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

Section 140.1r2 Disposition versions

2012-09-01

140.1R2. For the purposes of subparagraph a of the first paragraph of section 140.1 of the Act, the prescribed reserve amount for a taxpayer for a taxation year means the aggregate of

(a)  where the taxpayer is a bank, an amount equal to the lesser of the following amounts:

i.  the reserve amount reported in its annual report for the year that is filed with and accepted by the Superintendent of Financial Institutions of Canada or, where the taxpayer was subject to the supervision of the Superintendent of Financial Institutions of Canada throughout the year but was not required to file an annual report with the Superintendent for the year, in its financial statements for the year, as general provisions or as specific provisions in respect of exposures to designated countries that are related to loans or lending assets made or acquired by it in the ordinary course of its business, and

ii.  an amount in respect of its loans or lending assets at the end of the year that were made or acquired by it in the ordinary course of its business and reported for the year to the Superintendent of Financial Institutions of Canada, pursuant to the guidelines established by the Superintendent, as being part of the aggregate of the exposures to designated countries for the taxpayer, for the purpose of determining the taxpayer’s general provisions or specific provisions referred to in subparagraph i, or that the taxpayer acquired after 16 August 1990 and reported for the year to the Superintendent of Financial Institutions of Canada, pursuant to the guidelines established by the Superintendent, as an exposure to a designated country, referred to in the second paragraph as “loans” equal to the positive or negative amount, as the case may be, determined by the following formula:

[45% × (A + B)] – (B + C); and

(b)  where the taxpayer is a bank, the positive or negative amount that would be determined by the formula referred to in subparagraph ii of subparagraph a, in respect of specified loans owned by the taxpayer at the end of the year, if that subparagraph ii applied in respect of the loans.

In the formula in subparagraph ii of subparagraph a of the first paragraph,

(a)  A is the aggregate of the amounts each of which is equal to the amount that would be the amortized cost of a loan to the taxpayer at the end of the year if section 21.26 of the Act were read without reference to its paragraph e and section 21.27 of the Act without reference to its paragraph d;

(b)  B is the aggregate of the amounts each of which is equal to the amount by which the principal amount of a loan outstanding at the time it was acquired by the taxpayer exceeds the amortized cost of the loan to the taxpayer immediately after that time; and

(c)  C is the aggregate of the amounts each of which is equal to

i.  an amount deducted in respect of a loan under subparagraph b of the first paragraph of section 140.1 of the Act in computing the taxpayer’s income for the year, or

ii.  an amount in respect of a loan representing the amount by which the aggregate of the amounts deducted in respect of the loan under section 141 of the Act in computing the taxpayer’s income for the year or a preceding taxation year exceeds the aggregate of the amounts included in respect of the loan under paragraph i of section 87 of the Act in computing the taxpayer’s income for the year or a preceding taxation year.

s. 140.1R2; O.C. 366-94, s. 17; O.C. 1466-98, s. 126; O.C. 1463-2001, s. 44; O.C. 1470-2002, s. 25; O.C. 134-2009, s. 1.