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DC will transfer a proportionate share of its two types of property (cash and near cash; and investment property, namely, the Buildings and related assets) on a net asset butterfly basis under s. 85(1) to a newly-incorporated subsidiary of Holdco B (Holdco B Sub) in consideration for the assumption of liabilities and for Holdco B Sub Special Shares (which will carry more than 10% and less than 50% of the votes for all Holdco B Sub shares), with Holdco B Sub thereby being connected with DC; the shareholder loans will be considered current liabilities for this purpose; DC will purchase for cancellation all of the DC common shares held by Holdco B in consideration for issuing a Note, which will be accepted as absolute payment; no s. 256(9) election will be made respecting the resulting acquisition of control of DC by Holdco A. Holdco B Sub will redeem all of the Holdco B Sub Special Shares held by DC in consideration for issuing a Note, which will be accepted as absolute payment. ...

Proposed transactions Parent will transfer to Can Holdco (which currently has nominal assets) all its FA 2 shares in consideration for common shares of Can Holdco having an equal FMV, and elect at the lesser of under s. 85(1)(c.1)(i) and (ii). Subco 3 will transfer all its FA 2 shares to Can Holdco for a purchase price equal to the shares' adjusted cost base (and with a price adjustment clause based only on any adjustment to such ACB), and Can Holdco will issue in consideration therefor redeemable retractable Class B shares having a redemption amount, apid-up capital and FMV equal to such purchase price. ... Can Holdco will transfer all its FA 1 shares to FA 2 in consideration for additional FA 2 shares with an equivalent FMV. ...

Proposed transactions Parent will transfer to Can Holdco (which currently has nominal assets) all its FA 2 shares in consideration for common shares of Can Holdco having an equal FMV, and elect at the lesser of under s. 85(1)(c.1)(i) and (ii). Subco 3 will transfer all its FA 2 shares to Can Holdco for a purchase price equal to the shares' adjusted cost base (and with a price adjustment clause based only on any adjustment to such ACB), and Can Holdco will issue in consideration therefor redeemable retractable Class B shares having a redemption amount, paid-up capital and FMV equal to such purchase price. ... Can Holdco will transfer all its FA 1 shares to FA 2 in consideration for additional FA 2 shares with an equivalent FMV. ...

2012 Ruling 2012-0460811R3- Public Company Spin-Off Butterfly-- summary under Distribution Summary Under Tax Topics- Income Tax Act- Section 55- Subsection 55(1)- Distribution standard spin-off by public resource co Under the proposed transactions for a spin-off butterfly of Spinco by DC (a public corporation and principal business corporation as defined in s. 66(15)): no dissent rights were exercised Spinco, which is a taxable Canadian corporation and whose common shares have been conditionally accepted for listing but which will not issue any shares until the time of transfer to it below of the DC Butterfly Shares, will elect to be a public corporation by filing the T2073 prescribed form each DC shareholder will exchange each of its DC common shares for one DC New Common Share (having the same rights as the old common shares except that the DC New Common Shares will give the holders thereof the right to vote, to the exclusion of any other class of shares of DC, for the election of directors at any meeting of shareholders called for that purpose) and one DC Butterfly Share (which will be non-voting and redeemable and retractable for the "Butterfly Proportion" of the fair market value of an old DC common share immediately before such reorganization) each DC stock option holder will exchange its options for new DC stock options and Spinco stock options ("The issuance by Spinco of the Spinco Stock Options will be in anticipation of the [butterfly] distribution... and will form part of the non-share consideration relating to such transfer." – para. 29) each DC Butterfly Shares will be transferred to Spinco in consideration for one Spinco common share, with the Spinco common shares being listed on a designated stock exchange the net FMV of each of the three types of property of DC will be determined on a consolidated basis (and where the property of DC is a share of a corporation over which DC has a significant influence, the net FMV of the share of the particular corporation will be multiplied by the proportion that the net FMV of that type of property of the particular corporation is of the net FMV of all the property of the particular corporation- and following the allocation of current liabilities to each cash or near cash property, any remaining net FMV of any accounts receivable, inventories and prepaid expenses of a particular corporation will be reclassified as business property and excluded from cash or near cash property, to the extent that such property will be collected, sold or used by the particular corporation in the ordinary course of the business to which such property relates) DC will transfer to Spinco each transferred asset such that following the transfer the net FMV of each type of transferred property will approximate the Butterfly Proportion; and in consideration therefor Spinco will issue the Spinco Stock Options and Spinco Redemption Shares; DC and Spinco will make a joint s. 85(1) election Spinco and DC will redeem the Spinco Redemption Shares and DC Butterfly Shares for redemption notes (making a s. 89(14) designation respecting the resulting deemed dividend), and will each satisfy its note by transferring the other note to its debtor Rulings: s. 86 rulings re exchange of DC common shares for new common shares and DC Butterfly Shares s. 85.1(1) rulings re transfer of DC Butterfly Shares to Spinco cross-cancellation of notes will not give rise to gain or forgiven amounts ...

