(iv) the type and fair market value of each property distributed to residents of Canada,
	(v) the name and address of each resident of Canada that received property with respect to the distribution,
	(vi) in the case of a distribution that is not prescribed, that the distribution is not taxable under the United States Internal Revenue Code applicable to the distribution,
	(vii) in the case of a distribution that is prescribed, that the distribution is not taxable under the law of the foreign country, and
	(viii) such other matters that are required, in prescribed form; and
	(f) except where Part XI applies in respect of the taxpayer, the taxpayer elects in writing filed with the taxpayer's return of income for the taxation year in which the distribution occurs (or, in the case of a distribution received before October 18, 2000, filed with the Minister before July 2001) that this section apply to the distribution and provides information satisfactory to the Minister
	(i) of the number, cost amount (determined without reference to this section) and fair market value of the taxpayer's original shares immediately before the distribution,
	(ii) of the number, and fair market value, of the taxpayer's original shares and the spin-off shares immediately after the distribution of the spin-off shares to the taxpayer,
	(iii) except where the election is filed with the taxpayer's return of income for the year in which the distribution occurs, concerning the amount of the distribution, the manner in which the distribution was reported by the taxpayer and the details of any subsequent disposition of original shares or spin-off shares for the purpose of determining any gains or losses from those dispositions, and
	(iv) of such other matters that are required, in prescribed form.
Cost adjustments	(3) Where a spin-off share is distributed by a corporation to a taxpayer pursuant to an eligible distribution with respect to an original share of the taxpayer,
	(a) there shall be deducted for the purpose of computing the cost amount to the taxpayer of the original share at any time the amount determined by the formula
	A x (B/C)
	where
	A is the cost amount, determined without reference to this section, to the taxpayer of the original share at the time that is immediately before the distribution or, if the original share is disposed of by the taxpayer, before the distribution, at the time that is immediately before its disposition,
	B is the fair market value of the spin-off share immediately after its distribution to the taxpayer, and
	C is the total of
	(i) the fair market value of the original share immediately after the distribution of the spin-off share to the taxpayer, and
	(ii) the fair market value of the spin-off share immediately after its distribution to the taxpayer; and
	(b) the cost to the taxpayer of the spin-off share is the amount by which the cost amount of the taxpayer's original share was reduced as a result of paragraph (a).
Inventory	(4) For the purpose of calculating the value of the property described in an inventory of a taxpayer's business,
	(a) an eligible distribution to the taxpayer of a spin-off share that is included in the inventory is deemed not to be an acquisition of property in the fiscal period of the business in which the distribution occurs; and
	(b) for greater certainty, the value of the spin-off share is to be included in computing the value of the inventory at the end of that fiscal period.
Reassess- ments	(5) Notwithstanding subsections 152(4) to (5), the Minister may make at any time such assessments, reassessments, determinations and redeterminations that are necessary where information is obtained that the conditions in subparagraph (2)(c)(iii) or (d)(iii) are not, or are no longer, satisfied.
	(2) Subsection (1) applies to distributions received after 1997, except that
	(a) information referred to in paragraph 86.1(2)(e) of the Act, as enacted by subsection (1), is deemed to be provided to the Minister of National Revenue on a timely basis if it is provided to that Minister before the day that is 90 days after the day on which this Act receives royal assent; and
	(b) the election referred to in paragraph 86.1(2)(f) of the Act, as enacted by subsection (1), is deemed to be filed on a timely basis if it is filed with the Minister of National Revenue before the day that is 90 days after the day on which this Act receives royal assent.
	65. (1) Subsection 87(1.2) of the Act is replaced by the following:
New corporation continuation of a predecessor	(1.2) Where there has been an amalgamation of corporations described in paragraph (1.1)(a) or of two or more corporations each of which is a subsidiary wholly-owned corporation of the same person, the new corporation is, for the purposes of section 29 of the Income Tax Application Rules, subsection 59(3.3) and sections 66, 66.1, 66.2, 66.21, 66.4 and 66.7, deemed to be the same corporation as, and a continuation of, each predecessor corporation, except that this subsection does not affect the determination of any predecessor corporation's fiscal period, taxable income or tax payable.
