,canada ,cu/oms                       #a
& ,rev5ue ,ag5cy

          ,9t]pret,n ,bullet9
    
,subject3 ,9come ,tax ,act
  ,capital ,ga9s ,deriv$ 9 ,canada
  0,resid5ts (! ,unit$ ,/ates
,numb]3 ,,it-#agc;,r#b
,date3 ,febru>y #ab1 #aiif
,ref];e3 ,special ,rel1se

               ,applic,n
    
  ,? ,special ,rel1se revises ,9t]pret,n
,bullet9 ,,it-#agc;,r#b dat$ ,janu>y
#cj1 #aihi4 ,! purpose ( ? ,special
,rel1se is 6revise ! bullet9 7#a7
6reflect an am5d;t 6! #aihj ,canada-
,unit$ ,/ates ,9come ,tax ,3v5;n 7!
8#aihj ,3v5;n07 z 3ta9$ 9 ! ?ird
,protocol1 sign$ on ,m>* #ag1 #aiie1 6!
#aihj ,3v5;n1 7#b7 6reflect an am5d;t 6!
,9come ,tax ,act 3ta9$ 9 ,s4,c4 #aiid c4
#g 7=m]ly ,bill ;,c-#ae & 2f t        #a
           ,,x-#agc;,r#b;,,sr        a#a
,bill ;,c-#ib71 7#c7 6cl>ify c]ta9
p>agraphs1 & 7#d7 6delete a p>agraph t
has no curr5t relev.e4

