Principal Issues: 1. Whether capital gains are to be included in the determination of "income" for purposes of paragraph (c) of the "excluded shares" definition in subsection 120.4(1). 2. If capital gains are to be included, what would constitute a corporation's gross income with respect to those gains?
Position: 1. Taxable capital gains are to be included in determining the income of a corporation under paragraph (c) of the "excluded shares" definition. 2. Only the amount of a corporation's taxable capital gains for the year, without considering offsetting allowable capital losses, if any, is to be included.
Reasons: See below.