Page 41 - MAC4861_2 Finance class slides part 2

BUSINESSES IN DIFFICULTY

Liquidations & Tax implications

• One of the options available to an entity

experiencing financial distress is to liquidate the

entity.

• This process involves terminating the existence of the

entity.

• The corporate rules, which are covered in sections

41–47 of the Income Tax Act, should be considered.

Section 44 specifically deals with transactions

relating to an amalgamation and section 47

specifically deals with transactions relating to

liquidations.

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