I-3 - Taxation Act

Section 104.4 Disposition versions

2006-03-01

104.4. A taxpayer, who is an individual or a corporation, shall include in computing the taxpayer’s income for a taxation year from a business the amount referred to in the second paragraph, if

(a)  an amount was deducted, in respect of depreciable property of a prescribed class, in computing the taxpayer’s income from a business for a preceding taxation year under section 156.5; and

(b)  an amount in respect of the depreciable property, in this section referred to as the “particular amount”, that is an amount of assistance described in section 101 or an amount deducted by the taxpayer in respect of the property under subsection 5 or 6 of section 127 of the Income Tax Act (Revised Statutes of Canada, 1985, chapter 1, 5th Supplement), is taken into account for the first time for the purpose of determining, at any time in the year, the capital cost to the taxpayer of the property or the undepreciated capital cost of the taxpayer’s property of that class.

The amount referred to in the first paragraph that the taxpayer is required to include in computing the taxpayer’s income for the year is equal to 25% of the amount determined by the formula

A × (B / C).

In the formula provided for in the second paragraph,

(a)  A is the lesser of

i.  the aggregate of all amounts each of which is, for the taxpayer, a particular amount in respect of the depreciable property for the year, and

ii.  the amount included in computing the taxpayer’s income for the year under section 94 in respect of the depreciable property;

(b)  B is

i.  where the taxpayer is an individual, the aggregate of the individual’s income earned in Québec and elsewhere for the year, and

ii.  where the taxpayer is a corporation, the aggregate of the business carried on in Canada or in Québec and elsewhere by the corporation in the year; and

(c)  C is

i.  where the taxpayer is an individual, the individual’s income earned in Québec for the year, and

ii.  where the taxpayer is a corporation, the business carried on in Québec by the corporation in the year.

2000, c. 39, s. 11.