11 October 2013 APFF Roundtable Q. 18, 2013-0495851C6 F - Safe income adjustments -- summary under Adjusted Cost Base

Buyco acquired all the shares of Opco on 15 January 2010 from Sellco. A CRA audit resulted in a 2011 reasessment to increase Opco's income for its 2008 and 2009 years. CRA stated (TaxInterpretations translation):

In the situation where the agreement of purchase and sale contains an adjustment clause to the price for the shares payable by Buyco by reason of a reassessment sustained by Opco, the amount received by Buyco by reason of the price adjustment clause, in general, would reduce the acquisition cost of the shares of Opco.

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