In indicating that a deemed capital gain resulting from the application of s. 55(2)(b) or 55(2)(c) can be considered to be a gain from the disposition of an active asset for purposes of s. 125(5.1) and the definition of "adjusted aggregate investment income" in s. 125(7) where, in fact, the shares were active assets, CRA stated:
[T[he term "capital property" in paragraph 55(2)(c) includes a share and that a deemed gain under paragraph 55(2)(c) could represent a capital gain from the disposition of property that would, at the time of payment of the dividend (footnote 1), be an active asset of the corporation receiving the dividend for the purposes of the definition of "adjusted aggregate investment income" and paragraph (b) of the definition of "active asset" in subsection 125(7), if all of the conditions in paragraph (b) of the definition "active asset" in subsection 125(7) are otherwise satisfied in respect of the share on which the taxable dividend subject to subsection 55(2) was paid.
Accordingly, the deemed gains that so qualified would not reduce the business limit.