I-3 - Taxation Act

Section 736.0.0.1 Disposition versions

2017-02-08

736.0.0.1. For the purposes of section 736, if at a particular time a taxpayer owes a foreign currency debt in respect of which the taxpayer would have had, if the foreign currency debt had been repaid at that time, a capital loss or gain, the taxpayer is deemed to own at the time (in this section referred to as the “measurement time”) that is immediately before the particular time a property

(a)  the adjusted cost base of which at the measurement time is equal to the amount determined by the formula

A + B - C; and

(b)  the fair market value of which is equal to the amount that would be the amount of principal owed by the taxpayer under the foreign currency debt at the measurement time if that amount were calculated using the exchange rate applicable at the time of the original borrowing.

In the formula in subparagraph a of the first paragraph,

(a)  A is the amount of principal owed by the taxpayer under the foreign currency debt at the measurement time, calculated using the exchange rate applicable at that time;

(b)  B is the portion of any gain, previously recognized in respect of the foreign currency debt because of this Title, that is reasonably attributable to the amount determined under subparagraph a; and

(c)  C is the portion of any capital loss, previously recognized in respect of the foreign currency debt because of this Title, that is reasonably attributable to the amount determined under subparagraph a.

2010, c. 5, s. 56; 2017, c. 1, s. 177.

2010-04-20

736.0.0.1. For the purposes of section 736, if at a particular time a corporation owes a foreign currency debt in respect of which the corporation would have had, if the foreign currency debt had been repaid at that time, a capital loss or gain, the corporation is deemed to own at the time (in this section referred to as the “measurement time”) that is immediately before the particular time a property

(a)  the adjusted cost base of which at the measurement time is equal to the amount determined by the formula

A + B - C; and

(b)  the fair market value of which is equal to the amount that would be the amount of principal owed by the corporation under the foreign currency debt at the measurement time if that amount were calculated using the exchange rate applicable at the time of the original borrowing.

In the formula in subparagraph a of the first paragraph,

(a)  A is the amount of principal owed by the corporation under the foreign currency debt at the measurement time, calculated using the exchange rate applicable at that time;

(b)  B is the portion of any gain, previously recognized in respect of the foreign currency debt because of this Title, that is reasonably attributable to the amount determined under subparagraph a; and

(c)  C is the portion of any capital loss, previously recognized in respect of the foreign currency debt because of this Title, that is reasonably attributable to the amount determined under subparagraph a.

2010, c. 5, s. 56.