Personal Finance

What is Joint Tax Election

  • Last Updated:
  • Jul 20th, 2011 11:25 pm
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Sr. Member
Apr 9, 2008
542 posts
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Toronto

What is Joint Tax Election

Anyone knows about Joint tax election?

Thanks to Canada Post, I just received the and that I have to make a decision by noon July 21. Do not have time to do the full research.

so here is what happened. AOI.TO bought LEO.TO, so now i have the option to make a Joint Tax Election.

I have a huge capital loss. According to letter, does that mean if I elect for Joint Tax, my shares deemed to be disposed?

http://www.tdwaterhouse.ca/common/corp_ ... 272011.pdf

"AOC has agreed to make a Tax Election pursuant to section 85 of the ITA (and any similar provision of any
provincial tax legislation) with each Eligible Holder at the elected amount (the “Elected Amount”) determined
by the Resident Holder, subject to the limitations set out in section 85 of the ITA (and any applicable provincial
tax legislation).
3. Where a valid Tax Election is filed:
(a) Lion Shares that are the subject of the Tax Election will be deemed to be disposed of by the Resident
Holder for proceeds of disposition equal to the Elected Amount. Subject to the limitations set out in section 85
of the ITA regarding the Elected Amount, if the Elected Amount in respect of such Lion Shares exceeds the
aggregate of the adjusted cost base and any reasonable costs of disposition, the Resident Holder will realize
a capital gain in the amount of such excess.
(b) The aggregate adjusted cost base to the Resident Holder of the AOC Shares acquired in exchange for the
Lion Shares will be equal to the Elected Amount, and that cost will be averaged with the adjusted cost base of
any other AOC Shares held by the Resident Holder as capital property at that time for purposes of
determining the Resident Holder’s adjusted cost base of such shares.
The Elected Amount may not be less than the adjusted cost base to the Eligible Holder of such Lion shares at
the time of disposition. The Elected Amount may not be greater than the fair market value of such Lion Shares
at the time of disposition. An Elected Amount that does not comply with these limitations will automatically be
adjusted under the ITA so that it is in compliance."
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