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

          ,9t]pret,n ,bullet9
    
,subject3 ,9come ,tax ,act
  ,sale ( ,a3.ts ,receiva#
,numb]3 ,,it-#ahh;,r
,date3 ,septemb] #bf1 #aiid
,ref];e3 ,special ,rel1se

               ,applic,n
    
  ,? ,special ,rel1se revises ,9t]pret,n
,bullet9 ,,it-#ahh;,r1 dat$ ,may #bb1
#aihd 6describe relevant *anges 9 !
,9come ,tax ,act s9ce t bullet9 0
publi%$ & 6add 9t]pretative /ate;ts4 ,x
9corporates ! previ\s *anges made
6p>agraphs #a1 #aj & #aa (! bullet9
0,special ,rel1se dat$ ,april #ag1 #aiij
& c.els t e>li] rel1se4
  ,! *anges 6! bullet9 giv5 2l reflect !
/yli/ic & /ructural *anges 3ta9$ 9 !
,9come ,tax ,act z revis$ 0! fif?     #a
              ,,it-#ahh;,r           a#a
,supple;t 6! ,revis$ ,/atutes ( ,canada1
#aihe1 & 0,s4,c4 #aiid1 c4#g 7=m]ly
,bill ;,c-#ae7 bo? ( : came 96=ce on
,m>* #a1 #aiid4 ,? ,special ,rel1se does
n1 h["e1 *ange o!r p>agraphs (! bullet9
t may 2 a6ect$ solely 0revi.ns f.d 9 !
fif? supple;t4 ,all s* *anges w 2
9corporat$ 96! next full revi.n (!
bullet94

           ,bullet9 ,revi.ns
    
#a4 ,p>agraph #a is revis$ 6add
  9t]pretative mat]ial4

  ,p>agraph #a is replac$ )! foll[+3
  #a4 ,sec;n #bb is applica# ^u elec;n
    0a v5dor &a pur*as]1 ": ! v5dor
    79dividual1 "pn]%ip1 corpor,n or
    e/ate7 sells all or sub/anti,y all
    (! assets (a busi;s t 0 c>ri$ on 9
    ,canada 6! pur*as] :o proposes
    63t9ue ! busi;s4 ,": #ij@3p (!
    assets (! busi;s c>ri$ on 9       #b
              ,,it-#ahh;,r           b#a
    ,canada >e sold1 all or sub/anti,y
    all (! assets ( s* busi;s w 2 3sid]$
    sold4 ,! busi;s assets sold m/
    9clude all ! a3.ts receiva# (! v5dor
    t >e \t/&+ at ! "t (! sale4 8,a3.ts
    receiva#0 9cludes ! debts >is+ f
    loans made 9 ! ord9>y c\rse (!
    busi;s if "p (! busi;s 0 ! l5d+ (
    m"oy4 ,": a taxpay] has m ?an "o
    busi;s & sells all or sub/anti,y all
    (! prop]ty us$ 9 c>ry+ on "o (!
    busi;ses1 sec;n #bb c apply 6t sale4
    ,see ! curr5t v].n ( ,,it-#bjf1
    ,sep>ate ,busi;ses1 =a 4cus.n ( :e!r
    a taxpay] has m ?an "o busi;s4 ,:e!r
    ! pur*as] proposes 63t9ue ! busi;s
    is a "q ( fact4 ,! require;t is n
    met1 = example1 if dur+ a corporate
    reorganiz,n a p>5t corpor,n acquires
    ! busi;s & a3.ts receiva# (a
    subsidi>y corpor,n &1 z "p (!
    reorganiz,n1 ! p>5t corpor,n
    transf]s ! busi;s & ^? receiva#s 6a
    newly 9corporat$ :olly-[n$        #c
              ,,it-#ahh;,r           c#a
    subsidi>y corpor,n : proposes 6c>ry
    on ! "picul> busi;s4 ,on ! o!r h&1 !
    require;t t ! pur*as] m/ propose
    63t9ue ! busi;s t is acquir$ is met1
    = example1 if dur+ a corporate
    reorganiz,n a p>5t corpor,n causes !
    busi;s & a3.ts receiva# (a subsidi>y
    corpor,n 6be transf]r$ directly 6a
    newly 9corporat$ :olly-[n$ subsidi>y
    corpor,n : proposes 6c>ry on !
    "picul> busi;s4 ,9 ? example1 !
    newly 9corporat$ :olly-[n$ subsidi>y
    corpor,n acquires ! busi;s & a3.ts
    receiva# directly f ! subsidi>y
    corpor,n4
#b4 ,p>agraph #g is revis$ 6cl>ify :5 !
  ,de"p;t w view ! 4posi;n ( a3.ts
  receiva# z 2+ on capital a3.t4

  ,p>agraph #g is revis$ 6r1d z foll[s3
  #g4 ,": a v5dor1 :o is on ! a3rual
    basis & :o is n a trad] 9 a3.ts
    receiva#1 sells xs a3.ts receiva#
    al;g ) all or sub/anti,y all (!   #d
              ,,it-#ahh;,r           d#a
    o!r assets ( xs busi;s1 &! v5dor &
    pur*as] d n or _c file an elec;n "u
    sec;n #bb1 any loss on ! sale w 2 a
    capital loss 6! v5dor4 ,s* a loss is
    tr1t$ 9 a3ord.e )! provi.ns (! ,act
    gov]n+ capital losses4 ,h["e1 !
    v5dor does h ! "r 6e/abli% t1 z (!
    date (! sale1 "s (! a3.ts receiva#
    >e bad debts & >e deducti# z an
    exp5se 9 ! ye>4
  
