I-4 - Act respecting the application of the Taxation Act

Section 15 Disposition versions

2019-06-19

15. Where a taxpayer acquired before 1972 depreciable property (other than property that was, at any time, incorporeal capital property within the meaning of the Taxation Act (chapter I-3), as it read at that time) and has owned it without interruption from 31 December 1971 until the time when the taxpayer subsequently disposed of it and the capital cost of such property to the taxpayer is less than its fair market value on valuation day and the proceeds of its disposition, computed without regard to this section, the following rules apply:

(a)  for the purposes of sections 93 to 104 of the Taxation Act (chapter I-3), Title IV of Book III of Part I of the said Act and the regulations made under paragraph a of section 130 of the said Act, the taxpayer is deemed to have obtained as proceeds of disposition of such property an amount equal to the aggregate of its capital cost and of the excess of the proceeds of disposition, so computed, of the property, over its fair market value on valuation day;

(b)  where, following a winding-up, death, other than that of a taxpayer to whom sections 436 to 439 of the Taxation Act apply, or one or more transactions, including a gift, between persons not dealing at arm’s length, the property devolves to a person with whom the taxpayer is so related:

i.  for the purposes of the Taxation Act, other than, where paragraph d.1 of section 99 of that Act applies in determining the capital cost to that person of the property, for the purposes of sections 64, 78.4, 93 to 104, 130 and 130.1 of that Act, that other person is deemed to have acquired the property at a capital cost equal to the proceeds deemed to have been received for the property by the person from whom the property was acquired, and

ii.  for the purposes of this section, such other person is also deemed to have acquired the property before 1972 at a capital cost equal to that of the taxpayer who owned it before 31 December 1971 and who remained the owner of it without interruption from such date until the time when he disposed of it;

(c)  where the disposition occurred because of an election under section 726.9.2 of the Taxation Act, the following rules apply:

i.  for the purposes of the Taxation Act, other than sections 64, 78.4, 93 to 104, 130 and 130.1, the taxpayer is deemed to have reacquired the property at a capital cost equal to

(1)  where the amount designated in respect of the property in the election did not exceed 110% of the fair market value of the property at the end of 22 February 1994, the taxpayer’s proceeds of disposition of the property determined under paragraph a in respect of the disposition of the property that immediately preceded the reacquisition, reduced by the amount by which the amount designated in respect of the property in the election exceeded that fair market value, and

(2)  in any other case, the amount otherwise determined under section 726.9.2 of the Taxation Act to be the cost to the taxpayer of the property immediately after the reacquisition referred to in that section, reduced by the amount by which the fair market value of the property on valuation day exceeded the capital cost of the property at the time it was last acquired before 1 January 1972, and

ii.  for the purposes of this section, the taxpayer’s capital cost of the property after the reacquisition is deemed to be equal to the taxpayer’s capital cost of the property before the reacquisition, and the taxpayer is deemed to have owned the property without interruption from 31 December 1971 until such time after 22 February 1994 as the taxpayer disposes of it.

1972, c. 24, s. 30; 1973, c. 17, s. 140; 1975, c. 22, s. 265; 1996, c. 39, s. 274; 2001, c. 7, s. 170; 2019, c. 14, s. 468.

2001-05-23

15. Where a taxpayer acquired before 1972 depreciable property and has continually remained the owner of it from 31 December 1971 until the time when he has subsequently disposed of it and the capital cost of such property to him is less than its fair market value on valuation day and the proceeds of its disposition, computed without regard to this section, the following rules apply:

(a)  for the purposes of sections 93 to 104 of the Taxation Act (chapter I-3), Title IV of Book III of Part I of the said Act and the regulations made under paragraph a of section 130 of the said Act, the taxpayer is deemed to have obtained as proceeds of disposition of such property an amount equal to the aggregate of its capital cost and of the excess of the proceeds of disposition, so computed, of the property, over its fair market value on valuation day;

(b)  where, following a winding-up, death, other than that of a taxpayer to whom sections 436 to 439 of the Taxation Act apply, or one or more transactions, including a gift, between persons not dealing at arm’s length, the property devolves to a person with whom the taxpayer is so related:

i.  for the purposes of the Taxation Act, other than, where paragraph d.1 of section 99 of that Act applies in determining the capital cost to that person of the property, for the purposes of sections 64, 78.4, 93 to 104, 130 and 130.1 of that Act, that other person is deemed to have acquired the property at a capital cost equal to the proceeds deemed to have been received for the property by the person from whom the property was acquired, and

ii.  for the purposes of this section, such other person is also deemed to have acquired the property before 1972 at a capital cost equal to that of the taxpayer who owned it before 31 December 1971 and who remained the owner of it without interruption from such date until the time when he disposed of it;

(c)  where the disposition occurred because of an election under section 726.9.2 of the Taxation Act, the following rules apply:

i.  for the purposes of the Taxation Act, other than sections 64, 78.4, 93 to 104, 130 and 130.1, the taxpayer is deemed to have reacquired the property at a capital cost equal to

