XXXX
Scott Wilson (613)957-8971
October 27, 1987
Dear XXXX
Re: Subsection 12(9)
We are writing in response to your letter of August 12, 1987 requesting a technical interpretation to the effect that subsection 12(9) of the Income Tax Act ("the Act") does not apply in particular circumstances.
The circumstances which you outlined involved a situation where a taxpayer purchases the shares of a corporation and also acquires, at a discount, the non-interest bearing demand debt (shareholder's loan) owed by the corporation to the previous shareholder.
Unfortunately, we are not able to provide you with an opinion that subsection 12(9) of the Act would not apply in those circumstances.
Yours truly,
for Director Financial Industries Division Rulings Directorate Legislative and Intergovernmental Affairs Branch