           ,bullet9 ,revi.ns
    
#a4 ,p>agraph #aj (! bullet9 is revis$
  6reflect an am5d;t 6p>agraph #h (
  ,>ticle ,,xiii (! #aihj ,3v5;n4 ,am5d$
  p>agraph #h ( ,>ticle ,,xiii provides
  t x c al apply to 8o!r0 organiz,ns1
  reorganiz,ns1 amalgam,ns1 divi.ns or
  simil> transac;ns & n j 8corporate0
  transac;ns ( ? nature4 ,? am5d;t is
  e6ective ) respect 6tax,n ye>s 2g9n+
  on or af ,janu>y #a1 #aiif4 ,revis$
  p>agraph #aj r1ds z foll[s3
  #aj4 ,": a resid5t (! ,unit$ ,/ates
    ali5ates prop]ty 9 ! c\rse (
    7a7 a corporate organiz,n1
      reorganiz,n1 amalgam,n1 divi.n or
      simil> transac;n1 or
    7b7 ) respect 6tax,n ye>s 2g9n+ on
      or af ,janu>y #a1 #aiif1 any    #b
           ,,x-#agc;,r#b;,,sr        b#a
      o!r organiz,n1 reorganiz,n1
      amalgam,n1 divi.n or simil>
      transac;n1
  &! pr(it1 ga9 or 9come >is+ f ! ali5,n
  is n recogniz$ = 9come tax purposes 0!
  ,unit$ ,/ates b is s recogniz$
  0,canada1 p>agraph #h ( ,>ticle ,,xiii
  (! #aihj ,3v5;n provides a m1ns ":by
  d\# tax,n may 2 avoid$ 0def]r+
  recogni;n 9 ,canada (! pr(it1 ga9 or
  9come4 ,6a*ieve s* a def]ral1 ! p]son
  or "pn]%ip :o acquires t prop]ty &!
  v5dor m/ peti;n ! -pet5t au?or;y 9
  ,canada 6def] ! tax,n 7see #aa 2l74
  ,if ! ,canadian -pet5t au?or;y a3$es
  6! reque/1 an agree;t m/ 2 5t]$ 962t t
  au?or;y &! peti;n]s "u : ! def]ral (
  tax,n w 2 9 e6ect = s* "t & "u s* o!r
  3di;ns z >e /ipulat$ 9 ! agree;t4
  ,s9ce ! purpose ( p>agraph #h (
  ,>ticle ,,xiii (! #aihj ,3v5;n is
  6avoid d\# tax,n1 relief w only 2
  grant$ 6! ext5t nec 6avoid s* d\#
  tax,n4 ,? provi.n is only           #c
           ,,x-#agc;,r#b;,,sr        c#a
  applica# ": ali5,ns1 9 ! circum/.es
  /at$1 result 9 a net ga9 7i4e4 ga9s
  exce$ losses74 ,! 8-pet5t au?or;y0 9
  ,canada is ! ,m9i/] ( ,n,nal ,rev5ue
  or ! ,m9i/]'s au?oriz$ repres5tative4
  ,pl1se ref] 6! curr5t issue ( ,9=m,n
  ,circul> #ga-ag1 ,reque/s = ,-pet5t
  ,au?or;y ,3sid],n ,"u ,mutual ,agree;t
  ,proc$ures 9 ,9come ,tax ,3v5;ns1 )
  respect 6reque/s = -pet5t au?or;y
  3sid],n4 7,see al #aa 2l47
#b4 ,p>agraph #aa (! bullet9 is revis$
  6reflect an am5d;t1 applica# af #aihd1
  6sec;n #aae.a (! ,9come ,tax ,act &
  6add o!r relevant 9=m,n4 ,! am5d;t
  6sec;n #aae.a 0 made 7;i7 9 ord] t xs
  applic,n wd n 2 re/rict$ 6! types (
  transac;ns li/$ 9 t sec;n 7z x r1d 2f
  ! am5d;t71 b r wd 2 applica# 6a broad]
  range ( transac;ns1 9clud+ propos$
  transac;ns1 & 7;ii7 9 ord] 6provide =!
  transf] (a taxpay]'s "rs & oblig,ns
  7"u an agree;t 6: ! sec;n applies7
                                      #d
           ,,x-#agc;,r#b;,,sr        d#a
  6ano!r taxpay]4 ,revis$ p>agraph #aa
  r1ds z foll[s3
  #aa4 ,if "! is a transac;n z describ$
    9 #aj abv t has tax-def]r$ /atus 9 !
    ,unit$ ,/ates b n 9 ,canada1 sec;n
    #aae.a (! ,canadian ,9come ,tax ,act
    reflects ! ,m9i/] ( ,n,nal
--------------------------------------#b
    ,rev5ue's au?or;y 6provide relief f
    ! d\# tax,n t may o!rwise result4
    ,": ! ,m9i/] &a taxpay] h 5t]$ 96an
    agree;t "u a provi.n (a tax tr1ty )
    ano!r c.try t has ! =ce ( law 9
    ,canada1 s* z p>agraph #h ( ,>ticle
    ,,xiii (! #aihj ,3v5;n1 subsec;n
    #aae.a7#a7 provides t ! t]ms &
    3di;ns (! agree;t w gov]n ! tax,n (!
    taxpay] 9 ,canada not)/&+ ! provi.ns
    (! ,act t wd o!rwise apply4 ,s* an
    agree;t may d1l ) 7b is n re/rict$
    to7 s* matt]s z ! v5dor's proce$s (
    4posi;n & pur*as]'s co/ ( prop]ty1 !
    tax base ( deprecia# prop]ty 9
    ,canada &! "*iz,n ( prop]ty 9     #e
           ,,x-#agc;,r#b;,,sr        a#b
    ,canada 7e4g1 z capital prop]ty74
    ,subsec;n #aae.a7#a7 c apply 6an
    agree;t t 3c]ns a -plet$ or a
    propos$ transac;n4 ,"u subsec;n
    #aae.a7#b71 if ! "rs & oblig,ns (a
    taxpay] "u an agree;t )! ,m9i/]
    describ$ 9 subsec;n #aae.a7#a7 h be5
    transf]r$ 6ano!r taxpay] )! 3curr;e
    (! ,m9i/]1 t o!r taxpay] is deem$ 6h
    5t]$ 9to1 & is ?us b.d by1 ! agree;t
    = purposes ( apply+ subsec;n
    #aae.a7#a74 ,taxpay]s :o wd l 65t]
    96an agree;t describ$ 9 subsec;n
    #aae.a7#a7 %d write to3
  
