Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
Principal Issues: Amendment to Ruling to add a Put option on the acquisition of the Partnership interest
Position: OK it will not affect the rulings given
Reasons:
XXXXXXXXXX XXXXXXXXXX 981570 XXXXXXXXXX
Attention: XXXXXXXXXX
XXXXXXXXXX, 1998
Dear Sirs:
Re: XXXXXXXXXX
XXXXXXXXXX
XXXXXXXXXX
We are writing in response to your facsimiles of XXXXXXXXXX and our telephone conversations with XXXXXXXXXX of your office wherein you have requested certain amendments to our Ruling letter #971805 dated XXXXXXXXXX, 1997 (the "Ruling") and request confirmation that the amendments will not impact on the rulings given in the Ruling.
In accordance with your request, paragraph 19 of the aforementioned Ruling is amended to read as follows:
XXXXXXXXXX will establish the Partnership by contributing $XXXXXXXXXX respectively. In return for these contributions, XXXXXXXXXX will receive a XXXXXXXXXX % interest in the profits and losses of the Partnership, respectively. This allocation reflects the operating efforts that XXXXXXXXXX will contribute to the Partnership in the development and resale of the XXXXXXXXXX Properties. XXXXXXXXXX will have the right to acquire XXXXXXXXXX interest in the Partnership at its fair market value at the time of winding up the Partnership and as consideration will issue such number of XXXXXXXXXX shares equal to the value of XXXXXXXXXX interest in the Partnership. In the event that XXXXXXXXXX does not exercise its right to acquire XXXXXXXXXX interest in the Partnership, XXXXXXXXXX will have the right to request that XXXXXXXXXX acquire its interest in the Partnership at its fair market value at the time of winding up the Partnership and XXXXXXXXXX will issue as consideration, such number of XXXXXXXXXX shares equal to the value of XXXXXXXXXX interest in the Partnership. XXXXXXXXXX will elect to have this transfer take place pursuant to section 85.
We confirm that the above amendment will not affect the rulings given and that they will continue to be binding on Revenue Canada in the manner set forth therein.
Yours truly,
for Director
Financial Industries Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch