I-3 - Taxation Act

Section 485.13 Disposition versions

2019-06-19

485.13. Where a commercial obligation issued by a debtor is settled at any time in a taxation year, there shall be added, in computing the debtor’s income for the year from the source in connection with which the obligation was issued, the amount determined by the formula

(A + B − C − D) × E.

For the purposes of the formula in the first paragraph,

(a)  A is the remaining unapplied portion of the forgiven amount at that time in respect of the obligation;

(b)  B is the lesser of

i.  the aggregate of all amounts designated under section 485.11 by the debtor in respect of the settlement of the obligation at that time, and

ii.  the residual balance at that time in respect of the settlement of the obligation;

(c)  C is the aggregate of the amounts each of which is an amount specified in an agreement filed under subdivision 6 in respect of the settlement of the obligation at that time;

(d)  D is

i.  where the debtor has designated amounts under sections 485.6 and 485.8 to 485.10 to the maximum extent permitted in respect of the settlement of the obligation, the amount by which the aggregate of all amounts each of which is an unrecognized loss at that time, in respect of the obligation, from the disposition of a property exceeds, subject to the third paragraph, twice the aggregate of all amounts each of which is an amount by which the amount determined before that time under this section in respect of a settlement of an obligation issued by the debtor has been reduced because of an amount determined under this subparagraph i, and

ii.  in any other case, zero, and

(e)  E is equal to

i.  where the debtor is a partnership, 1, and

ii.  in any other case, subject to the third paragraph, 1/2.

However, where the taxation year of the debtor includes 28 February 2000 or 17 October 2000, or begins after 28 February 2000 and ends before 17 October 2000, the following rules apply:

(a)  the reference to the word “twice” in subparagraph i of subparagraph d of the second paragraph shall be read, with the necessary modifications, as a reference to the fraction that is the reciprocal of the fraction in paragraphs a to d of section 231.0.1 that applies to the debtor for the year; and

(b)  the reference to the fraction “1/2” in subparagraph ii of subparagraph e of the second paragraph shall be read as a reference to the fraction in paragraphs a to d of section 231.0.1 that applies to the debtor for the year.

1996, c. 39, s. 142; 1997, c. 3, s. 71; 2000, c. 5, s. 106; 2003, c. 2, s. 131; 2019, c. 14, s. 141.

2006-03-01

485.13. Where a commercial obligation issued by a debtor is settled at any time in a taxation year, there shall be added, in computing the debtor’s income for the year from the source in connection with which the obligation was issued, the amount determined by the formula

(A + B − C − D) × E.

For the purposes of the formula in the first paragraph,

(a)  A is the remaining unapplied portion of the forgiven amount at that time in respect of the obligation;

(b)  B is the lesser of

i.  the aggregate of all amounts designated under section 485.11 by the debtor in respect of the settlement of the obligation at that time, and

ii.  the residual balance at that time in respect of the settlement of the obligation;

(c)  C is the aggregate of the amounts each of which is an amount specified in an agreement filed under subdivision 6 in respect of the settlement of the obligation at that time;

(d)  D is

i.  where the debtor has designated amounts under sections 485.6 to 485.10 to the maximum extent permitted in respect of the settlement of the obligation, the amount by which the aggregate of the amounts each of which is an unrecognized loss at that time, in respect of the obligation, from the disposition of a property exceeds, subject to the third paragraph, twice the aggregate of the amounts each of which is an amount by which the amount determined before that time under this section in respect of a settlement of an obligation issued by the debtor has been reduced because of an amount determined under this subparagraph, and

ii.  in any other case, zero, and

(e)  E is equal to

i.  where the debtor is a partnership, 1, and

ii.  in any other case, subject to the third paragraph, 1/2.

However, where the taxation year of the debtor includes 28 February 2000 or 17 October 2000, or begins after 28 February 2000 and ends before 17 October 2000, the following rules apply:

(a)  the reference to the word “twice” in subparagraph i of subparagraph d of the second paragraph shall be read, with the necessary modifications, as a reference to the fraction that is the reciprocal of the fraction in paragraphs a to d of section 231.0.1 that applies to the debtor for the year; and

(b)  the reference to the fraction “1/2” in subparagraph ii of subparagraph e of the second paragraph shall be read as a reference to the fraction in paragraphs a to d of section 231.0.1 that applies to the debtor for the year.

1996, c. 39, s. 142; 1997, c. 3, s. 71; 2000, c. 5, s. 106; 2003, c. 2, s. 131.