I-3 - Taxation Act

Section 851.22.13 Disposition versions

2006-03-01

851.22.13. Subject to the second paragraph, where a taxpayer has, in a taxation year and after 22 February 1994, disposed of a specified debt obligation,

(a)  section 851.22.11 does not apply to the disposition;

(b)  there shall be included in computing the taxpayer’s income for the year the amount by which the taxpayer’s proceeds of disposition exceed the tax basis of the obligation to the taxpayer immediately before the disposition; and

(c)  there shall be deducted in computing the taxpayer’s income for the year the amount by which the tax basis of the obligation to the taxpayer immediately before the disposition exceeds the taxpayer’s proceeds of disposition.

The first paragraph applies only where

(a)  the obligation is an indexed debt obligation, other than a prescribed obligation, or a debt obligation prescribed in respect of the taxpayer; or

(b)  the disposition occurred before 1 January 1995, after 31 December 1994 in connection with the transfer of all or part of a business of the taxpayer to a person or partnership, because of paragraph c of section 851.22.23, or before 1 January 1996 where the taxpayer, other than a life insurance corporation, elects to have this section apply by notifying the Minister of Revenue in writing on or before the taxpayer’s filing-due date for the taxpayer’s taxation year that includes 23 May 2001.

Where a taxpayer elects under subparagraph b of the second paragraph, the Minister shall, for the purposes of Part I and notwithstanding sections 1010 to 1011, make such assessment or reassessment of the taxpayer’s tax, interest and penalties as is necessary for any taxation year to give effect to the election.

1996, c. 39, s. 235; 1997, c. 3, s. 71; 2001, c. 7, s. 128.