I-3 - Taxation Act

Section 484.12 Disposition versions

2006-03-01

484.12. Where a property is seized at any time in a taxation year by a creditor in respect of a particular debt,

(a)  the creditor is deemed to have disposed of the particular debt at that time;

(b)  the amount received as consideration for the particular debt as a consequence of the seizure is deemed to be received at that time and to be equal to

i.  where the particular debt is capital property, the adjusted cost base to the creditor of the particular debt, and

ii.  in any other case, the cost amount to the creditor of the particular debt;

(c)  where any portion of the particular debt is outstanding immediately after that time, the creditor is deemed to have reacquired that portion immediately after that time at a cost equal to

i.  where the particular debt is capital property, zero, and

ii.  in any other case, the amount by which the cost amount to the creditor of the particular debt exceeds the specified cost to the creditor of the particular debt; and

(d)  where no portion of the particular debt is outstanding immediately after that time and the particular debt is not capital property, the creditor may deduct as a bad debt in computing the creditor’s income for the year the amount described in subparagraph ii of paragraph c in respect of the seizure.

1996, c. 39, s. 139.