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

Section 130r76 Disposition versions

2012-09-01

130R76. Despite Chapter I and Divisions I, II, IV to XIV and XVIII, the amount deductible by a taxpayer for a taxation year in respect of a property that is a specified leasing property at the end of the year is equal to the lesser of

(a)  the amount by which the aggregate of the following amounts exceeds the aggregate of the amounts deducted by the taxpayer in respect of the property by reason of this section before the beginning of the year and after the time, referred to in this section as the “particular time”, when the property last became a specified leasing property of the taxpayer:

i.  the amounts that would be considered to be repayments during the year or a preceding taxation year as principal on a loan made by the taxpayer if

(1)  the taxpayer had made the loan at the particular time and the principal amount of the loan were equal to the fair market value of the property at that time,

(2)  interest, capitalized semi-annually and not in advance, had been charged on the principal amount of the loan outstanding from time to time at the rate, determined pursuant to section 125.1R2, in effect at the earlier of the particular time and any time prior to the particular time at which the taxpayer last entered into an agreement to lease the property or, where a particular lease provides that the amount paid or payable by the lessee of the property for the use of or right to use the property varies according to the rates of interest in effect from time to time, at the beginning of the period for which the interest is computed if the taxpayer so elects, in respect of all property that is the subject of the particular lease, in the taxpayer’s fiscal return filed under Part I of the Act for the taxation year during which the particular lease was entered into, and

(3)  the amounts received or receivable by the taxpayer before the end of the year for the use of or the right to use the property before the end of the year and after the particular time were blended payments of principal and interest on the loan, computed pursuant to subparagraph 2, that are applied firstly on account of interest on principal, secondly on account of interest on unpaid interest and thirdly on account of the principal amount outstanding, and

ii.  the amount that would have been deductible under this Title for the taxation year that includes the particular time if

(1)  the property had been transferred to a separate prescribed class at the later of the beginning of that taxation year or the time when the property was acquired by the taxpayer,

(2)  that taxation year had ended immediately before the particular time, and

(3)  where the property was not a specified leasing property immediately before the particular time, section 130R23 had applied; or

(b)  the amount by which the aggregate of the amounts that would have been deducted by the taxpayer in respect of the property under paragraph a of section 130 of the Act in computing the taxpayer’s income for the year and the preceding taxation years, if this section and sections 130R85 and 130R91 had not applied and if the taxpayer, in each such year, had deducted under paragraph a of that section 130 the maximum amount deductible in respect of the property under this Title if it were read without reference to this section and sections 130R85 and 130R91, exceeds the total depreciation allowed to the taxpayer before the beginning of the year in respect of the property.

s. 130R42.6; O.C. 366-94, s. 7; O.C. 1466-98, s. 126; O.C. 134-2009, s. 1.