A professional partnership (“SENC”) with three members disposes of all the shares of the services corporation ("Serviceco" - rendering services to the partners and their clients) to a corporation ("Opco") owned by one of the partners for $600,000 and realizes a capital gain of $600,000. Serviceco would then be wound-up into Opco, and Opco would ultimately pay the $600,000 sake price. CRA indicated:
[The] scheme of the Act requires that a distribution of property from a corporation to its shareholders, regardless of the form of the distribution, be treated as income at the shareholder level, and not as a capital gain. Depending on the facts and circumstances … [CRA] would consider the application of subsection 245(2) to redetermine the tax consequences of the transactions described above and to recharacterize the proceeds received by SENC as a dividend.