I-3 - Taxation Act

Section 1113 Disposition versions

2017-12-07

1113. Where a dividend is paid at any particular time during the period referred to in the first paragraph of section 1110, the mortgage investment corporation may elect in prescribed manner, in respect of the full amount of the dividend, that the following rules apply:

(a)  the dividend is deemed to be a capital gains dividend to the extent that, subject to the second paragraph, it does not exceed the amount by which twice the taxed capital gains of the corporation for the year exceeds the aggregate of all dividends, and parts of dividends, paid by the corporation during the period and before the particular time that are deemed under this paragraph to be capital gains dividends; and

(b)  despite any other provision of this Act, where an amount is received by a taxpayer in a taxation year as the dividend, the amount

i.  shall not be included in computing the taxpayer’s income for the year as income from a share of the capital stock of the corporation, and

ii.  is deemed to be a capital gain of the taxpayer from the disposition by the taxpayer of a capital property in the year.

1974, c. 18, s. 41; 1986, c. 19, s. 204; 1987, c. 67, s. 198; 1990, c. 59, s. 359; 1994, c. 22, s. 341; 1996, c. 39, s. 264; 1997, c. 3, s. 71; 2003, c. 2, s. 291; 2017, c. 29, s. 208.

2006-03-01

1113. Where a dividend is paid at any particular time during the period referred to in the first paragraph of section 1110, the mortgage investment corporation may elect in prescribed manner, in respect of the full amount of the dividend, that the following rules apply:

(a)  the dividend is deemed to be a capital gains dividend to the extent that, subject to the second paragraph, it does not exceed the amount by which twice the taxed capital gains of the corporation for the year exceeds the aggregate of all dividends, and parts of dividends, paid by the corporation during the period and before the particular time that are deemed under this paragraph to be capital gains dividends; and

(b)  notwithstanding any other provision of this Act, no amount received in a taxation year by a taxpayer as the dividend shall be included in computing the taxpayer’s income for the year as income from a share of the capital stock of the corporation, but

i.  where the dividend is in respect of capital gains of the corporation from dispositions of property that occurred before 28 February 2000, and the taxation year of the taxpayer includes 27 February 2000, the dividend is deemed to be a capital gain of the taxpayer from the disposition by the taxpayer of a capital property in the year and before 28 February 2000,

ii.  where the dividend is in respect of capital gains of the corporation from dispositions of property that occurred before 28 February 2000 and the taxation year of the taxpayer began after 27 February 2000 and ended before 18 October 2000, 9/8 of the dividend is deemed to be a capital gain of the taxpayer from the disposition by the taxpayer of a capital property in the year,

iii.  where the dividend is in respect of capital gains of the corporation from dispositions of property that occurred before 28 February 2000 and the taxation year of the taxpayer began after 17 October 2000, 3/2 of the dividend is deemed to be a capital gain of the taxpayer from the disposition by the taxpayer of a capital property in the year,

iv.  where the dividend is in respect of capital gains of the corporation from dispositions of property that occurred before 28 February 2000 and the taxation year of the taxpayer began after 27 February 2000 and ended after 17 October 2000, 9/8 of the dividend is deemed to be a capital gain of the taxpayer from the disposition by the taxpayer of capital property in the year and before 18 October 2000,

v.  where the dividend is in respect of capital gains of the corporation from dispositions of property that occurred after 27 February 2000 but before 18 October 2000, and the taxation year of the taxpayer began after 17 October 2000, 4/3 of the dividend is deemed to be a capital gain of the taxpayer from the disposition by the taxpayer of a capital property in the year,

vi.  where the dividend is in respect of capital gains of the corporation from dispositions of property that occurred after 27 February 2000 but before 18 October 2000 and the taxation year of the taxpayer includes 17 October 2000, the dividend is deemed to be a capital gain of the taxpayer from the disposition by the taxpayer of a capital property in the year and in the period that began after 27 February 2000 and ended before 18 October 2000,

vii.  where the dividend is in respect of capital gains of the corporation from dispositions of property that occurred after 27 February 2000 but before 17 October 2000 and the taxation year of the taxpayer began after 27 February 2000 and ended before 17 October 2000, the dividend is deemed to be a capital gain of the taxpayer from the disposition by the taxpayer of a capital property in the year, and

viii.  in any other case, the dividend is deemed to be a capital gain of the taxpayer from the disposition of capital property in the year and after 17 October 2000.

Where the taxation year of the corporation includes 28 February 2000 or 17 October 2000, or begins after 28 February 2000 and ends before 17 October 2000, the reference to the word “twice” in subparagraph a of the first paragraph shall be read, with the necessary modifications, as a reference to the reciprocal of the fraction in paragraphs a to d of section 231.0.1 that applies to the corporation for the year.

1974, c. 18, s. 41; 1986, c. 19, s. 204; 1987, c. 67, s. 198; 1990, c. 59, s. 359; 1994, c. 22, s. 341; 1996, c. 39, s. 264; 1997, c. 3, s. 71; 2003, c. 2, s. 291.