Shareholders of predecessor corporations that amalgamate are deemed to have disposed of their shares for proceeds equal to the adjusted cost base of the shares as long as certain conditions are met. Which of the following is NOT one of the necessary conditions?

Question

Quizplus · Accepted Answer

The necessary conditions for shareholders of predecessor corporations that amalgamate to be deemed to have disposed of their shares for proceeds equal to the adjusted cost base of the shares are:
A) The shareholders must not receive any consideration other than shares of the amalgamated company.
B) The original shares must be capital property of the shareholders.
D) The amalgamation must not result in a deemed gift to a person related to the shareholders.
Option C states that the shareholders must receive non-share consideration that is equal to the adjusted cost base of their shares, which is incorrect as the shareholders must not receive any consideration other than shares of the amalgamated company.

Shareholders of Predecessor Corporations That Amalgamate Are Deemed to Have