    ,director ,g5]al
    ,9t]n,nal ,tax ,directorate
    ,rev5ue ,canada
    ,second ,floor
    ,t[] ;,c
    ,place ,vani]
    #be ,mc,>?ur ,road
    ,vani] ,,on ,k#a;,a #j;,l#e4
                                      #f
           ,,x-#agc;,r#b;,,sr        b#b
  ,x %d al 2 not$ t ! provi.ns ( sec;n
  #aaf usu,y apply ": a non-resid5t
  p]son 4poses ( taxa# ,canadian
  prop]ty4 ,! require;ts "u t sec;n >e
  4cuss$ 9 ! curr5t v].n ( ,9=m,n
  ,circul> #gb-ag1 ,proc$ures ,3c]n+ !
  ,4posi;n ( ,taxa# ,canadian ,prop]ty
  0,non-,resid5ts ( ,canada--,sec;n
  #aaf4
#c4 ,p>agraphs #ab & #ad (! bullet9 >e
  revis$ = purposes ( cl>ific,n4
  ,previ\sly1 ^! p>agraphs did n cov] a
  situ,n 9 : an ali5at$ capital asset _h
  be5 acquir$ 0a ,u4,s4 resid5t prior
  6,janu>y #a1 #aigb 7! />t+ po9t =
  ,canada's tax,n ( capital ga9s74
  ,p>agraphs #ab & #ad >e "!=e revis$1
  &a second example is a4$ at ! 5d (
  p>agraph #ad1 9 ord] 6cov] s* a
  situ,n4 7,:ile ! f/ example at ! 5d (
  p>agraph #ad is updat$ & cl>ifi$1 x
  rema9s ess5ti,y ! same z 2f 9 t x
  3t9ues 6be bas$ on a po/-#aiga
                                      #g
           ,,x-#agc;,r#b;,,sr        c#b
  acquisi;n situ,n47 ,revis$ p>agraphs
  #ab & #ad r1d z foll[s3
  #ab4 ,p>agraph #i ( ,>ticle ,,xiii (!
    #aihj ,3v5;n provides a transi;nal
    rule reflect+ ! fact t1 "u ,>ticle
    ,,viii (! #aidb ,canada-,unit$
    ,/ates ,9come ,tax ,3v5;n 7! 8#aidb
    3v5;n071 ga9s deriv$ 0a resid5t or
    corpor,n or o!r 5t;y (! ,unit$
    ,/ates f ! sale or ex*ange ( capital
    assets locat$ 9 ,canada 7 exempt f
    tax 9 ,canada provid$ t s* resid5t
    or corpor,n or o!r 5t;y did n h a
    p]man5t e/abli%;t 9 ,canada at any
    "t 9 ! tax,n ye> dur+ : ! sale or
    ex*ange o3urr$4 ,p>agraph #i (
    ,>ticle ,,xiii (! #aihj ,3v5;n
    reduces ! am.t (a capital ga9 t wd
    o!rwise 2 lia# 6tax 9 ,canada deriv$
    0a p]son resid5t 9 ! ,unit$ ,/ates f
    ! ali5,n (a capital asset locat$ 9
    ,canada1 provid$ t s* p]son ei
    7a7 [n$ ! asset on ,septemb] #bf1
      #aihj & 0 a resid5t (! ,unit$   #h
           ,,x-#agc;,r#b;,,sr        d#b
      ,/ates on ,septemb] #bf1 #aihj &
      at all "ts af t date until !
      ali5,n2 or
    7b7 acquir$ ! asset 9 a transac;n :
      qualifi$ z a non-recogni;n
      transac;n 7see #ac 2l7 = ,canadian
      tax purposes4
  ,! reduc;n 6! am.t (! capital ga9
  o!rwise lia# 6tax 9 ,canada is
  describ$ 9 #ad 2l4 ,p>agraph #i (
  ,>ticle ,,xiii does n apply to
    7c7 an asset t1 on ,septemb] #bf1
