Income Tax Application Rules — I-3.31 26
section 138(11.3) of the amended Act, this section does not apply in respect of any subsequent disposition or deemed disposition of the property. Transfer of farm land by a farmer to his child at death (18) Where (a) a taxpayer owned, on December 31, 1971 and thereafter without interruption until the taxpayer’s death, any land referred to in subsection 70(9) of the amended Act, (b) the land has, on or after the death of the taxpayer and as a consequence thereof, been transferred or distributed to a child of the taxpayer who was resident in Canada immediately before the death of the taxpayer, and (c) it can be shown, within the period ending 36 months after the death of the taxpayer or, where written application therefor has been made to the Minister by the legal representative of the taxpayer within that period, within such longer period as the Minister considers reasonable in the circumstances, that the land has become vested indefeasibly in the child, the following rules apply: (d) paragraph 70(9)(b) of the amended Act does not apply for the purpose of determining the cost to the child of the land or part thereof, as the case may be, and (e) subsection (5) applies in respect of the transfer or distribution of the land to the child as if the references in that subsection to “June 18, 1971” were references to “December 31, 1971”. Inter vivos transfer of farm land by farmer to child (19) Where a taxpayer owned, on December 31, 1971, and thereafter without interruption until a transfer thereof by the taxpayer to the taxpayer’s child, in circumstances to which subsection 73(3) of the amended Act applies, land referred to in that subsection, (a) paragraph 73(3)(d) of the amended Act does not apply for the purpose of determining the cost to the child of the land; and (b) subsection (5) shall apply in respect of the transfer of the land to the child as if the references in that subsection to “June 18, 1971” were references to “December 31, 1971”. Extended meaning of child (20) For the purposes of subsections (18) and (19), child of a taxpayer includes (a) a child of the taxpayer’s child; (b) a child of the taxpayer’s child’s child; and (c) a person who, at any time before attaining the age of 21 years, was wholly dependent on the taxpayer for support and of whom the taxpayer had, at that time, in law or in fact, the custody and control. Shares received on amalgamation (21) Where, after May 6, 1974, there has been an amalgamation (within the meaning assigned by section 87 of the amended Act) of two or more corporations (each of which is in this subsection referred to as a “predecessor corporation”) to form one corporate entity (in this subsection referred to as the “new corporation”), and (a) any shareholder (except any predecessor corporation) owned shares of the capital stock of a predecessor corporation on December 31, 1971 and thereafter without interruption until immediately before the amalgamation, (b) any shares referred to in paragraph (a) were shares of one class of the capital stock of a predecessor corporation (in this subsection referred to as the “old shares”), (c) no consideration was received by the shareholder for the disposition of the old shares on the amalgamation other than shares of one class of the capital stock of the new corporation (in this subsection referred to as the “new shares”), and (c.1) the cost of the new shares received by the shareholder because of the amalgamation was determined otherwise than because of paragraph 87(4)(e) of the amended Act, notwithstanding any other provision of this Act or of the amended Act, for the purposes of subsection 88(2.1) of the amended Act and of determining the cost to the taxpayer and the adjusted cost base to the taxpayer of the new shares, (d) the property that was the old shares shall be deemed not to have been disposed of by the shareholder because of the amalgamation but to have been altered, in form only, because of the amalgamation and to have continued in ex