I-3 - Taxation Act

Section 726.7 Disposition versions

2021-12-10

726.7. In computing the taxable income for a taxation year of an individual other than a trust, there shall be deducted, if the individual was resident in Canada throughout the year and disposed of qualified farm or fishing property in the year or a preceding taxation year or disposed of qualified farm property or qualified fishing property before 1 January 2014, an amount equal to the least of

(a)  the amount determined by the formula

[$500,000 - (A + B + C + D)] × E;

(b)  his cumulative gains limit at the end of the year;

(c)  his annual gains limit for the year;

(d)  the amount that would be determined in respect of the individual for the year under paragraph b of section 28 in respect of capital gains and capital losses if the only properties referred to in that paragraph were properties that, at the time they were disposed of, were qualified farm properties, qualified fishing properties or qualified farm or fishing properties; and

(e)  the amount that is allowed as a deduction in computing the individual’s taxable income for the year for the purposes of the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)) under section 110.6 of that Act, in respect of properties referred to in this paragraph or, if the amount that is so allowed as a deduction is equal to the maximum amount that the individual may claim as a deduction in that computation under that section in respect of such properties, the amount that the individual specifies and that is not less than that maximum amount.

In the formula provided for in subparagraph a of the first paragraph,

(a)  A is the aggregate of all amounts each of which is an amount deducted under this Title in computing the individual’s taxable income for a preceding taxation year that ended before 1 January 1988 or began after 17 October 2000;

(b)  B is the aggregate of all amounts each of which is

i.  3/4 of an amount deducted under this Title in computing the individual’s taxable income for a preceding taxation year that ended after 31 December 1987 but before 1 January 1990, other than amounts deducted under this Title for a taxation year in respect of an amount that was included in computing an individual’s income for that year by reason of subparagraph ii of paragraph a of section 105, as that subparagraph applied for a taxation year that ended before 28 February 2000, or

ii.  3/4 of an amount deducted under this Title in computing the individual’s taxable income for a preceding taxation year that began after 28 February 2000 and ended before 17 October 2000;

(c)  C is 2/3 of the aggregate of all amounts each of which is an amount deducted under this Title in computing the individual’s taxable income

i.  for a preceding taxation year that ended after 31 December 1989 but before 28 February 2000, or

ii.  in respect of an amount that was included in computing the individual’s income for a preceding taxation year that began after 31 December 1987 and ended before 1 January 1990, by reason of subparagraph ii of paragraph a of section 105, as that subparagraph applied for a taxation year that ended before 28 February 2000;

(d)  D is the aggregate of all amounts each of which is, in relation to an amount deducted under this Title in computing the individual’s taxable income for a preceding taxation year that includes 28 February 2000 or 17 October 2000, the product obtained when that amount is multiplied by the reciprocal of the fraction determined in respect of the individual under subparagraph i of subparagraph e for that preceding taxation year; and

(e)  E is

i.  in the case of a taxation year that includes 28 February 2000 or 17 October 2000 or that begins after 28 February 2000 and ends before 17 October 2000, the fraction determined by the formula

[2 × (F + G)]/H, and

ii.  in any other case, 1.

In the formula provided for in subparagraph i of subparagraph e of the second paragraph,

(a)  F is the amount deemed by section 105.3 to be a taxable capital gain of the individual for the year;

(b)  G is the amount by which the amount determined in respect of the individual for the year under paragraph b of section 28 exceeds the amount deemed by section 105.3 to be a taxable capital gain of the individual for the year; and

(c)  H is the aggregate of

i.  the amount deemed by section 105.3 to be a taxable capital gain of the individual for the year multiplied by

(1)  where that amount is the amount referred to in subparagraph a of the first paragraph of section 105.3, the reciprocal of the fraction obtained by multiplying 3/4 by the fraction in section 105.2 that applies to the individual for the year,

(2)  where that amount is the amount referred to in subparagraph b of the first paragraph of section 105.3 and the year does not end after 27 February 2000 and before 18 October 2000, 2, and

(3)  where that amount is the amount referred to in subparagraph b of the first paragraph of section 105.3 and the year ends after 27 February 2000 and before 18 October 2000, 3/2, and

ii.  the excess referred to in subparagraph b multiplied by the reciprocal of the fraction in paragraphs a to d of section 231.0.1 that applies to the individual for the year.

For the purposes of the first paragraph, “qualified farm property” and “qualified fishing property” have the meaning assigned by section 726.6, as it read before subparagraphs a and a.0.1 of the first paragraph of that section were struck out.

For the purposes of subparagraph e of the first paragraph, where section 517.5.5 applies in respect of the disposition in a taxation year of eligible shares of an individual that are described in paragraph a of the definition of that expression in the first paragraph of section 517.5.3 and where subsection 1 of section 84.1 of the Income Tax Act applies in respect of the disposition, the amount that would be determined in respect of the individual for the year under paragraph b of section 28 if those shares were the only properties referred to in that paragraph b is deemed to have been allowed as a deduction in computing the individual’s taxable income for the year for the purposes of the Income Tax Act under section 110.6 of that Act in respect of qualified farm or fishing properties.