      #aihj1 ei =m$ "p (! busi;s prop]ty
      (a p]man5t e/abli%;t or p]ta9$ 6a
      fix$ base 9 ,canada (a resid5t (!
      ,unit$ ,/ates2
--------------------------------------#c
    7d7 an ali5,n 0a resid5t (! ,unit$
      ,/ates ( an asset t 0 [n$ at any
      "t af ,septemb] #bf1 #aihj & 2f s*
      ali5,n 0a p]son :o 0 n at all "ts
      af t date :ile ! asset 0 [n$ 0s*
      p]son a resid5t (! ,unit$ ,/ates2
      or                              #i
           ,,x-#agc;,r#b;,,sr        a#c
    7e7 an ali5,n ( an asset t 0 acquir$
      0a p]son at any "t af ,septemb]
      #bf1 #aihj & 2f s* ali5,n 9 a
      transac;n o!r ?an a non-recogni;n
      transac;n4
#ad4 ,9 apply+ ! transi;nal rule 9
  p>agraph #i ( ,>ticle ,,xiii (! #aihj
  ,3v5;n z ref]r$ 6in #ab abv1 ! reduc;n
  6! am.t (! capital ga9 o!rwise lia#
  6tax 9 ,canada is ei
  7a7 ! propor;n ( t am.t t is
    attributa# on a mon?ly basis 6!
    p]iod 5d+ on ,decemb] #ca1 #aihd 7!
    me?od = det]m9+ s* propor;n is "h9af
    ref]r$ 6z ! 8pro-rata me?od071 or
  7b7 s* grt] por;n ( t am.t z is %[n 6!
    satisfac;n (! ,canadian -pet5t
    au?or;y 6be r1sonably attributa# 6t
    p]iod4
  ,= purposes ( det]m9+ ! am.t (!
  capital ga9 t is o!rwise lia# 6tax 9
  ,canada1 "o %d keep 9 m9d t "u !
  ,canadian 9come tax sy/em1 any por;n
  (a capital ga9 t a3ru$ up 6! 5d    #aj
           ,,x-#agc;,r#b;,,sr        b#c
  ( #aiga is ess5ti,y n lia# 6tax 9
  ,canada4 ,? result is a*iev$ "? !
  applic,n (! ,9come ,tax ,applic,n
  ,rules1 #aiga 78,,it>07 t takes
  96a3.t1 :5 calculat+ a capital ga9 on
  a prop]ty t has be5 [n$ s9ce 2f #aigb1
  ! fair m>ket value ( t prop]ty z (
  8;,v-"d0 7i4e41 valu,n "d z (! 5d (
  #aiga74 ,! examples 2l illu/rate ! use
  (! pro-rata me?od = reduc+ ! capital
  ga9 o!rwise lia# 6tax 9 ,canada4 ,if !
  taxpay] 7i4e41 ,unit$ ,/ates resid5t7
  wi%es 9/1d 6%[ 6! satisfac;n (!
  ,canadian -pet5t au?or;y t a grt]
  por;n (! capital ga9 o!rwise lia# 6tax
  9 ,canada is attribut$ 6! p]iod 5d+
  ,decemb] #ca1 #aihd1 ? is usu,y
  a3ompli%$ 0hav+ ! prop]ty apprais$ z (
  ,decemb] #ca1 #aihd4 ,a taxpay] :o
  wi%es 6use ? me?od m/ 9dicate ? on !
  taxpay]'s ,canadian 9come tax return
  =! tax,n ye> 9 : ! ali5,n took place &
  m/ atta* 6! return a /ate;t describ+ !
  relevant evid;e4 ,! ,canadian      #aa
           ,,x-#agc;,r#b;,,sr        c#c
  -pet5t au?or;y or au?oriz$
  repres5tative w det]m9e :e!r ! taxpay]
  has satisfi$ ! require;ts ( p>agraph
  #i ( ,>ticle ,,xiii (! #aihj ,3v5;n4