(1)  where the amount designated in respect of the property in the election did not exceed 110% of the fair market value of the property at the end of 22 February 1994, the taxpayer’s proceeds of disposition of the property determined under paragraph a in respect of the disposition of the property that immediately preceded the reacquisition, reduced by the amount by which the amount designated in respect of the property in the election exceeded that fair market value, and

(2)  in any other case, the amount otherwise determined under section 726.9.2 of the Taxation Act to be the cost to the taxpayer of the property immediately after the reacquisition referred to in that section, reduced by the amount by which the fair market value of the property on valuation day exceeded the capital cost of the property at the time it was last acquired before 1 January 1972, and

ii.  for the purposes of this section, the taxpayer’s capital cost of the property after the reacquisition is deemed to be equal to the taxpayer’s capital cost of the property before the reacquisition, and the taxpayer is deemed to have owned the property without interruption from 31 December 1971 until such time after 22 February 1994 as the taxpayer disposes of it.

1972, c. 24, s. 30; 1973, c. 17, s. 140; 1975, c. 22, s. 265; 1996, c. 39, s. 274; 2001, c. 7, s. 170.

1996-10-30

15. Where a taxpayer acquired before 1972 depreciable property and has continually remained the owner of it from 31 December 1971 until the time when he has subsequently disposed of it and the capital cost of such property to him is less than its fair market value on valuation day and the proceeds of its disposition, computed without regard to this section, the following rules apply:

(a)  for the purposes of sections 93 to 104 of the Taxation Act (chapter I-3), Title IV of Book III of Part I of the said act and the regulations made under paragraph a of section 130 of the said act, the taxpayer is deemed to have obtained as proceeds of disposition of such property an amount equal to the aggregate of its capital cost and of the excess of the proceeds of disposition, so computed, of the property, over its fair market value on valuation day;

(b)  where, following a winding-up, death, other than that of a taxpayer to whom sections 436 to 439 of the Taxation Act apply, or one or more transactions, including a gift, between persons not dealing at arm’s length, the property devolves to a person with whom the taxpayer is so related:

i.  for the purposes of the Taxation Act, other than, where paragraph d.1 of section 99 of that Act applies in determining the capital cost to that person of the property, for the purposes of sections 64, 78.4, 93 to 104, 130 and 130.1 of that Act, that other person is deemed to have acquired the property at a capital cost equal to the proceeds deemed to have been received for the property by the person from whom the property was acquired, and

ii.  for the purposes of this section, such other person is also deemed to have acquired the property before 1972 at a capital cost equal to that of the taxpayer who owned it before 31 December 1971 and who remained the owner of it without interruption from such date until the time when he disposed of it; and

(c)  where the taxpayer is deemed to have reacquired the property under section 726.9.2 of the Taxation Act,

i.  for the purposes of the Taxation Act, other than, where paragraph d.1 of section 99 of that Act applies in determining the capital cost to the taxpayer of the property, for the purposes of sections 64, 78.4, 93 to 104, 130 and 130.1 of that Act, the taxpayer is deemed to have reacquired the property at a capital cost equal to the taxpayer’s proceeds of disposition of the property determined under paragraph a in respect of the disposition that immediately preceded the reacquisition, and

ii.  for the purposes of this section, the taxpayer’s capital cost of the property after the reacquisition is deemed to be equal to the taxpayer’s capital cost of the property before the reacquisition, and the taxpayer is deemed to have owned the property without interruption from 31 December 1971 until such time after 22 February 1994 as the taxpayer disposes of it.

1972, c. 24, s. 30; 1973, c. 17, s. 140; 1975, c. 22, s. 265; 1996, c. 39, s. 274.

1977-12-31

15. Where a taxpayer acquired before 1972 depreciable property and has continually remained the owner of it from 31 December 1971 until the time when he has subsequently disposed of it and the capital cost of such property to him is less than its fair market value on valuation day and the proceeds of its disposition, computed without regard to this section, the following rules apply:

(a)  for the purposes of sections 93 to 104 of the Taxation Act, Title IV of Book III of Part I of the said act and the regulations made under paragraph a of section 130 of the said act, the taxpayer is deemed to have obtained as proceeds of disposition of such property an amount equal to the aggregate of its capital cost and of the excess of the proceeds of disposition, so computed, of the property, over its fair market value on valuation day; and

(b)  where, following a winding-up, death, other than that of a taxpayer to whom sections 436 to 439 of the Taxation Act apply, or one or more transactions, including a gift, between persons not dealing at arm’s length, the property devolves to a person with whom the taxpayer is so related:

i.  this other person is deemed, for the purposes of the sections, the title and regulations contemplated in paragraph a, to have acquired it at a capital cost equal to the proceeds deemed to have been received by the person from whom it was acquired; and

ii.  for the purposes of this section, such other person is also deemed to have acquired the property before 1972 at a capital cost equal to that of the taxpayer who owned it before 31 December 1971 and who remained the owner of it without interruption from such date until the time when he disposed of it.

1972, c. 24, s. 30; 1973, c. 17, s. 140; 1975, c. 22, s. 265.