An amalgamation is the combination of two or more corporations into a single continuing corporation under corporate law. Section 87 of the Income Tax Act provides tax rules for a qualifying amalgamation, generally allowing the predecessor corporations' tax attributes to flow into the amalgamated corporation on a rollover basis rather than triggering a disposition.
On a qualifying amalgamation, property generally carries over at its existing tax cost, and many attributes — such as loss carryforwards and reserve balances — continue, subject to the loss-restriction rules where there is an acquisition of control. A deemed year-end occurs at the amalgamation. Amalgamations are used to simplify corporate groups, combine related businesses, and position a group for later planning, with careful attention to the survival of losses and refundable-tax balances.