Sections 21.4.6 and 21.4.7 apply, with the necessary modifications, in relation to a claim for a deduction made under section 110.6 of the Income Tax Act in respect of properties referred to in the first paragraph.

1987, c. 67, s. 142; 1990, c. 59, s. 260; 1994, c. 22, s. 249; 1996, c. 39, s. 181; 2003, c. 2, s. 200; 2007, c. 12, s. 76; 2009, c. 5, s. 244; 2009, c. 15, s. 115; 2015, c. 24, s. 94; 2017, c. 1, s. 172; 2017, c. 29, s. 101; 2021, c. 36, s. 72.

2017-12-07

726.7. In computing the taxable income for a taxation year of an individual other than a trust, there shall be deducted, if the individual was resident in Canada throughout the year and disposed of qualified farm or fishing property in the year or a preceding taxation year or disposed of qualified farm property or qualified fishing property before 1 January 2014, an amount equal to the least of

(a)  the amount determined by the formula

[$500,000 - (A + B + C + D)] × E;

(b)  his cumulative gains limit at the end of the year;

(c)  his annual gains limit for the year;

(d)  the amount that would be determined in respect of the individual for the year under paragraph b of section 28 in respect of capital gains and capital losses if the only properties referred to in that paragraph were properties that, at the time they were disposed of, were qualified farm properties, qualified fishing properties or qualified farm or fishing properties; and

(e)  the amount that is allowed as a deduction in computing the individual’s taxable income for the year for the purposes of the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)) under section 110.6 of that Act, in respect of properties referred to in this paragraph or, if the amount that is so allowed as a deduction is equal to the maximum amount that the individual may claim as a deduction in that computation under that section in respect of such properties, the amount that the individual specifies and that is not less than that maximum amount.

In the formula provided for in subparagraph a of the first paragraph,

(a)  A is the aggregate of all amounts each of which is an amount deducted under this Title in computing the individual’s taxable income for a preceding taxation year that ended before 1 January 1988 or began after 17 October 2000;

(b)  B is the aggregate of all amounts each of which is

i.  3/4 of an amount deducted under this Title in computing the individual’s taxable income for a preceding taxation year that ended after 31 December 1987 but before 1 January 1990, other than amounts deducted under this Title for a taxation year in respect of an amount that was included in computing an individual’s income for that year by reason of subparagraph ii of paragraph a of section 105, as that subparagraph applied for a taxation year that ended before 28 February 2000, or

ii.  3/4 of an amount deducted under this Title in computing the individual’s taxable income for a preceding taxation year that began after 28 February 2000 and ended before 17 October 2000;

(c)  C is 2/3 of the aggregate of all amounts each of which is an amount deducted under this Title in computing the individual’s taxable income

i.  for a preceding taxation year that ended after 31 December 1989 but before 28 February 2000, or

ii.  in respect of an amount that was included in computing the individual’s income for a preceding taxation year that began after 31 December 1987 and ended before 1 January 1990, by reason of subparagraph ii of paragraph a of section 105, as that subparagraph applied for a taxation year that ended before 28 February 2000;

(d)  D is the aggregate of all amounts each of which is, in relation to an amount deducted under this Title in computing the individual’s taxable income for a preceding taxation year that includes 28 February 2000 or 17 October 2000, the product obtained when that amount is multiplied by the reciprocal of the fraction determined in respect of the individual under subparagraph i of subparagraph e for that preceding taxation year; and

(e)  E is

i.  in the case of a taxation year that includes 28 February 2000 or 17 October 2000 or that begins after 28 February 2000 and ends before 17 October 2000, the fraction determined by the formula

[2 × (F + G)]/H, and

ii.  in any other case, 1.

In the formula provided for in subparagraph i of subparagraph e of the second paragraph,

(a)  F is the amount deemed by section 105.3 to be a taxable capital gain of the individual for the year;

(b)  G is the amount by which the amount determined in respect of the individual for the year under paragraph b of section 28 exceeds the amount deemed by section 105.3 to be a taxable capital gain of the individual for the year; and

(c)  H is the aggregate of

i.  the amount deemed by section 105.3 to be a taxable capital gain of the individual for the year multiplied by

(1)  where that amount is the amount referred to in subparagraph a of the first paragraph of section 105.3, the reciprocal of the fraction obtained by multiplying 3/4 by the fraction in section 105.2 that applies to the individual for the year,

(2)  where that amount is the amount referred to in subparagraph b of the first paragraph of section 105.3 and the year does not end after 27 February 2000 and before 18 October 2000, 2, and

(3)  where that amount is the amount referred to in subparagraph b of the first paragraph of section 105.3 and the year ends after 27 February 2000 and before 18 October 2000, 3/2, and

ii.  the excess referred to in subparagraph b multiplied by the reciprocal of the fraction in paragraphs a to d of section 231.0.1 that applies to the individual for the year.

For the purposes of the first paragraph, “qualified farm property” and “qualified fishing property” have the meaning assigned by section 726.6, as it read before subparagraphs a and a.0.1 of the first paragraph of that section were struck out.

For the purposes of subparagraph e of the first paragraph, where section 517.5.5 applies in respect of the disposition in a taxation year of eligible shares of an individual that are described in paragraph a of the definition of that expression in the first paragraph of section 517.5.3, the amount that would be determined in respect of the individual for the year under paragraph b of section 28 if those shares were the only properties referred to in that paragraph b is deemed to have been allowed as a deduction in computing the individual’s taxable income for the year for the purposes of the Income Tax Act under section 110.6 of that Act in respect of qualified farm or fishing properties.

Sections 21.4.6 and 21.4.7 apply, with the necessary modifications, in relation to a claim for a deduction made under section 110.6 of the Income Tax Act in respect of properties referred to in the first paragraph.

1987, c. 67, s. 142; 1990, c. 59, s. 260; 1994, c. 22, s. 249; 1996, c. 39, s. 181; 2003, c. 2, s. 200; 2007, c. 12, s. 76; 2009, c. 5, s. 244; 2009, c. 15, s. 115; 2015, c. 24, s. 94; 2017, c. 1, s. 172; 2017, c. 29, s. 101.

2017-02-08

726.7. An individual other than a trust, in computing his taxable income for a taxation year, shall deduct, if he was resident in Canada throughout the year and disposed of qualified farm property in the year or a preceding taxation year ending after 31 December 1984, an amount equal to the least of

(a)  the amount determined by the formula

[$500,000 - (A + B + C + D)] × E;

(b)  his cumulative gains limit at the end of the year;

(c)  his annual gains limit for the year;

(d)  the amount that would be determined in respect of the individual for the year under paragraph b of section 28 in respect of capital gains and capital losses if the only properties referred to in that paragraph were qualified farm properties of the individual disposed of after 17 June 1987; and

(e)  the amount that is allowed as a deduction in computing the individual’s taxable income for the year for the purposes of the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)) under section 110.6 of that Act, in respect of qualified farm properties or, if the amount that is so allowed as a deduction is equal to the maximum amount that the individual may claim as a deduction in that computation under that section in respect of such properties, the amount that the individual specifies and that is not less than that maximum amount.

In the formula provided for in subparagraph a of the first paragraph,

(a)  A is the aggregate of all amounts each of which is an amount deducted under this Title in computing the individual’s taxable income for a preceding taxation year that ended before 1 January 1988 or began after 17 October 2000;

(b)  B is the aggregate of all amounts each of which is

i.  3/4 of an amount deducted under this Title in computing the individual’s taxable income for a preceding taxation year that ended after 31 December 1987 but before 1 January 1990, other than amounts deducted under this Title for a taxation year in respect of an amount that was included in computing an individual’s income for that year by reason of subparagraph ii of paragraph a of section 105, as that subparagraph applied for a taxation year that ended before 28 February 2000, or

ii.  3/4 of an amount deducted under this Title in computing the individual’s taxable income for a preceding taxation year that began after 28 February 2000 and ended before 17 October 2000;

(c)  C is 2/3 of the aggregate of all amounts each of which is an amount deducted under this Title in computing the individual’s taxable income

i.  for a preceding taxation year that ended after 31 December 1989 but before 28 February 2000, or

ii.  in respect of an amount that was included in computing the individual’s income for a preceding taxation year that began after 31 December 1987 and ended before 1 January 1990, by reason of subparagraph ii of paragraph a of section 105, as that subparagraph applied for a taxation year that ended before 28 February 2000;

(d)  D is the aggregate of all amounts each of which is, in relation to an amount deducted under this Title in computing the individual’s taxable income for a preceding taxation year that includes 28 February 2000 or 17 October 2000, the product obtained when that amount is multiplied by the reciprocal of the fraction determined in respect of the individual under subparagraph i of subparagraph e for that preceding taxation year; and

(e)  E is

i.  in the case of a taxation year that includes 28 February 2000 or 17 October 2000 or that begins after 28 February 2000 and ends before 17 October 2000, the fraction determined by the formula

[2 × (F + G)]/H, and

ii.  in any other case, 1.

In the formula provided for in subparagraph i of subparagraph e of the second paragraph,

(a)  F is the amount deemed by section 105.3 to be a taxable capital gain of the individual for the year;

(b)  G is the amount by which the amount determined in respect of the individual for the year under paragraph b of section 28 exceeds the amount deemed by section 105.3 to be a taxable capital gain of the individual for the year; and

(c)  H is the aggregate of

i.  the amount deemed by section 105.3 to be a taxable capital gain of the individual for the year multiplied by

(1)  where that amount is the amount referred to in subparagraph a of the first paragraph of section 105.3, the reciprocal of the fraction obtained by multiplying 3/4 by the fraction in section 105.2 that applies to the individual for the year,

(2)  where that amount is the amount referred to in subparagraph b of the first paragraph of section 105.3 and the year does not end after 27 February 2000 and before 18 October 2000, 2, and

(3)  where that amount is the amount referred to in subparagraph b of the first paragraph of section 105.3 and the year ends after 27 February 2000 and before 18 October 2000, 3/2, and

ii.  the excess referred to in subparagraph b multiplied by the reciprocal of the fraction in paragraphs a to d of section 231.0.1 that applies to the individual for the year.

For the purposes of subparagraph e of the first paragraph, where section 517.5.5 applies in respect of the disposition in a taxation year of an individual’s eligible primary and manufacturing sectors shares described in paragraph a of the definition of that expression in the first paragraph of section 517.5.3, the amount that would be determined in respect of the individual for the year under paragraph b of section 28 if those shares were the only properties referred to in that paragraph b is deemed to have been allowed as a deduction in computing the individual’s taxable income for the year for the purposes of the Income Tax Act under section 110.6 of that Act in respect of qualified farm properties.

Sections 21.4.6 and 21.4.7 apply, with the necessary modifications, in relation to a claim for a deduction made under section 110.6 of the Income Tax Act in respect of qualified farm properties.

1987, c. 67, s. 142; 1990, c. 59, s. 260; 1994, c. 22, s. 249; 1996, c. 39, s. 181; 2003, c. 2, s. 200; 2007, c. 12, s. 76; 2009, c. 5, s. 244; 2009, c. 15, s. 115; 2015, c. 24, s. 94; 2017, c. 1, s. 172.

2015-10-26

726.7. An individual other than a trust, in computing his taxable income for a taxation year, shall deduct, if he was resident in Canada throughout the year and disposed of qualified farm property in the year or a preceding taxation year ending after 31 December 1984, an amount equal to the least of

(a)  the amount determined by the formula

[$500,000 - (A + B + C + D)] × E;

(b)  his cumulative gains limit at the end of the year;

(c)  his annual gains limit for the year;

(d)  the amount that would be determined in respect of the individual for the year under paragraph b of section 28 in respect of capital gains and capital losses if the only properties referred to in that paragraph were qualified farm properties of the individual disposed of after 17 June 1987; and

(e)  the amount that is allowed as a deduction in computing the individual’s taxable income for the year for the purposes of the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)) under section 110.6 of that Act, in respect of qualified farm properties or, if the amount that is so allowed as a deduction is equal to the maximum amount that the individual may claim as a deduction in that computation under that section in respect of such properties, the amount that the individual specifies and that is not less than that maximum amount.

In the formula provided for in subparagraph a of the first paragraph,

(a)  A is the aggregate of all amounts each of which is an amount deducted under this Title in computing the individual’s taxable income for a preceding taxation year that ended before 1 January 1988 or began after 17 October 2000;

(b)  B is the aggregate of all amounts each of which is

i.  3/4 of an amount deducted under this Title in computing the individual’s taxable income for a preceding taxation year that ended after 31 December 1987 but before 1 January 1990, other than amounts deducted under this Title for a taxation year in respect of an amount that was included in computing an individual’s income for that year by reason of subparagraph ii of paragraph a of section 105, as that subparagraph applied for a taxation year that ended before 28 February 2000, or

ii.  3/4 of an amount deducted under this Title in computing the individual’s taxable income for a preceding taxation year that began after 28 February 2000 and ended before 17 October 2000;

(c)  C is 2/3 of the aggregate of all amounts each of which is an amount deducted under this Title in computing the individual’s taxable income

i.  for a preceding taxation year that ended after 31 December 1989 but before 28 February 2000, or

ii.  in respect of an amount that was included in computing the individual’s income for a preceding taxation year that began after 31 December 1987 and ended before 1 January 1990, by reason of subparagraph ii of paragraph a of section 105, as that subparagraph applied for a taxation year that ended before 28 February 2000;

(d)  D is the aggregate of all amounts each of which is, in relation to an amount deducted under this Title in computing the individual’s taxable income for a preceding taxation year that includes 28 February 2000 or 17 October 2000, the product obtained when that amount is multiplied by the reciprocal of the fraction determined in respect of the individual under subparagraph i of subparagraph e for that preceding taxation year; and

(e)  E is

i.  in the case of a taxation year that includes 28 February 2000 or 17 October 2000 or that begins after 28 February 2000 and ends before 17 October 2000, the fraction determined by the formula

[2 × (F + G)]/H, and

ii.  in any other case, 1.

In the formula provided for in subparagraph i of subparagraph e of the second paragraph,

(a)  F is the amount deemed by section 105.3 to be a taxable capital gain of the individual for the year;

(b)  G is the amount by which the amount determined in respect of the individual for the year under paragraph b of section 28 exceeds the amount deemed by section 105.3 to be a taxable capital gain of the individual for the year; and

(c)  H is the aggregate of

i.  the amount deemed by section 105.3 to be a taxable capital gain of the individual for the year multiplied by

(1)  where that amount is the amount referred to in subparagraph a of the first paragraph of section 105.3, the reciprocal of the fraction obtained by multiplying 3/4 by the fraction in section 105.2 that applies to the individual for the year,

(2)  where that amount is the amount referred to in subparagraph b of the first paragraph of section 105.3 and the year does not end after 27 February 2000 and before 18 October 2000, 2, and

(3)  where that amount is the amount referred to in subparagraph b of the first paragraph of section 105.3 and the year ends after 27 February 2000 and before 18 October 2000, 3/2, and

ii.  the excess referred to in subparagraph b multiplied by the reciprocal of the fraction in paragraphs a to d of section 231.0.1 that applies to the individual for the year.

Sections 21.4.6 and 21.4.7 apply, with the necessary modifications, in relation to a claim for a deduction made under section 110.6 of the Income Tax Act in respect of qualified farm properties.

1987, c. 67, s. 142; 1990, c. 59, s. 260; 1994, c. 22, s. 249; 1996, c. 39, s. 181; 2003, c. 2, s. 200; 2007, c. 12, s. 76; 2009, c. 5, s. 244; 2009, c. 15, s. 115; 2015, c. 24, s. 94.

2009-06-04

726.7. An individual other than a trust, in computing his taxable income for a taxation year, shall deduct, if he was resident in Canada throughout the year and disposed of qualified farm property in the year or a preceding taxation year ending after 31 December 1984, an amount equal to the least of

(a)  the amount determined by the formula

[$375,000 - (A + B + C + D)] × E;

(b)  his cumulative gains limit at the end of the year;

(c)  his annual gains limit for the year;

(d)  the amount that would be determined in respect of the individual for the year under paragraph b of section 28 in respect of capital gains and capital losses if the only properties referred to in that paragraph were qualified farm properties of the individual disposed of after 17 June 1987; and

(e)  the amount that is allowed as a deduction in computing the individual’s taxable income for the year for the purposes of the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)) under section 110.6 of that Act, in respect of qualified farm properties or, if the amount that is so allowed as a deduction is equal to the maximum amount that the individual may claim as a deduction in that computation under that section in respect of such properties, the amount that the individual specifies and that is not less than that maximum amount.

In the formula provided for in subparagraph a of the first paragraph,

(a)  A is the aggregate of all amounts each of which is an amount deducted under this Title in computing the individual’s taxable income for a preceding taxation year that ended before 1 January 1988 or began after 17 October 2000;

(b)  B is the aggregate of all amounts each of which is

i.  3/4 of an amount deducted under this Title in computing the individual’s taxable income for a preceding taxation year that ended after 31 December 1987 but before 1 January 1990, other than amounts deducted under this Title for a taxation year in respect of an amount that was included in computing an individual’s income for that year by reason of subparagraph ii of paragraph a of section 105, as that subparagraph applied for a taxation year that ended before 28 February 2000, or

ii.  3/4 of an amount deducted under this Title in computing the individual’s taxable income for a preceding taxation year that began after 28 February 2000 and ended before 17 October 2000;

(c)  C is 2/3 of the aggregate of all amounts each of which is an amount deducted under this Title in computing the individual’s taxable income

i.  for a preceding taxation year that ended after 31 December 1989 but before 28 February 2000, or

ii.  in respect of an amount that was included in computing the individual’s income for a preceding taxation year that began after 31 December 1987 and ended before 1 January 1990, by reason of subparagraph ii of paragraph a of section 105, as that subparagraph applied for a taxation year that ended before 28 February 2000;

(d)  D is the aggregate of all amounts each of which is, in relation to an amount deducted under this Title in computing the individual’s taxable income for a preceding taxation year that includes 28 February 2000 or 17 October 2000, the product obtained when that amount is multiplied by the reciprocal of the fraction determined in respect of the individual under subparagraph i of subparagraph e for that preceding taxation year; and

(e)  E is

i.  in the case of a taxation year that includes 28 February 2000 or 17 October 2000 or that begins after 28 February 2000 and ends before 17 October 2000, the fraction determined by the formula

[2 × (F + G)]/H, and

ii.  in any other case, 1.

In the formula provided for in subparagraph i of subparagraph e of the second paragraph,

(a)  F is the amount deemed by section 105.3 to be a taxable capital gain of the individual for the year;

(b)  G is the amount by which the amount determined in respect of the individual for the year under paragraph b of section 28 exceeds the amount deemed by section 105.3 to be a taxable capital gain of the individual for the year; and

(c)  H is the aggregate of

i.  the amount deemed by section 105.3 to be a taxable capital gain of the individual for the year multiplied by

(1)  where that amount is the amount referred to in subparagraph a of the first paragraph of section 105.3, the reciprocal of the fraction obtained by multiplying 3/4 by the fraction in section 105.2 that applies to the individual for the year,

(2)  where that amount is the amount referred to in subparagraph b of the first paragraph of section 105.3 and the year does not end after 27 February 2000 and before 18 October 2000, 2, and

(3)  where that amount is the amount referred to in subparagraph b of the first paragraph of section 105.3 and the year ends after 27 February 2000 and before 18 October 2000, 3/2, and

ii.  the excess referred to in subparagraph b multiplied by the reciprocal of the fraction in paragraphs a to d of section 231.0.1 that applies to the individual for the year.

Sections 21.4.6 and 21.4.7 apply, with the necessary modifications, in relation to a claim for a deduction made under section 110.6 of the Income Tax Act in respect of qualified farm properties.

1987, c. 67, s. 142; 1990, c. 59, s. 260; 1994, c. 22, s. 249; 1996, c. 39, s. 181; 2003, c. 2, s. 200; 2007, c. 12, s. 76; 2009, c. 5, s. 244; 2009, c. 15, s. 115.

2009-05-15

726.7. An individual other than a trust, in computing his taxable income for a taxation year, shall deduct, if he was resident in Canada throughout the year and disposed of qualified farm property in the year or a preceding taxation year ending after 31 December 1984, an amount equal to the least of

(a)  the amount determined by the formula

[$250,000 - (A + B + C + D)] × E;

(b)  his cumulative gains limit at the end of the year;

(c)  his annual gains limit for the year;

(d)  the amount that would be determined in respect of the individual for the year under paragraph b of section 28 in respect of capital gains and capital losses if the only properties referred to in that paragraph were qualified farm properties of the individual disposed of after 17 June 1987; and

(e)  the amount that is allowed as a deduction in computing the individual’s taxable income for the year for the purposes of the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)) under section 110.6 of that Act, in respect of qualified farm properties or, if the amount that is so allowed as a deduction is equal to the maximum amount that the individual may claim as a deduction in that computation under that section in respect of such properties, the amount that the individual specifies and that is not less than that maximum amount.

In the formula provided for in subparagraph a of the first paragraph,

(a)  A is the aggregate of all amounts each of which is an amount deducted under this Title in computing the individual’s taxable income for a preceding taxation year that ended before 1 January 1988 or began after 17 October 2000;

(b)  B is the aggregate of all amounts each of which is

i.  3/4 of an amount deducted under this Title in computing the individual’s taxable income for a preceding taxation year that ended after 31 December 1987 but before 1 January 1990, other than amounts deducted under this Title for a taxation year in respect of an amount that was included in computing an individual’s income for that year by reason of subparagraph ii of paragraph a of section 105, as that subparagraph applied for a taxation year that ended before 28 February 2000, or

ii.  3/4 of an amount deducted under this Title in computing the individual’s taxable income for a preceding taxation year that began after 28 February 2000 and ended before 17 October 2000;

(c)  C is 2/3 of the aggregate of all amounts each of which is an amount deducted under this Title in computing the individual’s taxable income

i.  for a preceding taxation year that ended after 31 December 1989 but before 28 February 2000, or

ii.  in respect of an amount that was included in computing the individual’s income for a preceding taxation year that began after 31 December 1987 and ended before 1 January 1990, by reason of subparagraph ii of paragraph a of section 105, as that subparagraph applied for a taxation year that ended before 28 February 2000;

(d)  D is the aggregate of all amounts each of which is, in relation to an amount deducted under this Title in computing the individual’s taxable income for a preceding taxation year that includes 28 February 2000 or 17 October 2000, the product obtained when that amount is multiplied by the reciprocal of the fraction determined in respect of the individual under subparagraph i of subparagraph e for that preceding taxation year; and

(e)  E is

i.  in the case of a taxation year that includes 28 February 2000 or 17 October 2000 or that begins after 28 February 2000 and ends before 17 October 2000, the fraction determined by the formula

[2 × (F + G)]/H, and

ii.  in any other case, 1.

In the formula provided for in subparagraph i of subparagraph e of the second paragraph,

(a)  F is the amount deemed by section 105.3 to be a taxable capital gain of the individual for the year;

(b)  G is the amount by which the amount determined in respect of the individual for the year under paragraph b of section 28 exceeds the amount deemed by section 105.3 to be a taxable capital gain of the individual for the year; and

(c)  H is the aggregate of

i.  the amount deemed by section 105.3 to be a taxable capital gain of the individual for the year multiplied by

(1)  where that amount is the amount referred to in subparagraph a of the first paragraph of section 105.3, the reciprocal of the fraction obtained by multiplying 3/4 by the fraction in section 105.2 that applies to the individual for the year,

(2)  where that amount is the amount referred to in subparagraph b of the first paragraph of section 105.3 and the year does not end after 27 February 2000 and before 18 October 2000, 2, and

(3)  where that amount is the amount referred to in subparagraph b of the first paragraph of section 105.3 and the year ends after 27 February 2000 and before 18 October 2000, 3/2, and

ii.  the excess referred to in subparagraph b multiplied by the reciprocal of the fraction in paragraphs a to d of section 231.0.1 that applies to the individual for the year.

Sections 21.4.6 and 21.4.7 apply, with the necessary modifications, in relation to a claim for a deduction made under section 110.6 of the Income Tax Act in respect of qualified farm properties.

1987, c. 67, s. 142; 1990, c. 59, s. 260; 1994, c. 22, s. 249; 1996, c. 39, s. 181; 2003, c. 2, s. 200; 2007, c. 12, s. 76; 2009, c. 5, s. 244.

2007-11-07

726.7. An individual other than a trust, in computing his taxable income for a taxation year, shall deduct, if he was resident in Canada throughout the year and disposed of qualified farm property in the year or a preceding taxation year ending after 31 December 1984, an amount equal to the least of

(a)  the amount determined by the formula

[$250,000 − (A + B + C + D)] × E;

(b)  his cumulative gains limit at the end of the year;

(c)  his annual gains limit for the year;

(d)  the amount that would be determined in respect of the individual for the year under paragraph b of section 28 in respect of capital gains and capital losses if the only properties referred to in that paragraph were qualified farm properties of the individual disposed of after 17 June 1987; and

(e)  the amount that is allowed as a deduction in computing the individual’s taxable income for the year for the purposes of the Income Tax Act (Revised Statutes of Canada, 1985, chapter 1, 5th Supplement) under section 110.6 of that Act, in respect of qualified farm properties or, if the amount that is so allowed as a deduction is equal to the maximum amount that the individual may claim as a deduction in that computation under that section in respect of such properties, the amount that the individual specifies and that is not less than that maximum amount.

In the formula provided for in subparagraph a of the first paragraph,

(a)  A is the aggregate of all amounts each of which is an amount deducted under this Title in computing the individual’s taxable income for a preceding taxation year that ended before 1 January 1988 or began after 17 October 2000;

(b)  B is the aggregate of all amounts each of which is

i.  3/4 of an amount deducted under this Title in computing the individual’s taxable income for a preceding taxation year that ended after 31 December 1987 but before 1 January 1990, other than amounts deducted under this Title for a taxation year in respect of an amount that was included in computing an individual’s income for that year by reason of subparagraph ii of paragraph a of section 105, as that subparagraph applied for a taxation year that ended before 28 February 2000, or

ii.  3/4 of an amount deducted under this Title in computing the individual’s taxable income for a preceding taxation year that began after 28 February 2000 and ended before 17 October 2000;

(c)  C is 2/3 of the aggregate of all amounts each of which is an amount deducted under this Title in computing the individual’s taxable income

i.  for a preceding taxation year that ended after 31 December 1989 but before 28 February 2000, or

ii.  in respect of an amount that was included in computing the individual’s income for a preceding taxation year that began after 31 December 1987 and ended before 1 January 1990, by reason of subparagraph ii of paragraph a of section 105, as that subparagraph applied for a taxation year that ended before 28 February 2000;

(d)  D is the aggregate of all amounts each of which is, in relation to an amount deducted under this Title in computing the individual’s taxable income for a preceding taxation year that includes 28 February 2000 or 17 October 2000, the product obtained when that amount is multiplied by the reciprocal of the fraction determined in respect of the individual under subparagraph i of subparagraph e for that preceding taxation year; and

(e)  E is

i.  in the case of a taxation year that includes 28 February 2000 or 17 October 2000 or that begins after 28 February 2000 and ends before 17 October 2000, the fraction determined by the formula

[2 × (F + G)] / H, and

ii.  in any other case, 1.

In the formula provided for in subparagraph i of subparagraph e of the second paragraph,

(a)  F is the amount deemed by section 105.3 to be a taxable capital gain of the individual for the year;

(b)  G is the amount by which the amount determined in respect of the individual for the year under paragraph b of section 28 exceeds the amount deemed by section 105.3 to be a taxable capital gain of the individual for the year; and

(c)  H is the aggregate of

i.  the amount deemed by section 105.3 to be a taxable capital gain of the individual for the year multiplied by

(1)  where that amount is the amount referred to in subparagraph a of the first paragraph of section 105.3, the reciprocal of the fraction obtained by multiplying 3/4 by the fraction in section 105.2 that applies to the individual for the year,

(2)  where that amount is the amount referred to in subparagraph b of the first paragraph of section 105.3 and the year does not end after 27 February 2000 and before 18 October 2000, 2, and

(3)  where that amount is the amount referred to in subparagraph b of the first paragraph of section 105.3 and the year ends after 27 February 2000 and before 18 October 2000, 3/2, and

ii.  the excess referred to in subparagraph b multiplied by the reciprocal of the fraction in paragraphs a to d of section 231.0.1 that applies to the individual for the year.

1987, c. 67, s. 142; 1990, c. 59, s. 260; 1994, c. 22, s. 249; 1996, c. 39, s. 181; 2003, c. 2, s. 200; 2007, c. 12, s. 76.

2006-03-01

726.7. An individual other than a trust, in computing his taxable income for a taxation year, may deduct, if he was resident in Canada throughout the year and disposed of qualified farm property in the year or a preceding taxation year ending after 31 December 1984, such amount as he may claim not exceeding the least of

(a)  the amount determined by the formula

[$250,000 − (A + B + C + D)] × E;

(b)  his cumulative gains limit at the end of the year;

(c)  his annual gains limit for the year; and

(d)  the amount that would be determined in respect of the individual for the year under paragraph b of section 28 in respect of capital gains and capital losses if the only properties referred to in that paragraph were qualified farm properties disposed of by the individual after 31 December 1984 otherwise, where the year is the taxation year 1994 or 1995, than because of an election made under section 726.9.2.

In the formula provided for in subparagraph a of the first paragraph,

(a)  A is the aggregate of all amounts each of which is an amount deducted under this Title in computing the individual’s taxable income for a preceding taxation year that ended before 1 January 1988 or began after 17 October 2000;

(b)  B is the aggregate of all amounts each of which is

i.  3/4 of an amount deducted under this Title in computing the individual’s taxable income for a preceding taxation year that ended after 31 December 1987 but before 1 January 1990, other than amounts deducted under this Title for a taxation year in respect of an amount that was included in computing an individual’s income for that year by reason of subparagraph ii of paragraph a of section 105, as that subparagraph applied for a taxation year that ended before 28 February 2000, or

ii.  3/4 of an amount deducted under this Title in computing the individual’s taxable income for a preceding taxation year that began after 28 February 2000 and ended before 17 October 2000;

(c)  C is 2/3 of the aggregate of all amounts each of which is an amount deducted under this Title in computing the individual’s taxable income

i.  for a preceding taxation year that ended after 31 December 1989 but before 28 February 2000, or

ii.  in respect of an amount that was included in computing the individual’s income for a preceding taxation year that began after 31 December 1987 and ended before 1 January 1990, by reason of subparagraph ii of paragraph a of section 105, as that subparagraph applied for a taxation year that ended before 28 February 2000;

(d)  D is the aggregate of all amounts each of which is, in relation to an amount deducted under this Title in computing the individual’s taxable income for a preceding taxation year that includes 28 February 2000 or 17 October 2000, the product obtained when that amount is multiplied by the reciprocal of the fraction determined in respect of the individual under subparagraph i of subparagraph e for that preceding taxation year; and

(e)  E is

i.  in the case of a taxation year that includes 28 February 2000 or 17 October 2000 or that begins after 28 February 2000 and ends before 17 October 2000, the fraction determined by the formula

[2 × (F + G)] / H, and

ii.  in any other case, 1.

In the formula provided for in subparagraph i of subparagraph e of the second paragraph,

(a)  F is the amount deemed by section 105.3 to be a taxable capital gain of the individual for the year;

(b)  G is the amount by which the amount determined in respect of the individual for the year under paragraph b of section 28 exceeds the amount deemed by section 105.3 to be a taxable capital gain of the individual for the year; and

(c)  H is the aggregate of

i.  the amount deemed by section 105.3 to be a taxable capital gain of the individual for the year multiplied by

(1)  where that amount is the amount referred to in subparagraph a of the first paragraph of section 105.3, the reciprocal of the fraction obtained by multiplying 3/4 by the fraction in section 105.2 that applies to the individual for the year,

(2)  where that amount is the amount referred to in subparagraph b of the first paragraph of section 105.3 and the year does not end after 27 February 2000 and before 18 October 2000, 2, and

(3)  where that amount is the amount referred to in subparagraph b of the first paragraph of section 105.3 and the year ends after 27 February 2000 and before 18 October 2000, 3/2, and

ii.  the excess referred to in subparagraph b multiplied by the reciprocal of the fraction in paragraphs a to d of section 231.0.1 that applies to the individual for the year.

1987, c. 67, s. 142; 1990, c. 59, s. 260; 1994, c. 22, s. 249; 1996, c. 39, s. 181; 2003, c. 2, s. 200.