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2012 Ruling 2011-0392041R3- Incorporation of a Professional Partnership-- summary under Subsection 85(3) Summary Under Tax Topics- Income Tax Act- Section 85- Subsection 85(3) non s. 85(2) property allocated exclusively to liability assumption, and share/note consideration pre-allocated Background. ... Proposed transactions Newco (a CCPC) will issue one common share to each Partner for nominal consideration. In connection with the transfer by the Partnership of all the Property to Newco, Newco will assume a portion of the Liabilities equal in amount to the fair market value of Non-85(2) Property as sole consideration for such transfer (with a joint election being filed under s. 22 respecting the accounts receivable) and as consideration for the Partnership's transfer to Newco of the 85(2) Property, Newco will: (i) assume the "Remaining Liabilities" (i.e. the portion of the Liabilities remaining after the transfer of the Non-85(2) Property), (ii) and issue the "Promissory Notes" and the "Preference Shares" to the Partnership (with a joint s. 85(2) election being made). ...

" Profitco will transfer all its shares of Subco to Lossco under s. 85(1) in consideration for non-voting redeemable retractable preferred shares of Lossco. ... " After the LP1 year end, Amalco will transfer the LP1 units to a newly-incorporated ULC ("Newco") under s. 85(1) in consideration for common shares. Amalco will transfer its common shares of Newco to Profitco under s. 85(1) in consideration for non-voting redeemable retractable preferred shares of Profitco. ...

For example, under the spin-off to Cco: Bco will transfer the Division 1 assets to Cco in consideration for preferred shares, electing under s. 85(1). ... Bco will purchase for cancellation its common shares held by Cco in consideration for issuing a non-interest bearing demand note, with the resulting deemed dividend designated as an eligible dividend. Cco will redeem the preferred shares held by Bco in consideration for issuing a non-interest bearing demand note, with the resulting deemed dividend designated as an eligible dividend. ...

23 January 2002 Ruling 36706 [rent prepayment accelerates tax payable date]-- summary under Subsection 168(2) Summary Under Tax Topics- Excise Tax Act- Section 168- Subsection 168(2) rent prepayment accelerates tax payable date Respecting rent prepayments made under a capital lease of equipment to a registered lessor, CRA stated: Subsection 168(2)...states that where consideration for a taxable supply is paid or becomes due on more than one day, the tax in respect of the supply is payable on each day that is the earlier of the day a part of the consideration is paid and the day that part becomes due and the tax that is payable on each such day shall be calculated on the value of the part of the consideration that is paid or becomes due, as the case may be, on that day. ...

2012 Ruling 2012-0435291R3- Public Corporation PUC Reduction-- summary under Subsection 84(2) Summary Under Tax Topics- Income Tax Act- Section 84- Subsection 84(2) sale of Spinco in reverse takeover of capital pool company followed by PUC distribution of share consideration A CBCA Canadian public company (the "Corporation") transferred Canadian property, which represented substantially all of the assets used by it in an active business, to a CBCA Newco on an s. 85(1) rollover basis in consideration for common shares. It then sold Newco to PurchaseCo (a Canadian public company which was a "capital pool company") in consideration for PurchaseCo common shares and special warrants (apparently in order to qualify the issuance of the related common shares of PurchaseCo for securities law purposes). ...

In finding that the supplies of T-shirts by the charity were not exempt, with HST or GST applying on the consideration of $X for each supply of a T-shirt, CRA stated:...where the charity provides the person making the contribution with property or a service of more than nominal value that served as an inducement to make the contribution, then for ETA purposes, the amount of the contribution is not regarded as a gift but as consideration for the supply of the property or service given in return by the charity. As well, the supply of the property or service made by the charity to the contributor is not a gift made for no consideration. ...

In particular, there will be an exchange of a pro rata portion (based on the relative FMV of the Newco shares) of each DC stock option to Spinco and DC in consideration for the grant of replacement options. Such issuance by Spinco will be treated as non-share consideration for the butterfly transfer of Newco shares to Spinco (otherwise occurring in consideration only, or mostly, for the issuance of Spinco special shares). ...

After the settling of a new unit trust (“MFT”), having redeemable retractable units, by a Canadian-resident third party, the Fund subscribes for MFT units for nominal cash consideration and the unit of the settlor is redeemed. ... Partnership will transfer all of its Opco Shares and Note to MFC in consideration for MFC Class B Shares (having similar attributes to the MFC Class A Shares), with the s. 85(2) election to be filed by Amalco MFC and Partnership. ... GP II will sell its undivided interest in each property to Partnership for fair market value consideration and then will be wound up. ...

Plan of Arrangement for Target Each Target Share held by a dissenting shareholder was deemed to be transferred to BidAmalco in consideration for a right to be paid fair value. ... Each Target Class A Share was transferred to BidAmalco for cash consideration. ... Buyer XX Holdco transferred the shares of Buyer XX Opco to Mergeco in consideration for common shares in the capital of Mergeco. ...

B and Trust D&E will transfer their interests in various rental properties to Newco 3 under s. 85(1) for consideration including Class A common shares. ... A and Trust C will transfer their interests in rental properties to Newco 3 under s. 85(1) for consideration including Class A common shares. ... Trust C will transfer its Class A common shares of Newco 3 to Newco 1 under s. 85(1) in consideration for a non-interest-bearing demand promissory note equalling most of the Hard ACB of the transferred shares, and for Class C preferred shares of Newco 1 as to the balance. ...