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

Section 851.22.4r15 Disposition versions

2012-09-01

851.22.4R15. For the purposes of paragraph c of section 851.22.4R2 and paragraph b of section 851.22.4R3, if, at the end of a taxation year, a taxpayer holds a specified debt obligation the primary currency of which is not Canadian currency, the taxpayer’s foreign exchange adjustment in respect of the obligation for the taxation year is the positive or negative amount determined by the formula

(A × B) − C.

In the formula in the first paragraph,

(a)  A is the amount that would be the tax basis of the specified debt obligation to the taxpayer at the end of the year if

i.  the tax basis were determined using the primary currency of the obligation as the currency in which all amounts are expressed,

ii.  the definition of “tax basis” in section 851.22.7 of the Act were read without reference to paragraphs f and h and section 851.22.8 of the Act were read without reference to paragraphs g and i, and

iii.  the taxpayer’s foreign exchange adjustment in respect of the obligation for each year were nil;

(b)  B is the rate of exchange at the end of the year of the primary currency of the obligation into Canadian currency; and

(c)  C is the amount that would be the tax basis of the obligation to the taxpayer at the end of the year if

i.  the definition of “tax basis” in section 851.22.7 of the Act were read without reference to paragraph h and section 851.22.8 of the Act were read without reference to paragraph i, and

ii.  the taxpayer’s foreign exchange adjustment in respect of the obligation for the year were nil.

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