I-3 - Taxation Act

Section 487.7 Disposition versions

2017-02-08

487.7. Where a synthetic disposition arrangement is entered into in respect of a property owned by a taxpayer and the synthetic disposition period of the arrangement is at least one year, the taxpayer is deemed

(a)  to have disposed of the property immediately before the beginning of the synthetic disposition period for proceeds of disposition equal to its fair market value at the beginning of the synthetic disposition period; and

(b)  to have reacquired the property at the beginning of the synthetic disposition period at a cost equal to its fair market value at the beginning of the synthetic disposition period.

The first paragraph does not apply in respect of a property owned by a taxpayer where

(a)  the disposition referred to in the first paragraph would not result in the realization of a capital gain or income;

(b)  the property of the taxpayer is a mark-to-market property (within the meaning of the first paragraph of section 851.22.1);

(c)  the synthetic disposition arrangement referred to in the first paragraph is a lease of corporeal property;

(d)  the arrangement is an exchange of property to which section 301 applies; or

(e)  the property is disposed of as part of the arrangement, within one year after the day on which the synthetic disposition period of the arrangement begins.

2017, c. 1, s. 131.