| 19(1) | File No. 5-9617 |
| W.C. Harding | |
| (613) 957-8953 |
March 1, 1990
Dear Sirs:
Re: Small Business Investments in RRSPs
This is in reply to your letter of February 2, 1990 requesting confirmation of the Department's position on the determination of the fair market value of small business properties which have related government grants.
Generally this question arises when an individual is contemplating the contribution of shares in a prescribed venture capital corporation to his RRSP. In our opinion the fair market value of such properties at the at the time of their transfer to an RRSP is a question of fact determined on the basis of the sales of such shares on the open market or other such evidence of their value. In the absence of such evidence, the Department has taken the position that their fair market value, where the shares are transferred to an RRSP within 30 days of their acquisition by an individual, would equal to their original cost less the amount of the tax credit received or receivable by the individual.
We trust our comments will be satisfactory to your needs.
Yours truly,
for DirectorFinancial Industries DivisionRulings Directorate