I-3 - Taxation Act

Section 726.9.6 Disposition versions

2006-03-01

726.9.6. Where an elector is deemed by section 726.9.2 to have disposed of an interest in a partnership, in computing the adjusted cost base to the elector of the interest immediately before the disposition

(a)  there shall be added the amount determined by the formula

(A − B) × (C / D) + E; and

(b)  there shall be deducted the amount determined by the formula

(B − A) × (C / D) − E.

For the purposes of the formulas in subparagraphs a and b of the first paragraph,

(a)  A is the aggregate of all amounts each of which is the elector’s share of the partnership’s income, other than a taxable capital gain from the disposition of a property, from a source in Canada or from sources in another place for its fiscal period that includes 22 February 1994, in this paragraph referred to as the “particular period” ;

(b)  B is the aggregate of all amounts each of which is the elector’s share of the partnership’s loss, other than an allowable capital loss from the disposition of a property, from a source in Canada or from sources in another place for the particular period;

(c)  C is the number of days in the period that begins the first day of the particular period and ends on 22 February 1994;

(d)  D is the number of days in the particular period; and

(e)  E is 4/3 of the amount that would be determined under paragraph b of section 28 in computing the elector’s income for the taxation year in which the particular period ends if the elector had no taxable capital gains or allowable capital losses other than those arising from dispositions of property by the partnership that occurred before 23 February 1994.

1996, c. 39, s. 186; 1997, c. 3, s. 71.