I-3 - Taxation Act

Section 485.20 Disposition versions

2006-03-01

485.20. Where a commercial obligation or another obligation, in this section referred to as the “indebtedness”, of a debtor that is a corporation to pay an amount to a creditor that is another corporation is settled on an amalgamation of the debtor and the creditor, the indebtedness is deemed to have been settled immediately before the time that is immediately before the amalgamation by a payment made by the debtor and received by the creditor of an amount that would be the creditor’s cost amount of the indebtedness at that time if the definition of “cost amount” in section 1 were read without reference to paragraph e of that definition and if that cost amount included amounts added in computing the creditor’s income in respect of the portion of the indebtedness representing unpaid interest, to the extent those amounts have not been deducted in computing the creditor’s income as bad debts in respect of that unpaid interest.

1996, c. 39, s. 142; 1997, c. 3, s. 71.