I-3 - Taxation Act

Section 1129.70.1 Disposition versions

2020-09-24

1129.70.1. The second paragraph applies to an entity for a taxation year in respect of an amount and another entity (in this section referred to as the “parent entity”, “specified amount” and “source entity”, respectively), if

(a)  at any time in the taxation year the parent entity is affiliated with the source entity or holds securities of the source entity that are described in any of paragraphs a to c of the definition of “equity” in the first paragraph of section 1129.70 and have a fair market value that is greater than the amount that is 10% of the equity value of the source entity;

(b)  the specified amount is included in computing the parent entity’s determined gross revenue for the taxation year in respect of a security of the source entity held by the parent entity; and

(c)  in the case of a source entity that is described in paragraph b of the definition of “qualified property” in the first paragraph of section 1129.70 in respect of the parent entity at each time during the taxation year at which the parent entity holds securities of the source entity, the specified amount cannot reasonably be considered to be derived from the source entity’s determined gross revenue from maintaining, improving, leasing or managing immovable properties that are capital properties of the parent entity or of an entity of which the parent entity holds a share or an interest, including immovable properties that the parent entity, or an entity of which the parent entity holds a share or an interest, holds together with one or more other persons or partnerships.

For the purposes of the definition of “real estate investment trust” in the first paragraph of section 1129.70, the specified amount, to the extent that it can reasonably be considered to be derived from the source entity’s determined gross revenue, is deemed to be included in the parent entity’s determined gross revenue and to have the same character as that of the source entity and not any other character.

2017, c. 1, s. 386; 2020, c. 16, s. 186.

2017-02-08

1129.70.1. The second paragraph applies to an entity for a taxation year in respect of an amount and another entity (in this section referred to as the “parent entity”, “specified amount” and “source entity”, respectively), if

(a)  at any time in the taxation year the parent entity is affiliated with the source entity or holds securities of the source entity that are described in any of paragraphs a to c of the definition of “equity” in the first paragraph of section 1129.70 and have a fair market value that is greater than the amount that is 10% of the equity value of the source entity;

(b)  the specified amount is included in computing the parent entity’s determined gross revenue for the taxation year in respect of a security of the source entity held by the parent entity; and

(c)  in the case of a source entity that is described in paragraph b of the definition of “qualified property” in the first paragraph of section 1129.70 in respect of the parent entity at each time during the taxation year at which the parent entity holds securities of the source entity, the specified amount cannot reasonably be considered to be derived from the source entity’s determined gross revenue from maintaining, improving, leasing or managing real or immovable properties that are capital properties of the parent entity or of an entity of which the parent entity holds a share or an interest, including real or immovable properties that the parent entity, or an entity of which the parent entity holds a share or an interest, holds together with one or more other persons or partnerships.

For the purposes of the definition of “real estate investment trust” in the first paragraph of section 1129.70, the specified amount, to the extent that it can reasonably be considered to be derived from the source entity’s determined gross revenue, is deemed to be included in the parent entity’s determined gross revenue and to have the same character as that of the source entity and not any other character.

2017, c. 1, s. 386.