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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. ...

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. ...

Where an amount is deducted under s. 111(1)(a) for a particular taxation year in respect of a subsequent year's non-capital loss for a subsequent taxation year, (a) which instalment method should be used, and (b) should previously applied non-capital losses from subsequent years be considered, in recalculating a functional currency reporter's taxes payable (or refund) for the particular taxation year? ...

CRA's butterfly ruling indicates that s. 55(2) will not apply to the deemed dividends arising on the cross-redemptions (referred to in Ruling D) occurring on the butterfly reorganization provided that: 10% or more of the FMV of the Foreign SpinCo 1 Common Shares was not, at any time, during the course of the series of transactions or events that includes the dividends described in Ruling D, derived from the DC New Common Shares or derived from the membership interest in Foreign Sub 15....For the purposes of subclause 55(3.1)(b)(i)(A)(II), in determining whether 10% or more of the FMV of the common shares of Foreign SpinCo 1 was derived from the DC New Common Shares that Foreign Sub 15 owns or derived from the membership interest in Foreign Sub 15 that Foreign SpinCo 1 owns, as described in Ruling F(I) above, any indebtedness of Foreign SpinCo 1, that is not a secured debt and that is not a debt related to a particular property, will be considered to reduce the FMV of each property of Foreign SpinCo 1 (or indirectly the FMV derived from DC Common Shares owned by Foreign Sub 15) pro rata in proportion to the relative FMV of all property of Foreign SpinCo 1. ...

" Ruling "The making of each of the Loans together with the repayment of each of the Loans will not, in and of themselves, be considered a series of loans or other transactions and repayments for the purposes of subsection 15(2.6)…. ...

. … Paragraph XXIX-A(3)…[inter alia requires:] …The item of income is derived from the source state (Canada) in connection with or incidental to that (US) trade or business (including any such income derived directly or indirectly by that resident person (US person) through one or more other persons that are residents of the source state (Canada)) ("Connected Test") …[I]nterest paid or credited by a Canadian resident to a US person might be considered "derived in connection with" a US active business in the following circumstances: the interest is paid or credited in respect of an account payable issued by [sic] the US person in the course of carrying on its US active business, the interest payments are in respect of borrowed money used for the purpose of earning income from a business carried on in Canada that is upstream, downstream or parallel to the US active business ("Canadian-Connected Business"), or the interest payments are funded out of the cash flow from such a Canadian-Connected Business. ...

Ruling: The proposed transactions will not by themselves be considered to result in a disposition or increase described in ss. 55(3)(a)(i) to (v), and will be deemed by s. 55(3.01)(g) to not be described in s. 55(3)(a)(ii). ...

The amalgamation will be considered to be an amalgamation within the meaning of s. 87(1). ...

ForCo will not be considered to carry on business through a permanent establishment, as defined in Article 5 of the Treaty, situated in Canada solely as a consequence of the secondment under the Secondment Agreement of certain employees of ForCo to work for CanCo in Canada in respect of the Projects, as described in paragraphs 12 and 13 above [describing the secondment arrangements], or the Projects’ tasks subcontracted to, and executed by, ForCo, as described in paragraphs 14 to 18 above [which include descriptions of the meetings and the task division]. ...

Rulings The amounts payable by FA Opco1 or FA Opco2 to FA Holdco under the Profit Transfer Agreements for a particular taxation year will, to the extent the amount is reflected in FA Opco1's or FA Opco2's respective "earnings" from an active business for the year or a subsequent year (computed before the application of the Profit Transfer Agreements), be considered, for purposes of s. 95(2)(a)(ii)(B), deductible in computing the "earnings" of FA Opco1 or FA Opco2, respectively, from an active business. ...