC will issue the TC Redemption Note having a principal amount and FMV equal to the aggregate redemption amount and FMV of XXXXXXXXXX preferred shares so redeemed by it. DC will accept the TC Redemption Note as payment in full for the redemption of such shares.

23. Immediately following the share redemption described in Paragraph 0 above, DC will purchase for cancellation the XXXXXXXXXX common voting shares and XXXXXXXXXX preferred non-voting shares held by TC for an amount equal to the FMV of such shares. As consideration, DC will issue to TC the DC Redemption Note having a principal amount and FMV equal to the aggregate FMV of such shares purchased for cancellation. TC will accept the DC Redemption Note as payment in full for the shares so purchased for cancellation.

24. The DC Redemption Note will be set-off in full against the corresponding TC Redemption Note and such notes will be cancelled without payment.

ADDITIONAL INFORMATION

25. Except as described in this letter, no property has been or will be acquired, and no liabilities have been or will be incurred or paid by DC in contemplation of and before the Proposed Transactions, other than in a permitted transaction described in subparagraphs 55(3.1)(a)(i)-(iv).

26. There has not been and will not be, as part of a series of transactions or events that includes the Proposed Transactions, any disposition or acquisition of property in circumstances described in subparagraphs 55(3.1)(b)(i) or (iii), or an acquisition of control in the circumstances described in subparagraph 55(3.1)(b)(ii).

27. None of the property received by TC on the distribution described above in Paragraph 0 will be acquired by a person unrelated to the shareholders of DC, or by a partnership, as part of a series of transactions or events that includes the Proposed Transactions, in the circumstances described in paragraph 55(3.1)(c).

28. None of the property retained by DC after the distribution described above in Paragraph 0 will be acquired by a person unrelated to DC, or by a partnership, as part of a series of transactions or events that includes the Proposed Transactions, in the circumstances described in paragraph 55(3.1)(d).

29. None of the shares of any corporation described herein will be at any time during a series of transactions or events that includes the Proposed Transactions:

1. the subject of a guarantee agreement within the meaning of subsection 112(2.2);
2. the subject of a dividend rental agreement within the meaning of subsection 112(2.3);
3. the subject of any secured undertaking of the type described in paragraph 112(2.4)(a); or
4. a share that is issued or acquired as part of a transaction, event, or series of transactions or events of the type described in subsection 112(2.5).

30. None of the corporations described herein is or will be at any time during the series of transactions or events that includes the Proposed Transactions be a restricted financial institution or a specified financial institution as defined in subsection 248(1).

31. Each of DC and TC will have the financial capacity to honour, upon presentation for payment, the amount payable under the DC Redemption Note and the TC Redemption Note, as the case may be.

PURPOSES OF THE PROPOSED TRANSACTIONS

32. The purpose of the divisive reorganization is to allow Mr. A and Mr. B to have direct and separate control of their respective share of DC’s property, which will enable each of Mr. A and Mr. B and their respective immediate families to operate a farming business independently from each other.

33. The purpose of the payment of the pre-butterfly capital dividend by DC is to allow Mr. B to realize his share of the non-taxable portion of capital gains previously realized in DC while Mr. A and Mr. B are both still shareholders of DC.

34. The purpose of the reduction of PUC of the preferred non-voting shares of DC held by Mr. A and Mr. B is to reduce the PUC of such shares to an amount equal to the ACB, such that a capital gain is not realized on the redemption of DC shares held by TC as described in Paragraph 0.

RULINGS GIVEN

Provided that the above statements of Facts, Proposed Transactions, Additional Information and Purpose of the Proposed Transactions are accurate and constitute a complete disclosure of all relevant information, and provided that the Proposed Transactions are completed in the manner described above, our rulings are as follows:

A. Subject to the application of subsection 69(11), provided the appropriate joint elections are filed in the prescribed form and manner within the time limit specified in subsection 85(6), and provided each particular property so transferred is an eligible property in respect of which shares have been issued as full or partial consideration therefor, the provisions of subsection 85(1) will apply to:

1. the transfer by Mr. B to TC of his XXXXXXXXXX common voting shares and XXXXXXXXXX preferred non-voting shares of DC to TC as described in Paragraph 15; and
2. the transfer of each eligible property owned by DC to TC as described in Paragraph 18

such that the agreed amount in respect of each such transfer will be deemed pursuant to paragraph 85(1)(a) to be the transferor’s proceeds of disposition of the particular property and the transferee’s cost thereof.

For purposes of the joint elections, when determining the agreed amount of depreciable property in the course of the distribution, the reference in subparagraph 85(1)(e)(i) to “undepreciated capital cost to the taxpayer of all the property of that class immediately before the disposition” shall mean that proportion of the UCC to DC of all the property of that class immediately before the distribution that the FMV at that time of the property that is transferred is of the aggregate FMV of all the property of that class at that time.

For greater certainty, paragraph 85(1)(e.2) will not apply to the transfers referred to herein.

B. On the redemption by TC of its XXXXXXXXXX preferred non-voting shares held by DC as described in Paragraph 0, by virtue of paragraphs 84(3)(a) and (b), TC will be deemed to have paid and DC deemed to have received, a taxable dividend at that time equal to the amount, if any, by which the amount paid by TC on suchr edemption exceeds the PUC in respect of the XXXXXXXXXX preferred non-voting shares immediately before that time.