Proposed spin-off of Property to Parent before closing of sale Parent will transfer all of the Subco Old Preferred Shares to Subco in consideration for one newly issued Subco Old Common Share, electing under s. 85(1) at the nominal ACB of the transferred shares. ... Parent will transfer its Subco A Preferred Shares to a newly-incorporated subsidiary (“Newco”) in consideration for newly issued common shares of Newco, with the elected amount under s. 85(1) being equal to the transferred shares’ FMV and less than their ACB, thereby resulting in a suspended loss under s. 40(3.4). Subco will transfer the Property to Newco in consideration for the assumption of liabilities and the issuance of redeemable Newco Preferred shares. ...

Proposed transactions Each Grandchild1 Trust transfers its Class B common shares and Class E preferred shares under s. 85(1) to newly-incorporated TC1, TC2 or TC3, as the case may be in consideration for Class A common shares of the TC. After XX has elapsed, DC will transfer under s. 85(1) equal portions of its two types of property to TC1, TC2 and TC3 in consideration for the assumption of liabilities and in consideration for non-voting redeemable retractable “Butterfly Shares.” ...

At the same time, Trust 3 will transfer its Class A common shares of Holdco to Newco in consideration for Class A common shares of Newco, electing under s. 85(1) for this to occur on a rollover basis. At the same time, Father and his three adult children will transfer their Class D preferred shares of Holdco to Newco in consideration for Class B preferred shares of Newco, electing under s. 85(1) for this to occur on a rollover basis. ... Father will sell those Class B shares to Newco in consideration for a note. ...

A and B) in consideration for shares issued to each transferor whose attributes are collectively similar to those so transferred by the transferor. Holdco will transfer some of its preferred shares of Opco on a s. 85(1) rollover basis to a newly-incorporated corporation (Realtyco) in consideration for Class A voting common shares and Class C non-voting preferred shares of Realtyco, so that Realtyco (which had no shares issued on its incorporation by Holdco) is wholly-owned by Holdco. Opco will transfer realty properties to Realtyco in consideration for the assumption of mortgage obligations and the issuance of non-voting preferred shares, and with an s. 85(1) election being made. ...

Pubco will acquire an undivided percentage interest in the Royalty from Partnership D in consideration for the issuance of a demand promissory note (the "Royalty Purchase Note"), with the proceeds being allocated by Partnership D to its partners (Subco and Pubco.) ... Subco will redeem the preferred share issued to Pubco in 1 in consideration for transferring the Newco 1 Note and for issuing a further Note, with a contemporaneous eligible dividend notice. ... Partnership B will transfer its interest in Partnership H and certain shares to a newly-incorporated subsidiary of Pubco (Newco 2) in consideration for redeemable preferred shares of Newco 2 with a price adjustment clause and with a s. 85(2) election made. ...

., including both the immediate non-resident parent (Foreign SpinCo Sub) and non-resident grandparent (Foreign SpinCo) of TC in a circular exchange of consideration. ... DC will transfer the “Distribution Property” (i.e., the DC Sub Common Shares) under s. 85(1) to TC in consideration for the issuance of TC Preferred Shares and (if applicable) the assumption of certain DC liabilities. ... TC will redeem all the TC Preferred Shares, and DC will redeem all the DC Special Shares, in each case, in consideration for issuing a promissory note. ...