I-3 - Taxation Act

Section 274.1.1 Disposition versions

2021-06-02

274.1.1. Where a property was owned by a trust, whether jointly with another person or otherwise, at the end of 31 December 2016 and continuously thereafter until disposed of by the trust, where the trust was not in its first taxation year that begins after 31 December 2016 a trust described in subparagraph c.1 of the second paragraph of section 274.0.1, where the trust disposes of the property after 31 December 2016 and where the disposition is the trust’s first disposition of the property after that date, the following rules apply:

(a)  section 274.1 does not apply in respect of the disposition; and

(b)  the trust’s gain determined under section 271 in respect of the disposition of the property is equal to the amount by which the aggregate of the following amounts exceeds the amount by which the fair market value of the property on 31 December 2016 exceeds the proceeds of disposition of the property determined without reference to this section:

i.  the trust’s gain calculated in accordance with section 271 on the assumption that

(1)  the trust disposed of the property on 31 December 2016 for proceeds of disposition equal to its fair market value on that date, and

(2)  paragraph a did not apply in respect of the disposition described in subparagraph 1, and

ii.  the trust’s gain in respect of the disposition calculated in accordance with section 271 on the assumption that

(1)  subparagraph i of subparagraph b of the second paragraph of section 271 is read without reference to “one plus”, and

(2)  the trust acquired the property on 1 January 2017 at a cost equal to the proceeds of disposition determined under subparagraph 1 of subparagraph i.

2021, c. 14, s. 41.