I-3, r. 1 - Regulation respecting the Taxation Act

Section 844.3r1 Disposition versions

2012-09-01

844.3R1. For the purposes of the first paragraph of section 844.3 of the Act, the amount prescribed in respect of an insurer’s cost or capital cost of a property for a period in a taxation year is the amount determined by the formula

[(A × B) × C / 365] – D.

In the formula in the first paragraph,

(a)  A is the average annual rate of interest computed on the basis of the rate determined in accordance with subparagraph i of paragraph a of section 4301 of the Income Tax Regulations made under the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)) for the months or portions thereof in the period;

(b)  B is the amount by which the average cost or average capital cost, as the case may be, of the property for the period exceeds the average amount of the debt, related to the acquisition of the property, that is outstanding during the period and that bears interest at the market rate and, for that purpose

i.  the average cost or average capital cost, as the case may be, of a property is the total of

(1)  the aggregate of the amounts each of which is the cost or capital cost, as the case may be, of the property immediately before the beginning of the period, and

(2)  the aggregate of the amounts each of which is the proportion of an expenditure incurred on any date in the period, in respect of the cost or capital cost, as the case may be, of the property, that the number of days from that date to the end of the period is of the number of days in the period, and

ii.  the average amount of the debt related to the acquisition of a property is the amount by which the aggregate of the following amounts exceeds the aggregate of the amount each of which is the proportion of an amount, other than an amount of interest, that was paid in respect of a debt referred to in subparagraph 1 or 2 at any date in the period, that the number of days from that date to the end of the period is of the number of days in the period:

(1)  the aggregate of the amounts each of which is a debt that is outstanding at the beginning of the period and is related to the acquisition, and

(2)  the aggregate of the amounts each of which is the proportion of a debt related to the acquisition that was incurred at any date in the period, that the number of days from that date to the end of the period is of the number of days in the period;

(c)  C is the number of days in the period; and

(d)  D is the income derived from the property in the period by the person or partnership that owned the property.

s. 844.3R1; O.C. 91-94, s. 101; O.C. 35-96, s. 86; O.C. 1707-97, s. 98; O.C. 1466-98, s. 126; O.C. 1463-2001, s. 121; O.C. 134-2009, s. 1.