RSM424H1 Final: Final Exam Note 3
11 Jun 2017
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A merger of 2 or more corporations: can be vertical or horizontal. Corporations merge to form a new corporation (the new corporation ) Any losses of the predecessor corporations become the losses of the new corporation and are available in the 1st taxation year of the new corporation losses can be used immediately. Deemed proceeds to shh of predecessor corporation shares = acb (old shares) Acb (new corporation shares acquired) = acb (old shares: provided that only share consideration is received. Both corporations are deemed to have sold their assets to the new corporation at their tax values (acb/ucc/cec) Acquisition of control (aoc) might occur net capital losses expired immediately, non-capital losses depend. The tax treatment of a wind-up is similar to an amalgamation in that the assets are normally transferred, for tax purposes, at their tax values resulting in no immediate tax consequences.