	(2) Subparagraph 87(2)(u)(ii) of the Act is replaced by the following:
	(ii) for the purposes of subsections 93(2) to (2.3), any exempt dividend received by the predecessor corporation on any such share is deemed to be an exempt dividend received by the new corporation on the share;
	(3) The portion of subsection 87(8) of the Act before paragraph (a) is replaced by the following:
Foreign merger	(8) Subject to subsection 95(2), where there has been a foreign merger in which a taxpayer's shares or options to acquire shares of the capital stock of a corporation that was a predecessor foreign corporation immediately before the merger were exchanged for or became shares or options to acquire shares of the capital stock of the new foreign corporation or the foreign parent corporation, unless the taxpayer elects in the taxpayer's return of income for the taxation year in which the foreign merger took place not to have this subsection apply, subsections (4) and (5) apply to the taxpayer as if the references in those subsections to
	(4) Subsection 87(8.1) of the Act is replaced by the following:
Definition of ``foreign merger''	(8.1) For the purposes of this section, ``foreign merger'' means a merger or combination of two or more corporations each of which was, immediately before the merger or combination, resident in a country other than Canada (each of which is in this section referred to as a ``predecessor foreign corporation'') to form one corporate entity resident in a country other than Canada (in this section referred to as the ``new foreign corporation'') in such a manner that, and otherwise than as a result of the distribution of property to one corporation on the winding-up of another corporation,
	(a) all or substantially all the property (except amounts receivable from any predecessor foreign corporation or shares of the capital stock of any predecessor foreign corporation) of the predecessor foreign corporations immediately before the merger or combination becomes property of the new foreign corporation as a consequence of the merger or combination;
	(b) all or substantially all the liabilities (except amounts payable to any predecessor foreign corporation) of the predecessor foreign corporations immediately before the merger or combination become liabilities of the new foreign corporation as a consequence of the merger or combination; and
	(c) all or substantially all of the shares of the capital stock of the predecessor foreign corporations (except any shares or options owned by any predecessor foreign corporation) are exchanged for or become, because of the merger or combination,
	(i) shares of the capital stock of the new foreign corporation, or
	(ii) if, immediately after the merger, the new foreign corporation was controlled by another corporation (in this section referred to as the ``foreign parent corporation'') that was resident in a country other than Canada, shares of the capital stock of the foreign parent corporation.
	(5) The portion of subsection 87(10) of the Act after paragraph (f) is replaced by the following:
	the new share is deemed, for the purposes of subsection 116(6), the definitions ``qualified investment'' in subsections 146(1), 146.1(1), and 146.3(1) and in section 204, and the definition ``taxable Canadian property'' in subsection 248(1), to be listed on the exchange until the earliest time at which it is so redeemed, acquired or cancelled.
	(6) Subsection (1) applies to amalgamations that occur after 2000.
	(7) Subsection (2) applies after November 1999.
	(8) Subsections (3) and (4) apply to mergers and combinations that occur after 1995 and, where a taxpayer notifies the Minister of National Revenue in writing before the taxpayer's filing-due date for the taxation year in which this Act receives royal assent that the taxpayer makes the election referred to in subsection 87(8) of the Act, as enacted by subsection (3), in respect of a merger or combination that occurred before 1999, the election is deemed to have been validly made in respect of the merger or combination.
	(9) Subsection (5) applies after October 1, 1996.
	66. (1) The portion of subclause 88(1)(c)(vi)(B)(III) of the Act before sub-subclause 1 is replaced by the following:
	(III) a corporation (other than a specified person or the subsidiary)
	(2) Clause 88(1)(c.2)(iii)(A) of the Act is replaced by the following:
	(A) the reference in the definition ``specified shareholder'' in subsection 248(1) to ``the issued shares of any class of the capital stock of the corporation or of any other corporation that is related to the corporation'' shall be read as ``the issued shares of any class (other than a specified class) of the capital stock of the corporation or of any other corporation that is related to the corporation and that has a significant direct or indirect interest in any issued shares of the capital stock of the corporation'', and
	(3) Subsection 88(1) of the Act is amended by adding the following after paragraph (c.7):
	(c.8) for the purpose of clause (c.2)(iii)(A), a specified class of the capital stock of a corporation is a class of shares of the capital stock of the corporation where
	(i) the paid-up capital in respect of the class was not, at any time, less than the fair market value of the consideration for which the shares of that class then outstanding were issued,
	(ii) the shares are non-voting in respect of the election of the board of directors of the corporation, except in the event of a failure or default under the terms or conditions of the shares,
	(iii) under neither the terms and conditions of the shares nor any agreement in respect of the shares are the shares convertible into or exchangeable for shares other than shares of a specified class of the capital stock of the corporation, and
	(iv) under neither the terms and conditions of the shares nor any agreement in respect of the shares is any holder of the shares entitled to receive on the redemption, cancellation or acquisition of the shares by the corporation or by any person with whom the corporation does not deal at arm's length an amount (excluding any premium for early redemption) greater than the total of the fair market value of the consideration for which the shares were issued and the amount of any unpaid dividends on the shares;
	(4) Subsection 88(1.5) of the Act is replaced by the following:
Parent continuation of subsidiary	(1.5) For the purposes of section 29 of the Income Tax Application Rules, subsection 59(3.3) and sections 66, 66.1, 66.2, 66.21, 66.4 and 66.7, where the rules in subsection (1) applied to the winding-up of a subsidiary, its parent is deemed to be the same corporation as, and a continuation of, the subsidiary.
