I-3, r. 1 - Regulation respecting the Taxation Act

Section 851.22.13r1 Disposition versions

2012-09-01

851.22.13R1. For the purposes of subparagraph a of the second paragraph of section 851.22.13 of the Act, a specified debt obligation disposed of by a taxpayer in a taxation year is prescribed in respect of the taxpayer if

(a)  subject to section 851.22.13R2, the amortization date for the specified debt obligation is not more than 2 years after the end of the taxation year;

(b)  the taxpayer has elected to consider the obligation to be a prescribed debt obligation, the election applies to dispositions in the year and the amount, expressed as a positive number if less than zero, determined by the following formula, does not exceed the lesser of $5,000 and the amount, if any, specified in the election:

A − B;

(c)  the disposition resulted in an extinguishment of the obligation, other than an extinguishment that occurred because of a purchase of the obligation by the debtor in the open market;

(d)  the taxpayer had the right to require the obligation to be settled at any time; or

(e)  the debtor had the right to settle the obligation at any time.

In the formula in subparagraph b of the first paragraph,

(a)  A is the total of all amounts each of which is the residual portion of the taxpayer’s gain from the disposition of the obligation or any other specified debt obligation disposed of in the same transaction; and

(b)  B is the total of all amounts each of which is the residual portion of the taxpayer’s loss from the disposition of the obligation or any other specified debt obligation disposed of in the same transaction.

O.C. 390-2012, s. 64.