With respect to the application of ITA 87 to amalgamations, which of the following statements is correct?

Question

Quizplus · Accepted Answer

In an amalgamation, the depreciable capital property of the predecessor companies will be carried forward to the tax records of the amalgamated company at their undepreciated capital cost (UCC) values. This means that the amalgamated company will continue to depreciate the assets at the same rate as the predecessor companies. There is no "bump-up" of the asset values, which means that any potential tax savings from increasing the value of the assets are not available. Capital dividend accounts can be carried forward, and losses of the predecessor companies can be used to offset taxable income of the amalgamated company in the taxation year that includes the date of amalgamation or any taxation year that begins after that date.

With Respect to the Application of ITA 87 to Amalgamations