I-3 - Taxation Act

Section 238.1 Disposition versions

2017-02-08

238.1. The rules in the second paragraph apply where

(a)  a corporation, trust or partnership, in this section referred to as the “transferor”, disposes of a particular capital property, other than depreciable property of a prescribed class, otherwise than in a disposition described in any of paragraphs a to e of section 238;

(b)  during the period that begins 30 days before and ends 30 days after the time of disposition, the transferor or a person affiliated with the transferor acquires a property, in this section referred to as the “substituted property”, that is, or is identical to, the particular capital property; and

(c)  at the end of the 30 days following the time of disposition, the transferor or a person affiliated with the transferor owns the substituted property.

The rules to which the first paragraph refers are as follows:

(a)  the transferor’s loss from the disposition is not allowable;

(b)  the amount of the transferor’s loss from the disposition, determined without reference to this paragraph and sections 237, 240, 241 and 288, is deemed to be a loss of the transferor from a disposition of the particular capital property at the time that is immediately before the first time, after the time of disposition,

i.  at which a 30-day period begins throughout which neither the transferor nor a person affiliated with the transferor owns the substituted property, or a property that is identical to the substituted property and that was acquired after the day that is 31 days before the period begins,

ii.  at which the substituted property would, if it were owned by the transferor, be deemed under Chapter I of Title I.1 of Book VI or section 999.1 to have been disposed of by the transferor,

iii.  that is immediately before the transferor is subject to a loss restriction event,

iv.  at which the transferor or a person affiliated with the transferor is deemed under Division XII of Chapter IV to have disposed of the substituted property, where the substituted property is a debt or a share of the capital stock of a corporation, or

v.  at which the winding-up of the transferor begins, other than a winding-up referred to in section 556, where the transferor is a corporation; and

(c)  for the purposes of subparagraph b, where a partnership otherwise ceases to exist at any time after the time of disposition,

i.  the partnership is deemed not to have ceased to exist until the time that is immediately after the first time described in subparagraphs i to v of subparagraph b, and

ii.  each person who was a member of the partnership immediately before the partnership would, but for this paragraph, have ceased to exist is deemed to remain a member of the partnership, until the time that is immediately after the first time described in subparagraphs i to v of subparagraph b.

2000, c. 5, s. 64; 2004, c. 8, s. 46; 2017, c. 1, s. 107.

2006-03-01

238.1. The rules in the second paragraph apply where

(a)  a corporation, trust or partnership, in this section referred to as the “transferor”, disposes of a particular capital property, other than depreciable property of a prescribed class, otherwise than in a disposition described in any of paragraphs a to e of section 238;

(b)  during the period that begins 30 days before and ends 30 days after the time of disposition, the transferor or a person affiliated with the transferor acquires a property, in this section referred to as the “substituted property”, that is, or is identical to, the particular capital property; and

(c)  at the end of the 30 days following the time of disposition, the transferor or a person affiliated with the transferor owns the substituted property.

The rules to which the first paragraph refers are as follows:

(a)  the transferor’s loss from the disposition is not allowable;

(b)  the amount of the transferor’s loss from the disposition, determined without reference to this paragraph and sections 237, 240, 241 and 288, is deemed to be a loss of the transferor from a disposition of the particular capital property at the time that is immediately before the first time, after the time of disposition,

i.  at which a 30-day period begins throughout which neither the transferor nor a person affiliated with the transferor owns the substituted property, or a property that is identical to the substituted property and that was acquired after the day that is 31 days before the period begins,

ii.  at which the substituted property would, if it were owned by the transferor, be deemed under Chapter I of Title I.1 of Book VI or section 999.1 to have been disposed of by the transferor,

iii.  that is immediately before control of the transferor is acquired by a person or group of persons, where the transferor is a corporation,

iv.  at which the transferor or a person affiliated with the transferor is deemed under Division XII of Chapter IV to have disposed of the substituted property, where the substituted property is a debt or a share of the capital stock of a corporation, or

v.  at which the winding-up of the transferor begins, other than a winding-up referred to in section 556, where the transferor is a corporation; and

(c)  for the purposes of subparagraph b, where a partnership otherwise ceases to exist at any time after the time of disposition,

i.  the partnership is deemed not to have ceased to exist until the time that is immediately after the first time described in subparagraphs i to v of subparagraph b, and

ii.  each person who was a member of the partnership immediately before the partnership would, but for this paragraph, have ceased to exist is deemed to remain a member of the partnership, until the time that is immediately after the first time described in subparagraphs i to v of subparagraph b.

2000, c. 5, s. 64; 2004, c. 8, s. 46.