•Automatically
becomes a taxable entity
•A deemed year end for the corporation is created and corporation deemed to have disposed of and reacquired all of the corporation’s assets for fair market value [paragraph 149(10) of the ITA]
•It also affects the corporation’s ability to carry forward losses and other balances or reserves
•Members of an unincorporated NPO would become responsible for any taxable income in the organization (CRA Document 2010-036970)
•Document 2010-035583 provides a recent discussion
•