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Appeals dismissed; amounts received from share sales following corporate reorganization deemed dividends under subsection 84(2).
The appellants appealed reassessments under the Income Tax Act for the 2012 taxation year.
The issue was whether amounts received from the sale of shares to an unrelated party following a corporate reorganization were deemed to be dividends under subsection 84(2).
The Tax Court of Canada found that the transactions constituted a distribution or appropriation of corporate funds on the reorganization of the business.
The appeals were dismissed with costs.
