I-3 - Taxation Act

Section 851.59 Disposition versions

2017-02-08

851.59. An expenditure of a taxpayer (other than a corporation) that would, but for this section, include an amount because of the taxpayer having issued an interest, or because of an interest being created, in itself at a particular time is reduced by

(a)  if the issuance or creation of the interest is not a consequence of the exercise of an option, the amount by which the fair market value of the interest at the particular time exceeds

i.  if the transaction under which the interest is issued or created is a transaction to which section 440, paragraph c of section 454.1, the second paragraph of section 614, Chapter X of Title XII of Book III or Title I.2 applies, the amount determined in accordance with that provision, chapter or Title, as the case may be, to be the cost to the taxpayer of the property acquired in consideration for the interest, or

ii.  in any other case, the fair market value of the property transferred or issued to, or the services provided to, the taxpayer in consideration for the interest; and

(b)  if the issuance or creation of the interest is a consequence of the exercise of an option, the amount by which the fair market value of the interest at the particular time exceeds the amount paid, pursuant to the terms of the option, by the holder of the option to the taxpayer in consideration for the interest.

2017, c. 1, s. 251.