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

Section 851.22.4r13 Disposition versions

2012-09-01

851.22.4R13. If a taxpayer held a specified debt obligation at the beginning of the taxpayer’s first taxation year, referred to in this section as the “initial year”, for which section 851.22.4 of the Act applied to the taxpayer in respect of the obligation, the following rules apply:

(a)  the taxpayer’s accrued return from the obligation for the initial year or a subsequent taxation year does not include an amount to the extent that the amount was included in computing the taxpayer’s income for a taxation year preceding the initial year; and

(b)  if interest on the obligation in respect of a period before the initial year becomes receivable or is received by the taxpayer in a particular taxation year that is the initial year or a subsequent taxation year, and all or part of the interest would not, but for this section, be included in computing the taxpayer’s income for any taxation year, the taxpayer must include in determining the taxpayer’s accrued return from the obligation for the particular taxation year the amount, if any, by which the portion of the interest that would not otherwise be included in computing the taxpayer’s income for any taxation year exceeds the portion of the cost of the obligation to the taxpayer that is reasonably attributable to that portion of the interest.

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