,example #a ( pro-rata me?od 7prop]ty
  acquir$ af #aiga7

  ,an 9dividual resid5t (! ,unit$ ,/ates
  acquir$ r1l prop]ty situat$ 9 ,canada
  on ,janu>y #a1 #aigh = 4#ajj1jjj4 ,!
  prop]ty 0 sold on ,octob] #ca1 #aiie =
  4#ahj1jjj4 ,=! sake ( simplic;y1
  assume "! 7 no co/s ( sell+ ! prop]ty4
  ,if ! pro-rata me?od provid$ = 9
  p>agraph #i ( ,>ticle ,,xiii (! #aihj
  ,3v5;n 7 us$1 ! capital ga9 o!rwise
  lia# 6tax 9 ,canada wd 2 reduc$ z
  foll[s3




                                     #ab
           ,,x-#agc;,r#b;,,sr        d#c
,capital ga9 o!rwise lia#
  6tax 9 ,canada equals
  4#ahj1jjj proce$s m9us
  4#ajj1jjj co/ """"""""""""""" 4#hj1jjj
,numb] ( mon?s prop]ty [n$
  equals """""""""""""""""""""""""" #bad
,numb] ( mon?s prop]ty [n$
  prior 6,janu>y #a1 #aihe
  equals """"""""""""""""""""""""""" #hd
,reduc;n 6capital ga9 equals
  #hd divid$ 0#bad multipli$
  04#hj1jjj equals """""""""""" 4#ca1djb
,capital ga9 lia# 6tax 9
  ,canada af reduc;n equals
  4#hj1jjj m9us 4#ca1djb
  equals """""""""""""""""""""" 4#dh1eih
,taxa# capital ga9 equals
  ?ree-qu>t]s ( 4#dh1eih
  equals """""""""""""""""""""" 4#cf1ddi




                                     #ac
           ,,x-#agc;,r#b;,,sr         #d
,example #b ( pro-rata me?od 7prop]ty
  acquir$ 2f #aigb7

  ,an 9dividual resid5t (! ,unit$ ,/ates
  acquir$ l& situat$ 9 ,canada on
  ,janu>y #a1 #aifj = 4#bj1jjj4 ,! ;,v-
  "d value (! prop]ty at ! 5d ( #aiga 0
  4#hj1jjj4 ,! prop]ty 0 sold on ,octob]
  #ca1 #aiie = 4#ahj1jjj4 ,=! sake (
  simplic;y1 assume "! 7 no co/s ( sell+
  ! prop]ty4 ,if ! pro-rata me?od
  provid$ = 9 p>agraph #i ( ,>ticle
  ,,xiii (! #aihj ,3v5;n 7 us$1 !
  capital ga9 o!rwise lia# 6tax 9
  ,canada wd 2 reduc$ z foll[s3

,capital ga9 o!rwise lia# 6tax
  9 ,canada equals 4#ahj1jjj
  proce$s m9us 4#hj1jjj ;,v-"d
  value 7:1 9 ? example1 is
  deem$ 6be ! adju/$ co/ base
  2c ( ,,itar #bf7#c77 equals  4#ajj1jjj

                                     #ad
           ,,x-#agc;,r#b;,,sr        a#d
,numb] ( mon?s prop]ty [n$ af
  ,decemb] #ca1 #aiga 7! />t+
  po9t = ,canada's tax,n (
  capital ga9s7 equals """""""""""" #bhf
,numb] ( mon?s prop]ty [n$ af
  ,decemb] #ca1 #aiga & prior
  6,janu>y #a1 #aihe equals """"""" #aef
,reduc;n 6capital ga9 equals
  #aef divid$ 0#bhf multipli$
  04#ajj1jjj equals """"""""""" 4#ed1ede
,capital ga9 lia# 6tax 9
  ,canada af reduc;n equals
  4#ajj1jjj mm9us 4#ed1ede
  equals """""""""""""""""""""" 4#de1dee
,taxa# capital ga9 equals
  ?ree-qu>t]s ( 4#de1dee
  equals """""""""""""""""""""" 4#cd1jia

#d4 ,p>agraph #ae (! bullet91 z issu$
  ,janu>y #cj1 #aihi1 has no curr5t
  relev.e & is delet$4


                                     #ae
           ,,x-#agc;,r#b;,,sr        b#d
  ,if y h any -;ts reg>d+ ! matt]s
4cuss$ 9 ? special rel1se1 pl1se s5d !m
to3

  ,director1,te*nical ,public,ns ,divi.n
  ,policy & ,legisl,n ,bran*
  ,rev5ue ,canada
  #hge ,h]on ,road
  ,ottawa ,,on ,k#a;,a #j;,l#h














                                     #af