Exceptions from Subsection 55(2) - CCH Canadian

Spin-off Butterfly — Basics StepsTransfer of Property to TC = “Distribution”100%commonShareholder(s)40% common60%commonTransfereepreferredDCAsset 1 S85 tax-deferred Asset 2• DC transfers 40% of its net assets (Asset 1) to Transferee on rollover basis• DC receives preferred shares of Transferee• The transfer of property is called the “distribution”© 2010 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is aSwiss entity with which the independent member firms of the KPMG network are affiliated 25