C. As a result of the purchase for cancellation by DC of the XXXXXXXXXX common voting shares and XXXXXXXXXX preferred non-voting shares held by TC as described in Paragraph 0 by virtue of subsection 84(3), DC will be deemed to have paid and TC will be deemed to have received, a taxable dividend at that time equal to the amount, if any, by which the amount paid by DC on such purchase for cancellation exceeds the aggregate PUC in respect of the XXXXXXXXXX common voting shares and XXXXXXXXXX preferred non-voting shares immediately before that time.

D. The taxable dividends described in Rulings B and C above:

1. will, pursuant to subsection 82(1) and paragraph 12(1)(j), be included in computing the income of the person deemed to have received such dividend;
2. will, pursuant to subsection 112(1), be deductible by the recipient corporation pursuant to subsection 112(1) in computing is taxable income for the taxation year in which such a dividend is deemed to have been received, and, for greater certainty, such deduction will not be prohibited by subsections 112(2.1), (2.2), (2.3) or (2.4);
3. will, pursuant to paragraph (j) of the definition of “proceeds of disposition” in section 54, be excluded in determining the proceeds of disposition to the recipient corporation of the shares so redeemed or purchased;
4. will, by virtue of subsection 112(3), reduce the loss, if any, in respect of the disposition of the shares on which the dividend is deemed to have been received;
5. will not be subject to tax under part IV.1 or Part VI.1; and
6. will not be subject to tax under Part IV except to the extent that the payer corporation is entitled to a dividend refund for its taxation year in which it is deemed to pay dividends, pursuant to paragraph 186(1)(b).

E. Provided that, as part of the series of transactions or events that includes any of the Proposed Transactions, there is not:

1. an acquisition of property in the circumstances described in paragraph 55(3.1)(a);
2. the disposition of property in the circumstances described in paragraph 55(3.1)(b)(i);
3. an acquisition of control in the circumstances described in subparagraph 55(3.1)(b)(ii);
4. an acquisition of a share in the circumstances described in subparagraph 55(3.1)(b)(iii); or
5. an acquisition of property and circumstances described in paragraph 55(3.1)(c) or (d);

which has not been described herein, by virtue of paragraph 55(3)(b), subsection 55(2) will not apply to the taxable dividends referred to in Rulings B and C, and, for greater certainty, subsection 55(3.1) will not apply to deny the exemption under paragraph 55(3)(b) in respect of those dividends.

F. The set-off and cancellation of TC Redemption Note against the corresponding DC Redemption Note, as described in the Paragraph 0 will not, in and of itself, give rise to a forgiven amount within the meaning of either subsection 80(1) or section 80.01. In addition, neither DC nor TC will realize a gain or incur any loss as a result of such set-off and cancellation.

G. Subsection 245(2) will not apply as a result of the Proposed Transactions, in and of themselves, to re-determine the tax consequences in the rulings given above.

These rulings are subject to the limitations and qualifications set out in Information Circular IC 70-6R10 dated September 29, 2020, and are binding on the CRA provided that the Proposed Transactions are completed no later than six months after the date of this letter. The above rulings are based on the law as it reads at the date of this letter and do not take into account any proposed amendments to the Act and the Regulations which, if enacted into law, could have an effect on the rulings provided herein.

OTHER COMMENTS

Unless otherwise confirmed in the above rulings, nothing in this letter should be construed as implying that the CRA has confirmed, reviewed or has made any determination in respect of:

(a) the PUC of any share or the ACB or FMV of any share or property referred to herein;

(b) the balance of the CDA, GRIP, ERDTOH or NERDTOH of any corporation;

(c) the safe income on hand attributable to any shares of any corporation or

(d) any other tax consequence relating to the facts, additional information, Proposed Transactions or any transaction or event taking place either prior to the Proposed Transactions or subsequent to the Proposed Transactions, whether described in this letter or not, including, whether any of the Proposed Transactions would also be included in a series of transactions or events that includes other transactions or events that are not described in this letter.

To the extent that a deemed dividend arises from a corporation redeeming, acquiring or purchasing for cancellation of its shares, a problem of circularity may possibly arise when computing the Part IV tax and the dividend refund of each corporation. We do not provide any comments on that possible issue.

Nothing in this letter should be construed as confirmation, express or implied, that, for the purposes of any of the rulings given above, any adjustment to the FMV of the properties transferred or the redemption amount of the shares issued as consideration, whether pursuant to a price adjustment clause or otherwise, will be effective retroactively to the time of the transfer and issuance of shares. Furthermore, none of the rulings given in this letter are intended to apply to or in the event of the operation of a price adjustment clause, since such adjustment will be due to circumstances that do not constitute proposed transactions that are seriously contemplated. The general position of the CRA with respect to price adjustment clauses is stated in Income Tax Folio S4-F3-C1 Price Adjustment Clauses.

An invoice for our fees in connection with this ruling request will be forwarded to you under separate cover.

Yours Truly,

XXXXXXXXXX
for Division Director
Reorganizations Division
|Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch