I-3 - Taxation Act

Section 726.7.1 Disposition versions

2021-12-10

726.7.1. 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 in the year or a preceding taxation year and after 17 June 1987 of a share of a corporation that, at the time of disposition, was a qualified small business corporation share of the individual, an amount equal to the least of

(a)  the amount that would be determined by the formula in subparagraph a of the first paragraph of section 726.7 in respect of the individual for the year, if that formula were read as if “$500,000” were replaced by “$400,000”;

(b)  the amount by which his cumulative gains limit at the end of the year exceeds the amount deducted under section 726.7 in computing his taxable income for the year;

(c)  the amount by which his annual gains limit for the year exceeds the amount deducted under section 726.7 in computing his taxable income for the year;

(d)  the amount that would be determined in respect of the individual for the year under paragraph b of section 28, to the extent that that amount is not included in computing the amount determined in respect of the individual under subparagraph d of the first paragraph of section 726.7, in respect of capital gains and capital losses if the only properties referred to in paragraph b of section 28 were qualified small business corporation shares of the individual; 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 small business corporation shares 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 shares, the amount that the individual specifies and that is not less than that maximum amount.

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 b 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 small business corporation shares.

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 small business corporation shares.

1990, c. 59, s. 261; 1996, c. 39, s. 182; 1997, c. 3, s. 71; 2003, c. 2, s. 201; 2007, c. 12, s. 77; 2009, c. 5, s. 245; 2015, c. 24, s. 96; 2017, c. 1, s. 173; 2017, c. 29, s. 102; 2021, c. 36, s. 73.

2017-12-07

726.7.1. 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 in the year or a preceding taxation year and after 17 June 1987 of a share of a corporation that, at the time of disposition, was a qualified small business corporation share of the individual, an amount equal to the least of

(a)  the amount that would be determined by the formula in subparagraph a of the first paragraph of section 726.7 in respect of the individual for the year, if that formula were read as if “$500,000” were replaced by “$400,000”;

(b)  the amount by which his cumulative gains limit at the end of the year exceeds the amount deducted under section 726.7 in computing his taxable income for the year;

(c)  the amount by which his annual gains limit for the year exceeds the amount deducted under section 726.7 in computing his taxable income for the year;

(d)  the amount that would be determined in respect of the individual for the year under paragraph b of section 28, to the extent that that amount is not included in computing the amount determined in respect of the individual under subparagraph d of the first paragraph of section 726.7, in respect of capital gains and capital losses if the only properties referred to in paragraph b of section 28 were qualified small business corporation shares of the individual; 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 small business corporation shares 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 shares, the amount that the individual specifies and that is not less than that maximum amount.

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 b 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 small business corporation shares.

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 small business corporation shares.

1990, c. 59, s. 261; 1996, c. 39, s. 182; 1997, c. 3, s. 71; 2003, c. 2, s. 201; 2007, c. 12, s. 77; 2009, c. 5, s. 245; 2015, c. 24, s. 96; 2017, c. 1, s. 173; 2017, c. 29, s. 102.

2017-02-08

726.7.1. 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 in the year or a preceding taxation year and after 17 June 1987 of a share of a corporation that, at the time of disposition, was a qualified small business corporation share of the individual, an amount equal to the least of

(a)  the amount that would be determined by the formula in subparagraph a of the first paragraph of section 726.7 in respect of the individual for the year, if that formula were read as if “$500,000” were replaced by “$400,000”;

(b)  the amount by which his cumulative gains limit at the end of the year exceeds the amount deducted under section 726.7 in computing his taxable income for the year;

(c)  the amount by which his annual gains limit for the year exceeds the amount deducted under section 726.7 in computing his taxable income for the year;

(d)  the amount that would be determined in respect of the individual for the year under paragraph b of section 28, to the extent that the amount is not included in determining the amount in respect of the individual under subparagraph d of the first paragraph of section 726.7 or subparagraph d of the first paragraph of section 726.7.2, in respect of capital gains and capital losses if the only properties referred to in paragraph b of section 28 were qualified small business corporation shares 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 small business corporation shares 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 shares, the amount that the individual specifies and that is not less than that maximum amount.

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 c 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 small business corporation shares.

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 small business corporation shares.

1990, c. 59, s. 261; 1996, c. 39, s. 182; 1997, c. 3, s. 71; 2003, c. 2, s. 201; 2007, c. 12, s. 77; 2009, c. 5, s. 245; 2015, c. 24, s. 96; 2017, c. 1, s. 173.

