Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
Principal Issues: In house-loss transfer before public company spin-off
Position: Acceptable
Reasons: Losses incurred while corporations affiliated
XXXXXXXXXX 2001-007949
XXXXXXXXXX , 2001
Dear Sirs:
Re: XXXXXXXXXX
Advance Income Tax Ruling 3-992412
dated XXXXXXXXXX, 1999 (the "Ruling Letter")
This is in reply to your letter of XXXXXXXXXX in which you advised us that the proposed transactions described in paragraphs 61 to 74, and paragraphs 76, 78 and 79 in the Ruling Letter (the "Loss Transfer Transactions") will be carried out before the proposed transactions described in the letter from XXXXXXXXXX as subsequently amended (the "Spin-off Transactions"). The transactions described in paragraphs 75 and 77 will take place after the Spin-off Transactions, on XXXXXXXXXX.
Provided that:
(a) the Loss Transfer Transactions are carried out before the Spin-off Transactions are carried out;
(b) the Spin-off Transactions do not result in an acquisition of control, for the purposes of subsection 111(5) of the Income Tax Act (the Act), of any of:
(i) XXXXXXXXXX;
(ii) XXXXXXXXXX;
(iii) a successor of either of the above corporations; or
(iv) a corporation controlled by any of the above corporations; and
(c) the Spin-off Transactions and the Loss Transfer Transactions are not part of the same series of transactions (within the extended meaning assigned to that expression by subsection 248(10) of the Income Tax Act),
we confirm that the rulings given in the Ruling will continue to be binding as indicated therein.
Yours truly,
for Director
Reorganizations and Resources Division
Income Tax Rulings Directorate
Policy and Legislation Branch
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