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:
Fair market value of shares that are subject to a stop trading order?
Position:
Question of fact.
Reasons:
The fair market value can only be determined after all of the facts are considered. Recommeneded that the valuations staff at the local TSO be contacted.
972574
XXXXXXXXXX M.P. Sarazin
Attention: XXXXXXXXXX
October 8, 1997
Dear Sirs:
Re: Contribution or Swap of Trade Halted Stocks
This is in reply to your letter dated September 24, 1997, wherein you requested our comments with respect to the transfer or swap of shares of a particular corporation to or from a registered retirement savings plan ("RRSP") where the securities commission has placed a "stop trading order" on the particular shares because of damaging information released to the public in a statement issued by the corporation. In addition, you ask whether the fair market value of the shares is considered to be the closing value immediately before the "stop trading order" or the opening price after the "stop trading order".
Provided that the shares are qualified investments within the meaning assigned by subsection 146(1) of the Income Tax Act, the annuitant could acquire the shares from or sell the shares to his or her RRSP. We note that the disposition would have to take place at the fair market value of the shares at that time.
The fair market value of shares at any particular time can only be determined after a review of all of the facts. However, all of the information that is available to the public up until and including the particular time will be considered in determining the fair market value of the shares of the corporation. In this regard, we suggest that you contact the valuations staff at your local tax services office.
We trust the above comments will be of assistance to you.
Yours truly,
for Director
Financial Industries Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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