RSM424H1 Lecture 14: Chapter 14-2
11 Jun 2017
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Document Summary
The wind-up of a subsidiary corporation involves the transfer of all of the assets of the subsidiary to its parent corporation, followed by the termination of the subsidiary"s existence o. The tax treatment of a wind-up is similar to that of an amalgamation. In most cases, no tax occurs on the transfer of assets from the subsidiary to the parent, as the transfer price is considered to be equal to the tax values of the assets transferred. Any tax accounts of the subsidiary become available to the parent. Accumulated unused losses of the subsidiary are transferred to the parent and continue to be carried forward under the same restrictions, if any, that were imposed on the subsidiary o o. The parent is prohibited from claiming the losses of the subsidiary until the taxation year following the taxation year in which the wind-up occurred.
