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2001 Ruling 2001-0110363- XXXXXXXXXX-- summary under Paragraph 88(4)(b) Summary Under Tax Topics- Income Tax Act- Section 88- Subsection 88(4)- Paragraph 88(4)(b) Amalgamated Target is successor of different predecessors for 88(1)(c.4)(iii) and s. 88(1)(c) midamble purposes Completed bid Pubco and its wholly-owned subsidiary Acquisitionco acquired all the shares of Target in consideration for Pubco shares (with Pubco issuing Pubco shares for delivery by Acquisitionco as consideration to those shareholders of Target transferring their shares to Acquisitionco). ...

Proposed transactions: LossCo will amend its prior years' returns to claim unclaimed capital cost allowance, thereby increasing its non-capital losses the terms of the LossCo Indebtedness will be amended to make them convertible into two new interest bearing debt obligations: the LossCo Note A Indebtedness, bearing interest at LIBOR and ranking pari passu with the general creditors; and the LossCo Note B Indebtedness bearing interest at LIBOR plus X% and ranking junior to the general creditors ProfitCo will then exercise this conversion right ProfitCo will transfer the LossCo Note B Indebtedness to newly-incorporated Canadian subsidiary in exchange for one share of Newco ProfitCo will sell Newco to LossCo for $X, subject to a price adjustment clause "whereby LossCo will issue a demand promissory note to ProfitCo in an amount equal to the amount of any price adjustment" Newco will be wound up into LossCo to make an election under s. 80.01(4) in respect of the settlement of the LossCo Note B Indebtedness; as a result of such settlement, LossCo will become solvent ProfitCo will transfer assets including depreciable property to LossCo in consideration for redeemable retractable preferred shares, electing under s. 85(1), with the transferred assets being leased back one day later, the preferred shares will be redeemed in consideration for the transfer of the assets back to ProfitCo on a non-rollover basis Rulings: the addition of the conversion feature will not result in a disposition of the LossCo Indebtedness provided that there was no novation or rescission of the debt s. 51.1 will apply to the conversion, and no forgiven amount will arise the loss denied under s. 40(2)(e.1) on the transfer of the LossCo Note B Indebtedness to Newco will be added to the adjusted cost base of that debt to Newco under s. 53(1)(f.1) no forgiven amount will arise on the settlement of the LossCo Note B Indebtedness on the taxable transfer-back of the assets, LossCo will utilize its non-capital losses to offset recapture income; and Profitco will acquire such assets at a cost amount and undepreciated capital cost equal to their fair market value [no mention of 1/2 step up limitation in s. 13(7)(e)] ...

Proposed transactions Canco1 will transfer all of the outstanding Forco1 shares, and the "Forco1 Receivable" owing to it, to Finco (a newly-incorporated Luxembourg public limited company subsidiary) in consideration for mandatorily redeemable preferred shares (MRPS) of Finco. Canco1 will transfer all of the outstanding (ordinary and MRPS) Finco shares and the Forco1 Receivable to Canco2 in consideration for Canco2 shares. ...

The three shareholder groupings (comprising a Holdco and Trust) will transfer their DC Amalco shares to their TC in consideration for shares of that TC (with appropriately limited stated capital), electing under s. 85(1). DC Amalco will transfer to a Subco of each TC a pro rata portion of each of its three types of property (determined on a net basis) in consideration for the assumption of liabilities and the issuance of redeemable preferred shares, election under s. 85(1). ...

Drop-down of Canadian Spin-off Business to Newco DC will transfer its assets of the Spin-off Business to a newly-incorporated subsidiary (Newo) in consideration for assumption of liabilities and the issuance of common shares (para 74-75). ... DC transfers its common shares of Newco to TC in consideration for TC preferred shares (para. 80). ...

Proposed transactions: ParentAco will sell all the Aco shares to ParentCco for fair market value cash consideration. ... Cco will acquire all the Aco shares from ParentCco for FMV consideration comprising cash (in excess of the PUC of the Aco shares so that a deemed dividend arises under s. 212.1) and a common share with full stated capital (but whose PUC is ground to nil under s. 212.1(1)(b).) ...

This will be accomplished by Lossco selling cumulative preferrred shares of a newly-incorporated subsidiary to Profitco in consideration for an interest-bearing note of Profitco. ... Lossco will transfer the Newco Preferred Shares to Profitco in consideration for an interest-bearing debenture (the "Profitco Note"), recourse under which will be limited to the Newco Preferred Shares and which will have a security interest in the Newco Preferred Shares. ...

Proposed transactions Trust I will transfer, at FMV, all its Holding LP Units to Subco in consideration for a non-interest bearing promissory note (Subco Note), so that its remaining assets will consist of a loan to Subco (the “Subco Loan”), the Subco Note, interests in sub trusts and cash. Trust I will distribute the Subco Loan and the Subco Note as the consideration for the purchase for cancellation of substantially all of the Trust 1 units (the “Subco Cancelled Units.”) ...

2016 Ruling 2015-0623731R3- Subsections 55(2) and (2.1)-- summary under Forgiven Amount Summary Under Tax Topics- Income Tax Act- Section 80- Subsection 80(1)- Forgiven Amount policy on set-off of unequal redemption notes does not extend beyond a butterfly reorg Background As described in 2015-0601441R3, Sub1 and Sub2 (both taxable Canadian corporations and wholly-owned subsidiaries of Parent, a public corporation) accomplished a winding-up of a general partnership (“Partnership”) through a transfer under s. 85(1) by Sub2 of its interest in Partnership to Sub1 in consideration for Sub1 Preferred Shares and for a non-interest bearing demand promissory note (the “Sub1 Note”) with a principal amount equal to the non-interest-bearing demand promissory note (the “Sub2-Partnership Note”) owing by Sub2 to the Partnership, jointly electing under s. 85(1). ... Parent will transfer to Sub1 all of the Sub2 Preferred Shares (the “Transferred Sub2 Shares”) in consideration for the issuance of Sub1 common shares (the “New Sub1 Shares”), electing under s. 85(1) at Parent’s ACB of the Transferred Sub2 Shares. ...

The Trust had acquired the Real Property from Canco 2 in consideration for the assumption of Loan 1, being a mortgage owing to the third party that had sold the Real Property to Canco 2, and Loan 3, being an unsecured loan owing to Finco, a wholly-owned subsidiary of the Beneficiary. ... Proposed transaction The Trustee will distribute the Real Property (including lease) to the Beneficiary, on condition that the Beneficiary assume Loan 1, Loan 2, and Loan 3, which will be the sole consideration given for. ...