Respecting the application of s. 44.1 to an initial public offering of common shares (“Subscribed Shares”) by a Canadian-controlled private corporation, CRA stated, respecting the application of the qualifying disposition definition, CRA stated:
First, the corporation that issued the Subscribed Shares to the individual must inter alia be a CCPC at the time of the issuance. Second, throughout the entire period during which the Subscribed Shares were owned by the individual, they must have been common shares of a corporation that is carrying on an active business. With respect to that latter requirement, we refer you to subsection 44.1(8) which provides that property is deemed, in certain circumstances, to be used or held by a corporation in the course of carrying on the active business of that corporation.