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

          ,9t]pret,n ,bullet9
    
,subject3 ,9come ,tax ,act
  ,corpor,ns--,9volunt>y ,4solu;ns
,numb]3 ,,it-#ddd;,r
,date3 ,m>* #bf1 #aiic
,ref];e3 ,p>agraph #ed7c7 7al subsec;ns
  #fi7#e71 #hd7#b7 & #hd7#i71 p>agraph
  #ci7#a77c7 & subp>agraph #ed7h77;x77

               ,applic,n
    
  ,? bullet9 c.els & replaces ,9t]pret,n
,bullet9 ,,it-#ddd dat$ ,m>* #ag1 #aihj4
,curr5t revi.ns >e 9dicat$ 0v]tical
l9es4

                ,summ>y
    
  ,? bullet9 provides g5]al -;ts on !
tax implic,ns 6a corpor,n & xs %>ehold]s
": ! corpor,n has be5 9volunt>ily     #a
              ,,it-#ddd;,r           a#a
4solv$4 ,specific,y1 ? bullet9 4cusses !
circum/.es t may give rise 6a 4posi;n (
%>es (a 4solv$ corpor,n 0! %>ehold]s4 ,x
al 4cusses ! tax 3sequ;es result+ f !
4tribu;n ( corporate prop]ty 6!
%>ehold]s1 z well z ! tax tr1t;t ( 9come
e>n$ af 9volunt>y 4solu;n4

          ,4cus.n & ,9t]pret,n
            7p>agraphs #a-c7
    
#a4 ,! t]m 89volunt>y 4solu;n0 describes
  a mann] 9 : ! exi/;e (a corpor,n may 2
  t]m9at$4 ,! -mon "*i/ic ( an 9volunt>y
  4solu;n is t ! 4solu;n does n result f
  any positive ac;n tak5 0! corpor,n4 ,!
  4solu;n typic,y results f ! failure (!
  corpor,n 6fulfil require;ts (! /atutes
  (! 9corporat+ jurisdic;n1 s* z ! fil+
  ( p]iodic reports or ! pay;t ( c]ta9
  fees4
#b4 ,af an 9volunt>y 4solu;n has o3urr$1
  x may 2 possi# 6re/ore ! 4solv$
  corpor,n1 dep5d+ on ! /atutes (!    #b
              ,,it-#ddd;,r           b#a
  9corporat+ jurisdic;n4 ,! proc$ure may
  v>y f ! submis.n ( an applic,n &!
  pay;t (a fee 6! >range;t =a private
  act (a legislature4
#c4 ,! ,9come ,tax ,act does n 3ta9 any
  provi.n : d1ls specific,y )! 9volunt>y
  4solu;n (a corpor,n4 ,"!=e1 h[ ! g5]al
  provi.ns (! ,act apply 6a corpor,n
--------------------------------------#b
  2+ 4solv$ 9volunt>ily w dep5d on !
  facts (! "picul> situ,n4

     ,4tribu;n ( prop]ty 6%>ehold]s
            7p>agraphs #d-e7
    
#d4 ,nei ! corporate /atutes nor !
  ,9come ,tax ,act provide =a deem$
  4tribu;n ( prop]ty 6%>ehold]s :5 a
  corpor,n has be5 9volunt>ily 4solv$4
  ,x is a "q ( fact 9 ea* case z 6:o
  acquir$ corporate prop]ty ^u 4solu;n4
#e4 ,! provi.ns ( subsec;n #fi7#e7 wd
  g5],y apply ":1 on ! w9d+-up (a
  corpor,n1 prop]ty (! corpor,n has   #c
              ,,it-#ddd;,r           a#b
  be5 appropriat$ 9 any mann] :at"e 6or
  =! b5efit (! %>ehold]s4 ,": subsec;n
  #fi7#e7 applies1 ! corpor,n is deem$
  0p>agraph 7a7 6h sold ea* s* prop]ty
  at xs fair m>ket value4 ,dep5d+ on !
  nature (! prop]ty 4pos$ ( 7i4e41
  deprecia# prop]ty1 eligi# capital
  prop]ty or capital prop]ty71 ? may
  give rise 6recaptur$ depreci,n or
  t]m9al loss1 sec;n #ad 9come or a
  capital ga9 or loss4 ,al1 ! %>ehold]
  is deem$ 0p>agraph #fi7#e77b7 6h
  acquir$ ! prop]ty at a co/ equal 6xs
  fair m>ket value4

