Words and Phrases - "wound up"
1 June 2004 Internal T.I. 2004-0078161I7 F - ITCs - Winding-up
After indicating that, where a subsidiary was wound up into its parent, the parent could not claim unused investment tax credits ("ITCs") of the subsidiary against the tax otherwise payable by the parent under Part I for a taxation preceding that in which the subsidiary was wound up, the Directorate went on to state:
Were it not for the position taken in paragraph 5 of IT-126R2, subsection 88(1) would only apply on the legal dissolution of the corporation. The position in paragraph 5 of Interpretation Bulletin IT-126R2, however, provides that even where the formal dissolution of a corporation is not complete, the subsidiary is deemed to have been wound up for the purposes of subsection 88(1) if there is evidence that the corporation will soon be dissolved. Confirmation of the proposed dissolution generally includes evidence that the requirements for dissolution, which are set out in paragraph 4 of IT-126R2, have been satisfied (i.e., the debts, obligations or liabilities of the subsidiary have been extinguished or settled, or the creditors have given consent to the dissolution; the interests of all creditors have been satisfied; and all of the remaining property of the subsidiary has been distributed to the parent).