15 January 2007 Internal T.I. 2006-0216801I7 - Redemption of US $ Denominated Shares -- summary under Subsection 39(2)

The redemption of U.S.-dollar denominated preferred shares of the taxpayer gave rise to a capital loss under s. 39(2). However, the Directorate noted its previous comments that MacMillan Bloedel “deals with the redemption of redeemable and retractable preferred shares, which may be viewed as similar to the repayment of a debt obligation” and it is “not prepared to extend the reasoning to a redemption of shares in general.”