    ,": a pur*as] has acquir$ ! a3.ts
    receiva# al;g ) all or sub/anti,y
    all (! o!r assets (a busi;s & ":
    sec;n #bb does n apply or an elec;n
    has n be5 fil$1 ! pur*as] _c claim
    deduc;ns "u p>agraph #bj7#a77l7 or
    7p7 =! a3.ts pur*as$1 & any ga9 or
    loss on r1liz,n (! a3.ts w 2 a
    capital ga9 or loss 6! pur*as] un.s
    ! pur*as] is a trad] 9 a3.ts
    receiva#4 ,if ! pur*ase is on
    capital a3.t & any (! pur*as$ a3.ts
    receiva# is 3sid]$ uncollecti#    #e
              ,,it-#ahh;,r           e#a
    at ! 5d (a tax,n ye> 5d+ subsequ5t
    6! pur*ase1 ! pur*as] is deem$1
    0p>agraph #ej7#a77a71 6h 4pos$ ( x
    at t "t1 giv+ rise 6a capital loss4
    ,at ! same "t1 ! pur*as] is deem$ 6h
    reacquir$ ! receiva# = nil & any
    recov]y or 4posi;n (! bad debt is
    9clud$ 9 ! -put,n ( capital ga9s 9 !
    ye> ( recov]y4
--------------------------------------#b
#c4 ,p>agraph #aj is revis$ 6delete
  obs]v,ns on sec;ns #aaj.d & #aai s9ce
  ! obs]v,ns >e no l;g] relevant4

  ,p>agraph #aj is revis$ 6r1d z foll[s3
  #aj4 ,": a taxpay] :o reports 9come f
    a f>m+ or fi%+ busi;s on a ca% basis
    4poses (1 or c1ses 6c>ry on1 all or
    "p (! busi;s1 ! am.t rcvd =! a3.ts
    receiva# t wd h be5 9come is 9come
    6! taxpay] 9 ! ye> ( receipt
    pursuant 6subsec;n #bh7#e74 ,? is
    9come :e!r x is rcvd f ! sale (a
    busi;s z a go+ 3c]n1 or f !       #f
              ,,it-#ahh;,r           a#b
    sep>ate sale or lat] collec;n (!
    a3.ts receiva#4
#d4 ,p>agraph #aa is revis$ 6describe
  subsec;n #bh7#d7 z a result (a ,s4,c4
  #aiia1 c4#di 7=m]ly ,bill ;,c-#ah7
  am5d;t4 ,! am5d;t requires a taxpay]
  :o reports 9come f a f>m+ or fi%+
  busi;s on a ca% basis 69clude 9 9come
  an am.t = uncollect$ a3.ts ": at ! 5d
  (! tax,n ye> ! taxpay] is non-resid5t
  & does n c>ry on t busi;s 9 ,canada4

  ,p>agraph #aa is revis$ 6r1d z foll[s3
  #aa4 ,a taxpay] :o reports 9come f a
    f>m+ or fi%+ busi;s on a ca% basis
    may 4pose (1 or c1se 6c>ry on1 !
    busi;s or "p ( x 2f ! a3.ts receiva#
    >e fully collect$4 ,": s* a taxpay]
    c1s$ 6reside 9 ,canada or c1s$ 6c>ry
    on s* a busi;s 9 ,canada af ,july
    #ac1 #aiij &1 at ! 5d (! tax,n ye>1
    is non-resid5t & does n c>ry on t
    busi;s 9 ,canada1 an am.t =!
    uncollect$ a3.ts m/ 2 9clud$ 9    #g
              ,,it-#ahh;,r           b#b
    ! taxpay]'s 9come 0virtue ( subsec;n
    #bh7#d74 ,! am.t 6be 9clud$ 9 9come
    is ! fair m>ket value (! uncollect$
    a3.ts t >ose f c>ry+ on t busi;s 6!
    ext5t t ^? a3.ts 7 n o!rwise 9clud$
    9 calculat+ ! taxpay]'s 9come =! ye>
    or a previ\s tax,n ye> & wd h be5
    9clud$ 9 9come if ! am.t _h be5 rcvd
    0! taxpay] 9 ! ye>4 ,! 3di;ns t !
    taxpay] 8is non-resid5t & does n
    c>ry on t busi;s 9 ,canada0 m1n t
    subsec;n #bh7#d7 w apply to1 =
    example1 a resid5t ( ,canada :o
    c1ses 6c>ry on a f>m+ busi;s 7:e!r 9
    ,canada or 2y xs bord]s7 & c1ses
    6reside 9 ,canada or 6a non-resid5t
    :o c1ses 6c>ry on a f>m+ busi;s 9
    ,canada4 ,! -;ts 9 #aj abv al apply
    6all am.ts rcvd on collec;n (! a3.ts
    up 6& 9clud+ ! ye> 9 : ! taxpay]
    c1s$ 6be a resid5t ( ,canada4


                                      #h
              ,,it-#ahh;,r           c#b
  ,if y h any -;ts reg>d+ ! matt]s
4cuss$ 9 ? rel1se1 pl1se s5d !m to3

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    ,divi.n
  ,policy & ,legisl,n ,bran*
  ,rev5ue ,canada
  #hge ,h]on ,road
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