Income Tax Act — I-3.3 87
Amalgamations 87 (1) In this section, an amalgamation means a merger of two or more corporations each of which was, immediately before the merger, a taxable Canadian corporation (each of which corporations is referred to in this section as a “predecessor corporation”) to form one corporate entity (in this section referred to as the “new corporation”) in such a manner that (a) all of the property (except amounts receivable from any predecessor corporation or shares of the capital stock of any predecessor corporation) of the predecessor corporations immediately before the merger becomes property of the new corporation by virtue of the merger, (b) all of the liabilities (except amounts payable to any predecessor corporation) of the predecessor corporations immediately before the merger become liabilities of the new corporation by virtue of the merger, and (c) all of the shareholders (except any predecessor corporation), who owned shares of the capital stock of any predecessor corporation immediately before the merger, receive shares of the capital stock of the new corporation because of the merger, otherwise than as a result of the acquisition of property of one corporation by another corporation, pursuant to the purchase of that property by the other corporation or as a result of the distribution of that property to the other corporation on the winding-up of the corporation. Shares deemed to have been received by virtue of merger (1.1) For the purposes of paragraph 87(1)(c) and the Income Tax Application Rules , where there is a merger of (a) a corporation and one or more of its subsidiary wholly-owned corporations, or (b) two or more corporations each of which is a subsidiary wholly-owned corporation of the same corporation any shares of the capital stock of a predecessor corporation owned by a shareholder (except any predecessor corporation) immediately before the merger that were not cancelled on the merger shall be deemed to be shares of the capital stock of the new corporation received by the shareholder by virtue of the merger as consideration for the disposition of the shares of the capital stock of the predecessor corporations. New corporation continuation of a predecessor (1.2) Where there has been an amalgamation of corporations described in paragraph (1.1)(a) or of two or more corporations each of which is a subsidiary wholly-owned corporation of the same person, the new corporation is, for the purposes of section 29 of the Income Tax Application Rules , subsection 59(3.3) and sections 66, 66.1, 66.2, 66.21, 66.4 and 66.7, deemed to be the same corporation as, and a continuation of, each predecessor corporation, except that this subsection does not affect the determination of any predecessor corporation’s fiscal period, taxable income or tax payable. Definition of subsidiary wholly-owned corporation (1.4) Notwithstanding subsection 248(1), for the purposes of this subsection and subsections 87(1.1), 87(1.2) and 87(2.11), subsidiary wholly-owned corporation of a person (in this subsection referred to as the “parent”) means a corporation all the issued and outstanding shares of the capital stock of which belong to (a) the parent; (b) a corporation that is a subsidiary wholly-owned corporation of the parent; or (c) any combination of persons each of which is a person described in paragraph 87(1.4)(a) or 87(1.4)(b). Definitions (1.5) For the purpose of this section, financial institution , mark-to-market property and specified debt obligation have the meanings assigned by subsection 142.2(1). Rules applicable (2) Where there has been an amalgamation of two or more corporations after 1971 the following rules apply Taxation year (a) for the purposes of this Act, the corporate entity formed as a result of the amalgamation shall be deemed to be a new corporation the first taxation year of which shall be deemed to have commenced at the time of the amalgamation, and a taxation year of a predecessor corporation that would otherw