112(2.1), 112(2.2) or 112(2.4), or section 187.2 or 187.3 or subsection 258(3) or 258(5)

All of the above works to distinguish the facts of the present matter from Capancini and Morasse where, in each case, the Court found that the shares received by the taxpayer had never been owned by the distributing parent company and did not, therefore, come within the meaning of “dividend in kind”. Here, the documentary evidence does nothing to refute the Minister’s assumption that Tyco International did own the Tyco Electronics and Covidien shares it ultimately distributed, thus putting the Appellant’s case on the same factual footing as Hamley and bringing it within Justice Hershfield’s analysis set out above at paragraph 7 of these Reasons. In these circumstances, there is no justification for the Court to interfere with the Minister’s reassessment.

While it is not clear exactly how the facts were presented in Capancini, I believe that the Tyco transactions are distinguishable from the circumstances in Morasse.

(c) in any other case, the amount of any stock dividend is the amount by which the paid-up capital of the corporation that paid the dividend is increased by reason of the payment of the dividend; (montant)

But do the America Movil securities represent underlying profits of Telmex? What does the $12,432 reflect? Was there a corresponding decline in the value of the Telmex shares which offset the "value" received by Ms. Morasse in the form of the America Movil shares? In an annual report that Telmex filed with US Securities and Exchange Commission on August 23, 2001,[4] the trading history of Telmex ADS for the months of February and March 2001 showed a decline from a high of $54 to approximately $34 a share. Recall that the spin-off took place in February 2001. Ms. Morasse held 400 Telmex ADRs and therefore suffered a drop in the value at that time of approximately US$8,000. Presuming an exchange rate of approximately one and one-half to one, this amounts to roughly $12,000 or just shy of the value the Respondent has attributed as income of Ms. Morasse on receipt of the America Movil shares.