574. For the purposes of this Title, the participating percentage of a share owned by a taxpayer of the capital stock of a corporation that, at the end of its taxation year, is a controlled foreign affiliate of such taxpayer, is equal to the percentage that would be the taxpayer’s equity percentage in the affiliate at that time on the assumption that he owns no share other than that share, where the affiliate and each other corporation that is relevant to computing the taxpayer’s equity percentage in the affiliate has only one class of issued shares at the end of the taxation year of the affiliate and, in any other case, is determined in prescribed manner.
However, the participating percentage of such a share is nil where the foreign accrual property income of the affiliate for the year, within the meaning of section 579, does not exceed $5,000.
1975, c. 22, s. 153; 1994, c. 22, s. 208; 1997, c. 3, s. 71.