The shareholders of Opco, a Canadian-controlled private corporation which has had a July 31 taxation year end, agrees on December 26, 20-A with a public company ("Pubco") for the acquisition of Opco’s shares to occur on January 1, 20-B, upon satisfaction of the specified conditions. S. 251(5)(b) deems Pubco to have acquired control of Opco on December 26, 20-A for purposes inter alia of the CCPC definition, so that s. 249(3.1) triggers a deemed year-end for Opco on December 26, 20-A (since it ceases to be a CPCC). Opco also has a deemed year-end on December 31, 20-A under ss. 256(9) and 249(4) as its control is acquired on January 1, 20-B.
Can Opco elect under s. 249(4)(c) [now s. s. 249(4)(b)] to have its taxation year otherwise ending on December 26, 20-A extended to December 31, 20-A. CRA responded:
Opco could elect under paragraph 249(4)(c) to have its taxation year beginning August 1 and otherwise ending on December 26, 20-A be deemed to end immediately before the acquisition of control time, i.e., December 31, 20-A.