Section 689 | Amount A

(1)In section 688, amount A is the lower of—

(a)the amount of the company's capital immediately before the change in ownership, and

(b)the highest 60 day minimum amount for the pre-change year.

(2)The highest 60 day minimum amount for the pre-change year is found as follows.

Step 1 Find the daily amounts of the company's capital over the pre-change year.

Step 2 Take the highest of the daily amounts.

Step 3 Find out whether there was in the pre-change year a period of at least 60 days in which there was no daily amount lower than the amount taken.

Step 4 If there was, the amount taken is the highest 60 day minimum amount for the pre-change year. If there was not, take the next highest of the daily amounts and repeat step 3; and so on, until the highest 60 day minimum amount for the pre-change year is found.

(3)In this section “the pre-change year” means the period of one year ending immediately before the change in ownership.