	(5) The portion of subsection 88(4) of the Act before paragraph (a) is replaced by the following:
Amalgama- tion deemed not to be acquisition of control	(4) For the purposes of paragraphs (1)(c), (c.2), (d) and (d.2) and, for greater certainty, paragraphs (c.3) to (c.8) and (d.3),
	(6) Subsections (1) to (3) and (5) apply to windings-up that begin after November 1994.
	(7) Subsection (4) applies to windings-up that occur after 2000.
	67. (1) Clause (a)(i)(A) of the definition ``capital dividend account'' in subsection 89(1) of the Act is replaced by the following:
	(A) the amount of the corporation's capital gain from a disposition (other than a disposition that is the making of a gift after December 8, 1997 that is not a gift described in subsection 110.1(1)) of a property in the period beginning at the beginning of its first taxation year (that began after the corporation last became a private corporation and that ended after 1971) and ending immediately before the particular time (in this definition referred to as ``the period'')
	(2) Paragraph (c) of the definition ``capital dividend account'' in subsection 89(1) of the Act is replaced by the following:
	(c) the total of all amounts each of which is an amount required to have been included under this paragraph as it read in its application to a taxation year that ended before February 28, 2000,
	(c.1) the amount, if any, by which
	(i) 1/2 of the total of all amounts each of which is an amount required by paragraph 14(1)(b) to be included in computing the corporation's income in respect of a business carried on by the corporation for a taxation year that is included in the period and that ended after February 27, 2000 and before October 18, 2000,
	exceeds
	(ii) where the corporation has deducted an amount under subsection 20(4.2) in respect of a debt established by it to have become a bad debt in a taxation year that is included in the period and that ended after February 27, 2000 and before October 18, 2000, or has an allowable capital loss for such a year because of the application of subsection 20(4.3), the amount determined by the formula
	V + W
	where
	V is 1/2 of the value determined for A under subsection 20(4.2) in respect of the corporation for the last such taxation year that ended in the period, and
	W is 1/3 of the value determined for B under subsection 20(4.2) in respect of the corporation for the last such taxation year that ended in the period, and
	(iii) in any other case, nil,
	(c.2) the amount, if any, by which
	(i) the total of all amounts each of which is an amount required by paragraph 14(1)(b) to be included in computing the corporation's income in respect of a business carried on by the corporation for a taxation year that is included in the period and that ends after October 17, 2000,
	exceeds
	(ii) where the corporation has deducted an amount under subsection 20(4.2) in respect of a debt established by it to have become a bad debt in a taxation year that is included in the period and that ends after October 17, 2000, or has an allowable capital loss for such a year because of the application of subsection 20(4.3), the amount determined by the formula
	X + Y
	where
	X is the value determined for A under subsection 20(4.2) in respect of the corporation for the last such taxation year that ended in the period, and
	Y is 1/3 of the value determined for B under subsection 20(4.2) in respect of the corporation for the last such taxation year that ended in the period, and
	(iii) in any other case, nil,
	(3) The definition ``capital dividend account'' in subsection 89(1) of the Act is amended by striking out the word ``and'' at the end of paragraph (d) and by adding the following after paragraph (e):
	(f) all amounts each of which is an amount in respect of a distribution made in the period by a trust to the corporation in respect of capital gains of the trust equal to the lesser of
	(i) the amount, if any, by which