What is the "transition time" of a corporation resulting from an amalgamation where both predecessor corporations had a transition time? CRA responded:
Where the amalgamation took place between January 2, 2008 and January 1, 2009 inclusive, the amalgamated corporation has a transition time that generally corresponds to the date of the amalgamation. In other words, unless it has elected a shortened taxation year end after the amalgamation, the amalgamated corporation will have a taxation year beginning on the amalgamation date somewhere between January 2, 2008 and January 1, 2009 inclusive, which will be its transition time. Pursuant to paragraph 1 of subsection 51(1), the amalgamated corporation in these situations will generally be deemed to be the same corporation as, and a continuation of, each of its predecessor corporations. Consequently, the amalgamated corporation to which paragraph 1 of subsection 51(1) applies will be able to aggregate, under the normal amalgamation rules, all amounts relating to the total federal balance and the total Ontario balance of the predecessor corporations. As a result, the corporation will calculate its total federal balance and its total Ontario balance under subsections 48(4) and (6).
However, where the amalgamation took place on or after January 2, 2009, the amalgamated corporation will not have a transition time since it will not have a taxation year that includes the beginning of 2009. The predecessor corporations will therefore calculate their transitional debits and tax credits on their respective transition times. Where the amalgamation is an eligible amalgamation, paragraph 3 of subsection 51(1) will apply.