I-3 - Taxation Act

Section 97.2 Disposition versions

2020-09-24

97.2. Where, at any time, a taxpayer acquires a capital property that is depreciable property or immovable property in respect of which, before that time, the taxpayer or any person with whom he was not dealing at arm’s length was entitled to a deduction in computing his income in respect of any amount paid or payable for the use of, or the right to use, the property and the cost or the capital cost, determined without reference to this section, at that time of the property to the taxpayer is less than the fair market value thereof at that time determined without reference to any option with respect to that property, for the purposes of this division, sections 130, 130.1, 142 and 149 and any regulations made under paragraph a of section 130 or under section 130.1, the following rules apply:

(a)  the taxpayer is deemed to acquire the property at that time at a cost equal to the lesser of the fair market value of the property at that time determined without reference to any option with respect to that property, and the aggregate of the cost or the capital cost, determined without reference to this section, of the property to the taxpayer and all amounts each of which is an outlay or expense made or incurred by the taxpayer or by a person with whom he was not dealing at arm’s length at any time for the use of, or the right to use, the property, other than amounts paid or payable to a person with whom the taxpayer was not dealing at arm’s length;

(b)  the taxpayer shall add, to the total depreciation allowed to him before that time in respect of the prescribed class to which the property belongs, the amount by which the cost of the property determined under paragraph a exceeds the cost or the capital cost thereof, determined without reference to this section; and

(c)  where the property would, but for this paragraph, not be depreciable property of the taxpayer, it is deemed to be depreciable property of a separate prescribed class of the taxpayer.

1982, c. 5, s. 29; 2020, c. 16, s. 190.

2006-03-01

97.2. Where, at any time, a taxpayer acquires a capital property that is depreciable property or real property in respect of which, before that time, the taxpayer or any person with whom he was not dealing at arm’s length was entitled to a deduction in computing his income in respect of any amount paid or payable for the use of, or the right to use, the property and the cost or the capital cost, determined without reference to this section, at that time of the property to the taxpayer is less than the fair market value thereof at that time determined without reference to any option with respect to that property, for the purposes of this division, sections 130, 130.1, 142 and 149 and any regulations made under paragraph a of section 130 or under section 130.1, the following rules apply:

(a)  the taxpayer is deemed to acquire the property at that time at a cost equal to the lesser of the fair market value of the property at that time determined without reference to any option with respect to that property, and the aggregate of the cost or the capital cost, determined without reference to this section, of the property to the taxpayer and all amounts each of which is an outlay or expense made or incurred by the taxpayer or by a person with whom he was not dealing at arm’s length at any time for the use of, or the right to use, the property, other than amounts paid or payable to a person with whom the taxpayer was not dealing at arm’s length;

(b)  the taxpayer shall add, to the total depreciation allowed to him before that time in respect of the prescribed class to which the property belongs, the amount by which the cost of the property determined under paragraph a exceeds the cost or the capital cost thereof, determined without reference to this section; and

(c)  where the property would, but for this paragraph, not be depreciable property of the taxpayer, it is deemed to be depreciable property of a separate prescribed class of the taxpayer.

1982, c. 5, s. 29.