2015-10-26

726.7.1. 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 in the year or a preceding taxation year and after 17 June 1987 of a share of a corporation that, at the time of disposition, was a qualified small business corporation share of the individual, an amount equal to the least of

(a)  the amount that would be determined by the formula in subparagraph a of the first paragraph of section 726.7 in respect of the individual for the year, if that formula were read as if “$500,000” were replaced by “$400,000”;

(b)  the amount by which his cumulative gains limit at the end of the year exceeds the amount deducted under section 726.7 in computing his taxable income for the year;

(c)  the amount by which his annual gains limit for the year exceeds the amount deducted under section 726.7 in computing his taxable income for the year;

(d)  the amount that would be determined in respect of the individual for the year under paragraph b of section 28, to the extent that the amount is not included in determining the amount in respect of the individual under subparagraph d of the first paragraph of section 726.7 or subparagraph d of the first paragraph of section 726.7.2, in respect of capital gains and capital losses if the only properties referred to in paragraph b of section 28 were qualified small business corporation shares 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 small business corporation shares 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 shares, the amount that the individual specifies and that is not less than that maximum amount.

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 small business corporation shares.

1990, c. 59, s. 261; 1996, c. 39, s. 182; 1997, c. 3, s. 71; 2003, c. 2, s. 201; 2007, c. 12, s. 77; 2009, c. 5, s. 245; 2015, c. 24, s. 96.

2009-05-15

726.7.1. 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 in the year or a preceding taxation year and after 17 June 1987 of a share of a corporation that, at the time of disposition, was a qualified small business corporation share of the individual, an amount equal to the least of

(a)  the amount determined by the formula provided for in subparagraph a of the first paragraph of section 726.7 in respect of the individual for the year;

(b)  the amount by which his cumulative gains limit at the end of the year exceeds the amount deducted under section 726.7 in computing his taxable income for the year;

(c)  the amount by which his annual gains limit for the year exceeds the amount deducted under section 726.7 in computing his taxable income for the year;

(d)  the amount that would be determined in respect of the individual for the year under paragraph b of section 28, to the extent that the amount is not included in determining the amount in respect of the individual under subparagraph d of the first paragraph of section 726.7 or subparagraph d of the first paragraph of section 726.7.2, in respect of capital gains and capital losses if the only properties referred to in paragraph b of section 28 were qualified small business corporation shares 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 small business corporation shares 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 shares, the amount that the individual specifies and that is not less than that maximum amount.

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 small business corporation shares.

1990, c. 59, s. 261; 1996, c. 39, s. 182; 1997, c. 3, s. 71; 2003, c. 2, s. 201; 2007, c. 12, s. 77; 2009, c. 5, s. 245.

2007-11-07

726.7.1. 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 in the year or a preceding taxation year and after 17 June 1987 of a share of a corporation that, at the time of disposition, was a qualified small business corporation share of the individual, an amount equal to the least of

(a)  the amount determined by the formula provided for in subparagraph a of the first paragraph of section 726.7 in respect of the individual for the year;

(b)  the amount by which his cumulative gains limit at the end of the year exceeds the amount deducted under section 726.7 in computing his taxable income for the year;

(c)  the amount by which his annual gains limit for the year exceeds the amount deducted under section 726.7 in computing his taxable income for the year;

(d)  the amount that would be determined in respect of the individual for the year under paragraph b of section 28, to the extent that the amount is not included in determining the amount in respect of the individual under subparagraph d of the first paragraph of section 726.7 or paragraph d of section 726.7.2, in respect of capital gains and capital losses if the only properties referred to in paragraph b of section 28 were qualified small business corporation shares 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 small business corporation shares 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 shares, the amount that the individual specifies and that is not less than that maximum amount.

1990, c. 59, s. 261; 1996, c. 39, s. 182; 1997, c. 3, s. 71; 2003, c. 2, s. 201; 2007, c. 12, s. 77.

2006-03-01

726.7.1. 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 in the year or a preceding taxation year and after 17 June 1987 of a share of a corporation that, at the time of disposition, was a qualified small business corporation share of the individual, such amount as he may claim not exceeding the least of

(a)  the amount determined by the formula provided for in subparagraph a of the first paragraph of section 726.7 in respect of the individual for the year;

(b)  the amount by which his cumulative gains limit at the end of the year exceeds the amount deducted under section 726.7 in computing his taxable income for the year;

(c)  the amount by which his annual gains limit for the year exceeds the amount deducted under section 726.7 in computing his taxable income for the year;

(d)  the amount that would be determined in respect of the individual for the year under paragraph b of section 28, other than an amount included in determining the amount in respect of the individual under subparagraph d of the first paragraph of section 726.7, in respect of capital gains and capital losses if the only properties referred to in paragraph b of section 28 were qualified small business corporation shares disposed of by the individual after 17 June 1987 otherwise, where the year is the taxation year 1994 or 1995, than because of an election made under section 726.9.2.

1990, c. 59, s. 261; 1996, c. 39, s. 182; 1997, c. 3, s. 71; 2003, c. 2, s. 201.