Income Tax Act — I-3.3 89
e corporation in its preceding taxation year. LRIP addition — amalgamation (9) If a corporation that is resident in Canada and that is neither a Canadian-controlled private corporation nor a deposit insurance corporation (in this subsection referred to as the “new corporation”) is formed as a result of the amalgamation or merger of two or more corporations one or more of which is a taxable Canadian corporation, there shall be included in computing the new corporation’s low rate income pool at any time in its first taxation year the total of all amounts each of which is (a) in respect of a predecessor corporation that was, in its taxation year that ended immediately before the amalgamation, neither a Canadian-controlled private corporation nor a deposit insurance corporation, the predecessor corporation’s low rate income pool at the end of that taxation year; and (b) in respect of a predecessor corporation (in this paragraph referred to as the “CCPC predecessor”) that was, throughout its taxation year that ended immediately before the amalgamation (in this paragraph referred to as its “last taxation year”), a Canadian-controlled private corporation or a deposit insurance corporation, the amount determined by the formula A + B + C - D - E - F - G - H where A is the total of all amounts each of which is the cost amount to the CCPC predecessor of a property immediately before the end of its last taxation year, B is the amount of any money of the CCPC predecessor on hand immediately before the end of its last taxation year, C is the amount, if any, by which (i) the total of all amounts that, if the CCPC predecessor had had unlimited income for its last taxation year from each business carried on, and from each property held, by it in that last taxation year and had realized an unlimited amount of capital gains for that last taxation year, would have been deductible under subsection 111(1) in computing its taxable income for that last taxation year exceeds (ii) the total of all amounts deducted under subsection 111(1) in computing the CCPC predecessor’s taxable income for its last taxation year, D is the total of all amounts each of which is the amount of any debt owing by the CCPC predecessor, or of any other obligation of the CCPC predecessor to pay any amount, that was outstanding immediately before the end of its last taxation year, E is the paid up capital, immediately before the end of its last taxation year, of all of the issued and outstanding shares of the capital stock of the CCPC predecessor, F is the total of all amounts each of which is a reserve deducted in computing the CCPC predecessor’s income for its last taxation year, G is (i) if the new corporation is not a private corporation in its first taxation year, the CCPC predecessor’s capital dividend account, if any, immediately before the end of its last taxation year, and (ii) in any other case, nil, and H is the positive or negative amount determined by the formula I - J where I is the CCPC predecessor’s general rate income pool at the end of its last taxation year, and J is the amount, if any, by which (i) the total of all amounts each of which is an eligible dividend paid by the CCPC predecessor in its last taxation year exceeds (ii) the total of all amounts each of which is an excessive eligible dividend designation made by the CCPC predecessor in its last taxation year. LRIP addition — winding-up (10) If, in a particular taxation year, a corporation (in this subsection referred to as the “parent”) is neither a Canadian-controlled private corporation nor a deposit insurance corporation and in the particular taxation year all or substantially all of the assets of another corporation (in this subsection referred to as the “subsidiary”) were distributed to the parent on a dissolution or winding-up of the subsidiary, there shall be included in computing the parent’s low rate income pool at any time in the particular taxation year that is at or after the end of the su