I-3 - Taxation Act

Section 635 Disposition versions

2006-03-01

635. The taxpayer shall not make the deduction provided for in section 634 except to the extent that such loss:

(a)  is not deductible in computing his income for the year under sections 205 to 207;

(b)  was not deducted in computing his taxable income for his taxation year in which the partnership’s taxation year in which the land was disposed of ended or for any previous taxation year;

(c)  does not exceed his share of the aggregate of the following amounts, to the extent that those amounts are included in computing the loss of the partnership from the farming business for its taxation year ending in the year:

(1)  taxes, other than income or profits taxes or taxes imposed by reference to the transfer of the property, paid by the partnership in its taxation year ending in the year or payable by it in respect of that taxation year to a province or a Canadian municipality in respect of the property, and

(2)  interest paid by the partnership in its taxation year ending in the year or payable by it in respect of that taxation year, pursuant to a legal obligation to pay interest on borrowed money used to acquire the property or on any amount as consideration payable for the property; and

(d)  does not exceed the amount obtained by subtracting from, subject to section 635.1, twice the taxpayer’s taxable capital gain from the disposition of the land contemplated in section 634 the aggregate of his losses from the farming business for taxation years preceding the year which must be included in computing the amount deductible under this division in respect of the taxpayer.

1972, c. 23, s. 480; 1985, c. 25, s. 105; 1990, c. 59, s. 216; 1995, c. 49, s. 150; 1997, c. 3, s. 71; 2003, c. 2, s. 145.