I-3 - Taxation Act

Section 175.15 Disposition versions

2020-09-24

175.15. The presumption provided for in the second paragraph applies where

(a)  at any time in a particular taxation year of a transferor, a position referred to in any of subparagraphs ii to iv of subparagraph a of the fourth paragraph of section 175.12 (in this section referred to as the “gain position”) is held by a connected person;

(b)  the connected person disposes of the gain position in the particular taxation year; and

(c)  the taxation year of the connected person in which the disposition referred to in subparagraph b occurs ends after the end of the particular taxation year.

Where the conditions of the first paragraph are met, the portion of the profit, if any, realized from the disposition of the gain position referred to in subparagraph b of the first paragraph that is determined by the following formula is deemed, for the purposes of the definition of “unrecognized profit” in section 175.11 and the second paragraph of section 175.12, to be unrecognized profit in respect of the gain position until the end of the taxation year of the connected person in which the disposition occurs:

A × B / C.

In the formula in the second paragraph,

(a)  A is the amount of the profit otherwise determined;

(b)  B is the number of days in the taxation year of the connected person in which the disposition referred to in subparagraph b of the first paragraph occurs that are after the end of the particular taxation year; and

(c)  C is the total number of days in the taxation year of the connected person in which the disposition referred to in subparagraph b of the first paragraph occurs.

2020, c. 16, s. 46.