2004 Ruling 2004-0088541R3 - Loss utilization -- summary under Subsection 245(4)

Loss utilization transactions in a related group of companies under which Profitco transfers its promissory note of a wholly-owned subsidiary of Profitco ("Subco") to a sister company with losses ("Lossco") in consideration for Class A preferred shares of Lossco, and Profitco then transfers the Class A preferred shares to Subco in exchange for Class AA preferred shares of Subco. Ruling that s. 245(2) will not apply.