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Its assets consist mainly of inventory and accounts receivable arising in connection with its business activities, land and building which it uses in carrying on its business and goodwill associated with the business. ... In addition, you have identified several areas which you believe may be of potential concern to the Department in connection with this particular series of transactions and have also requested our views concerning these areas. ...

We understand that to the best of your knowledge and that of the taxpayers involved, none of the issues described herein is: (a) being considered by a Tax Services Office or a Taxation Centre in connection with any tax returns already filed, or (b) the subject of any notice of objection or is under appeal. ... Offering expenses of approximately $XXXXXXXXXX to be incurred in connection with issuing or selling Partnership Units will be paid by the Partnership. ... XXXXXXXXXX will provide administrative services to the Partnership which will include:- maintaining financial accounts in connection with the business of the Partnership;- preparing and filing all necessary reports and filings required by applicable corporate, partnership and securities legislation;- paying distributions to Limited Partners;- arranging for the payment of Sales Commissions to dealers in connection with the distribution of Units by the Partnership; and- providing all other general day-to-day activities as may be required for the purpose of maintaining the business and operation of the Partnership. ...

Our comments on the resulting income tax consequences are: a) no deduction will be allowed to the vendor as no outlay of an expense nature has been incurred; b) the outlay made by the purchaser in connection with the service contracts was a capital outlay made in connection with the sale of a service business; c) the purchaser purchased a business and the service obligations assumed are part of the consideration paid for the business, so no amount can be brought into the purchaser's income under paragraph 12(1)(a) of the Act as the service obligations arose in connection with a capital transaction; and d) the purchaser will not be allowed to deduct any costs incurred to render the related services as the outlay is incurred in connection with a capital obligation acquired in the purchase transaction, that is, they are not expenses laid out to earn income. ...

We also acknowledge the information provided during our subsequent telephone conversation (XXXXXXXXXX) in connection with your request. ...

That interpretation is superceded by a recent legal opinion we obtained in connection with another file. ...

In basic terms, the minimum amount is now the total of: a "prescribed fraction" for the year (as discussed in the enclosed bulletin) multiplied by the total fair market value of the property held in connection with the fund at the beginning of the year (other than certain annuity contracts), and the total (or an estimate thereof) of all periodic amounts received by a trust governed by the fund, under such an annuity held at the start of the year. ...

We have not encountered a situation similar to the one you have outlined in connection with the 21-year deemed realization rule. ...

To the best of your knowledge, and that of the parties to this ruling, none of the issues contained in this advance income tax ruling is being considered by a Tax Services Office and/or a Taxation Centre in connection with an income tax return previously filed and none of the issues contained herein is under objection or appeal. ...

We understand that, to the best of your knowledge and that of the taxpayers, none of the issues raised in this ruling is being considered by a Taxation Services Office or Taxation Centre in connection with an income tax return already filed, is the subject of any notice of objection or is under appeal. ...

We also acknowledge the information provided during our various telephone conversations in connection with your request (XXXXXXXXXX). ...