In 2012-0449371I7, the Canada Revenue Agency (CRA) confirmed that a both an upstream and a downstream absorptive merger under US corporate law would qualify for tax-deferred (rollover) treatment under proposed new s. 87(8.2). The facts involved a Canadian company (Canco) that owned a corporation in the US (FA 1), which in turn owned another corporation in the US (FA 2). Under a so-called downstream absorptive merger in the US undertaken in 2006, FA 1 merged into FA 2. FA 1 disappeared in the merger; FA 2 was the surviving corporation. Before FA 1 disappeared, it distributed all its shares of FA 2 to Canco and transferred all its remaining assets to FA 2. In 2012-0449371I7, the Rulings Division of the CRA advised a Local Tax Services Office that this downstream abortive merger qualified as a fully tax-deferred rollover under proposed new s. 87(8.2). The latter rule, once enacted, will have retroactive application going back to 1994.