Is cash considered to be property for purposes of the application of s. 55(2.1)(b)(ii)(B)?
CRA indicated that it is contrary to the scheme of the Act to allow for a tax-free increase in costs, and that there is a lack of tax integration where a corporate shareholder receives, as a non-taxable dividend, property whose cost exceeds the amount on which tax has been paid. After also noting that (consistent with the s. 248(1) definition of property) cash, i.e., money, is property , CRA also noted that cash received on a dividend can be used to purchase any other property or even additional shares of the dividend payor, and this results in an increase in the cost amount of the shares of the dividend payor.
Accordingly, cash is property for this purpose.