1992 A.P.F.F. Annual Conference, Q. 1 (January - February 1993 Access Letter, p. 49)

Where an individual exchanges all the outstanding common shares of Opco, having a paid-up capital of $500,000 and a fair market value of $600,000, for treasury shares of another class having a stated capital and fair market value of $600,000, he will be deemed under s. 84(1) to receive a dividend of $100,000.

Where an individual exchanges all the common shares of Opco, having an ACB of $100,000, a paid-up capital of $500,000 and a fair market value of $600,000, for treasury shares of another class having a fair market value and stated capital of $600,000, s. 85(2.1) will only reduce the paid-up capital of the treasury shares received on the exchange at a time of computation subsequent to the time of the exchange, and will not eliminate the deemed dividend.