If a winding-up described in subsection 88(1) commences at any time (referred to in this subsection as the “commencement time”) and the parent and the subsidiary referred to in that subsection would, in the absence of this subsection, have different tax reporting currencies at the commencement time, the following rules apply for the purposes of determining the subsidiary’s Canadian tax results for its taxation years that end after the commencement time:
If a winding-up described in subsection 88(1) commences at any time (referred to in this subsection as the “commencement time”) and the parent and the subsidiary referred to in that subsection would, in the absence of this subsection, have different tax reporting currencies at the commencement time, the following rules apply for the purposes of determining the subsidiary’s Canadian tax results for its taxation years that end after the commencement time:
Where the parent would not, in a taxation year of the parent ending after the time the subsidiary was wound up, satisfy the requirements of paragraph (3)(e) because the last functional currency year of the subsidiary referred to in subsection (12) in respect of the winding-up is, because of paragraph (15)(a), the last functional currency year of the parent, paragraph (15)(a) shall not apply, for the purposes of paragraph (3)(e), to the parent in respect of the subsidiary if the total of all amounts each of which is the cost amount, at the end of the taxation year of the parent in which the property of the subsidiary was distributed to the parent in the course of winding-up, to the parent of a property that was distributed to the parent on the winding-up (or property substituted for such property) is less than 50% of the total of all amounts each of which is the cost amount, at the end of that taxation year, to the parent of a property of the parent.