I-3 - Taxation Act

Section 149 Disposition versions

2006-03-01

149. Where a taxpayer has in a taxation year disposed of depreciable property to a person with whom he was dealing at arm’s length and the proceeds of disposition, within the meaning assigned by subparagraph f of the first paragraph of section 93, include an agreement to sell, or a hypothecary claim or mortgage on, land that the taxpayer has, in a subsequent taxation year, sold to a person with whom he was dealing at arm’s length, he may deduct in computing his income for the subsequent year the lesser of

(a)  the amount by which the principal amount of the agreement to sell or the obligation outstanding at the time of the sale exceeds the consideration paid by the purchaser to the taxpayer for the agreement to sell or the obligation; and

(b)  the amount determined under subparagraph a less the amount by which the proceeds of disposition of the depreciable property exceed the capital cost of that property.

However, in the case of the disposition of a timber resource property, the taxpayer may deduct the amount described in subparagraph a of the first paragraph.

1972, c. 23, s. 137; 1975, c. 22, s. 18; 1996, c. 39, s. 48; 2001, c. 53, s. 260; 2005, c. 1, s. 62.