      ,4posi;n ( %>es (! corpor,n
           7p>agraphs #f-aa7
    
#f4 ,g5],y1 ! 4solu;n (a corpor,n w
  cause a 4posi;n1 )9 ! m1n+ ( p>agraph
  #ed7c71 ( %>es 0! %>ehold]s4 ,6e/abli%
  :e!r or n "! is a 4posi;n ( %>es 9 a
  "picul> case at a "picul> "t1 all !
                                      #d
              ,,it-#ddd;,r           b#b
  facts (! case &! applica# /atutes (!
  9corporat+ jurisdic;n m/ 2 exam9$4
#g4 ,": a corpor,n has be5 4solv$ & x is
  r1sona# 6expect t x w n"e 2 re/or$1 !
  %>ehold]s w 2 3sid]$ 6h 4pos$ ( _!
  %>es :5 ! corpor,n 0 4solv$4 ,? is
  usu,y ! case =a corpor,n t _h no
  prop]ty at ! "t4
#h4 ,": ! corpor,n _h prop]ty at ! "t x
  0 4solv$1 ! corporate /atutes usu,y
  provide =! prop]ty 6be =feit$ 6!
  ,cr[n4 ,h["e1 ! v>i\s ,es*1ts ,acts
  may provide =! subsequ5t return (!
  =feit$ prop]ty 6any p]son1 s* z a
  cr$itor or %>ehold]1 :o has a legal or
  moral claim ^u ! corpor,n4 ,if prop]ty
  is 4tribut$ 6a %>ehold] pursuant 6!
  applica# ,es*1ts ,act1 ! %>es (!
  corpor,n w 2 3sid]$ 6h be5 4pos$ ( at
  t "t4
--------------------------------------#c
#i4 ,! corporate /atutes al usu,y
  provide =! return ( any =feit$ prop]ty
  6! corpor,n if ! corpor,n is        #e
              ,,it-#ddd;,r           a#c
  re/or$4 ,9 situ,ns ": x is r1sona#
  6expect t ! corpor,n w 2 re/or$ 2c x
  _h prop]ty t 0 =feit$ 6! ,cr[n1 ! %>es
  >e n 3sid]$ 6be c.ell$ at ! "t (!
  4solu;n &1 "!=e1 "! is no 4posi;n (
  !m4 ,subject 6#h abv1 if x lat] 2comes
  impossi# 6re/ore ! corpor,n "u !
  appropriate 9corporat+ jurisdic;n1 !
  %>es w 2 3sid]$ 6be c.ell$ & 4pos$ (
  at t lat] "t4
#aj4 ,": x is det]m9$ t "! has be5 a
  4posi;n ( %>es1 ! %>ehold]'s proce$s (
  4posi;n w equal ! fair m>ket value (!
  prop]ty 4tribut$ 6! %>ehold]4 ,if
  subsec;n #hd7#b7 applies 6deem !
  %>ehold] 6h rcvd a divid5d1 ! proce$s
  ( 4posi;n (! %>es w 2 reduc$ 0! am.t
  (! deem$ divid5d 0virtue ( subp>agraph
  #ed7h77;x74
#aa4 ,a capital loss 9curr$ on ! 4posi;n
  ( %>es on an 9volunt>y 4solu;n cd
  qualify z a busi;s 9ve/;t loss "u
  p>agraph #ci7#a77c74 ,subsec;n #hd7#i7
  deems a %>ehold] :o has 4pos$ (a    #f
              ,,it-#ddd;,r           b#c
  %>e z a result (! redemp;n1 acquisi;n
  or c.ell,n (! %>e 0! corpor,n 6h 4pos$
  (! %>e 6! corpor,n4 ,s9ce %>es ( an
  9volunt>ily 4solv$ corpor,n >e 3sid]$
  6h be5 c.ell$ 0! corpor,n1 subsec;n
  #hd7#i7 wd apply4 ,"!=e1 a %>ehold]
  d1l+ at >m's l5g? )! corpor,n wd meet
  ! require;t 9 subp>agraph
  #ci7#a77c77;ii7 & wd 2 all[$ 6tr1t !
  capital loss z a busi;s 9ve/;t loss if
  ! o!r require;ts set \ 9 p>agraph
  #ci7#a77c7 >e met4 ,= m 9=m,n on
  busi;s 9ve/;t losses1 see ! curr5t
  v].n ( ,,it-#dhd1 ,busi;s ,9ve/;t
  ,losses4

       ,tax,n ( 9come af 4solu;n
             7p>agraph #ab7
    
#ab4 ,a corpor,n may rcv 9come f a
  busi;s or prop]ty af x has be5
  9volunt>ily 4solv$4 ,= 9/.e1 !
  %>ehold]s may 3t9ue 6c>ry on ! busi;s
  =m]ly c>ri$ on 0! 4solv$            #g
              ,,it-#ddd;,r           c#c
  corpor,n4 ,any 9come e>n$ f t busi;s w
  usu,y 2 tax$ z 9come (a proprietor%ip1
  "pn]%ip1 jo9t v5ture or tru/1 dep5d+
  on ! facts (! "picul> situ,n4 ,if !
  corpor,n is lat] re/or$1 ! %>ehold]s w
  rema9 lia# = 9come tax on any 9come
  e>n$ 2t ! "t ! corpor,n 0
--------------------------------------#d
  4solv$ &! "t x 0 re/or$4 ,h["e1 9
  situ,ns ": ! lapse (! corporate *>t]
  is cle>ly un9t5;nal &! corpor,n is
  re/or$ )9 a %ort p]iod ( "t1 ! ,de"p;t
  may 3sid] ! 9come 6be t (! corpor,n's4

  ,if y h any -;ts reg>d+ ! matt]s
  4cuss$ 9 ? bullet91 pl1se s5d !m to3







                                      #h
              ,,it-#ddd;,r           a#d
  ,director1 ,te*nical ,public,ns
    ,divi.n
  ,legislative & ,9t]gov]n;tal ,a6airs
    ,bran*
  ,rev5ue ,canada1 ,tax,n
  #hge ,h]on ,road
  ,ottawa1 ,ont>io
  ,k#a;,a #j;,l#h
  














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