Eligible amalgamation and eligible winding-up
 6. (1) In this section, “designated corporation” means, with respect to a particular corporation, (a) a corporation that amalgamated with one or more other corporations to form the particular corporation, if the amalgamation is an eligible amalgamation, (b) a corporation that winds up into the particular corporation in circumstances to which subsection 88 (1) of the Federal Act applies, or (c) a corporation that is a designated corporation with respect to a corporation that is itself a designated corporation with respect to the particular corporation.  O. Reg. 38/09, s. 5. (2) If there has been an eligible amalgamation after December 31, 1993 and before March 22, 2007 of one or more designated corporations, the new corporation formed as a result of the eligible amalgamation must include in determining its adjusted net income for the purposes of Part II.1 of the Act for its first taxation year the lesser of, (a) the sum of all amounts, if any, each of which is an investment loss of a particular designated corporation in respect of the new corporation, (i) from an investment in shares or debt issued by another corporation that is also a designated corporation with respect to the new corporation, and (ii) for a taxation year in which the particular designated corporation at any time controlled the other corporation that issued the shares or debt; and (b) the amount that would be the other corporation’s eligible losses under subsection 57.5 (5) of the Act for its taxation year beginning at the time of the amalgamation if, (i) the other corporation had continued to exist after the eligible amalgamation, (ii) subsection 57.5 (5) of the Act were read without reference to clause (b) of that subsection, and (iii) subsection 57.5 (7) of the Act did not apply.  O. Reg. 38/09, s. 5. (3) The investment loss of a corporation for a taxation year from one or more of its investments in shares or debt issued by another corporation means the amount, if any, by which “A” exceeds “B” where, “A” is the sum of, (a) the corporation’s net loss, if any, for the year for the purposes of Part II.1 of the Act, and (b) the amount, if any, that would be the corporation’s net income for the year for the purposes of Part II.1 of the Act if the corporation’s net income for the year were not affected by any reduction of that net income attributable to a reduction in the fair value of those investments, and “B” is the sum of, (a) the amount, if any, that would be the corporation’s net loss for the year for the purposes of Part II.1 of the Act if the corporation’s net loss for the year were not affected by any increase of that net loss attributable to a reduction in the fair value of those investments, and (b) the corporation’s net income for the year for the purposes of Part II.1 of the Act.  O. Reg. 38/09, s. 5. (4) If an eligible winding-up of a designated corporation (in this subsection called the “subsidiary”) is completed after December 31, 1993 and before March 22, 2007, the particular corporation into which the subsidiary is wound up must include in determining its adjusted net income for the purposes of Part II.1 of the Act for its first taxation year referred to in subsection 88 (1) of the Federal Act that commences after the commencement of the winding-up the lesser of, (a) the sum of, (i) the investment loss of the particular corporation from one or more of its investments in shares or debt issued by the subsidiary for the particular corporation’s first taxation year commencing after the commencement of the winding-up or for a previous taxation year, and (ii) all amounts each of which is the investment loss of another corporation that is a designated corporation in respect of the particular corporation from one or more of that designated corporation’s investments in shares or debt issued by the subsidiary for a taxation year ending before the particular corporation’s first taxation year commencing after the winding-up; and (b) the amount that would be the subsidiary’s eligible losses under subsection 57.5 (5) of the Act for its first taxation year beginning after the commencement of the eligible winding-up if, (i) the subsidiary had continued to exist after the eligible winding-up, (ii) subsection 57.5 (5) of the Act were read without reference to clause (b) of that subsection, and (iii) subsection 57.5 (7) of the Act did not apply.  O. Reg. 38/09, s. 5. (5) For the purposes of subsections (2), (3) and (4), shares and debt issued by a designated corporation are deemed to be debt and shares issued by the particular corporation formed as a result of an eligible amalgamation of the designated corporation with one or more other designated corporations, and the particular corporation shall be deemed to be the same corporation as, and a continuation of, the designated corporation for the purposes of determining an investment loss from shares or debt issued by the particular corporation.  O. Reg. 38/09, s. 5. (6) References in this section to provisions of the Act are references to those provisions as they read, (a) for the purposes of clause (2) (b), immediately after the eligible amalgamation; and (b) for the purposes of clause (4) (b), immediately after the completion of the eligible winding-up.  O. Reg. 38/09, s. 5.