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CRA was queried as to whether the Act permitted a choice as to the order in which the properties were disposed of, in order that a terminal loss could be realized as a result of the last property being considered to be disposed of to the unaffiliated person. ...

In the context of there having been an amalgamation, s. 87(2)(z.1) provided that if a capital dividend were paid by a predecessor corporation and a portion thereof would be deemed to be a taxable dividend by s. 83(2.1), the CDA of the predecessor corporation is not transferred to the amalgamated corporation – so that it would thus be necessary to determine whether all or substantially all of Corporation A's CDA, immediately before the payment of such a dividend, could reasonably be considered to consist of amounts not described in paras. ...

CRA noted that it would thus be necessary to determine whether all or substantially all of Corporation A's CDA, immediately before the payment of such a dividend, could reasonably be considered to consist of amounts not described in paras. ...

" In responding, CRA stated that in applying proposed Reg. 5907(2.03) in respect of the particular taxation year: any deduction claimed by the affiliate in computing its earnings or loss from that business, in any taxation year of the affiliate that began on or before the commencement of the particular taxation year and for which the earnings or loss from that business had been determined under subparagraph (a)(i) or (ii) of the definition "earnings" in subsection 5907(1) of the Regulations, would be considered to have been actually claimed under the Act and to be within the maximum amount deductible. ...

For example, if Shareholder 4 or his spouse had de facto control of Holdco, the spouse could be considered affiliated with Holdco (by virtue of subparagraph 251.1(1)(b)(i) or (iii) and the definition of "controlled" in subsection 251.1(3)) or to not deal at arm's length with Holdco Q. ...

. … In general, the work is considered temporary if it can reasonably be expected that it does not constitute a continuous employment of more than two years. ...

…[I]f one or other of the equity investments of A and B in Opco were considered to be made as part of a series of transactions in the course of which the dividends were received by Opco and Realtyco… paragraph 55(3.01)(g) would not apply to the increase in interest described in subparagraph 55(3)(a)(v). ...

Will multiple year ends occur as a result and, if so, in which taxation year will the preliminary transactions be considered to occur? ...

Will multiple year ends occur as a result and, if so, in which taxation year will the preliminary transactions be considered to occur? ...

The principal reason for our position is the fact that the Transitional Reserve is temporary and that it could reasonably be considered that, in general, the "qualifying transitional income" on which the Transitional Reserve is based results in an increase in the value of the shares of the capital stock of the corporation. ...