I came across a S85 internal rollover for company value freeze where common shares are transferred to the corp in exchange for preferred shares. In that example, a capital gain is calculated on the c.s but no deemed dividend. Aren’t we supposed to calculate 84(3) div prior to the capital gain since it is a redemption?
What year did this occur?
Depending on your answer, this might be a surplus strip .. which aren’t allowed anymore, or it could be an internal crystallization (to trigger LCGE). I can’t confirm any further without knowing more details.
You are correct. This is an example of crystallization for LCGE, and the materials date back more than 10 years. I’m not sure if this technique is still applicable..