I-3 - Taxation Act

Section 157.10 Disposition versions

2009-05-15

157.10. Where an amount is included under paragraph a of section 87 in computing a taxpayer’s income for a taxation year in respect of an undertaking to which subparagraph i or ii of that paragraph applies and the taxpayer paid a reasonable amount in a particular taxation year to another person as consideration for the assumption by that other person of the taxpayer’s obligations in respect of the undertaking, the following rules apply if the taxpayer and the other person make a valid election under subsection 24 of section 20 of the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)) after 19 December 2006 in relation to the undertaking:

(a)  the payment may be deducted in computing the taxpayer’s income for the particular year;

(b)  no amount is deductible under section 150 or 150.1 in computing the taxpayer’s income for the particular year or any subsequent taxation year in respect of the undertaking; and

(c)  where the amount was received by the other person in carrying on a business, it is deemed to be an amount described in subparagraph i or ii of paragraph a of section 87.

Chapter V.2 of Title II of Book I applies in relation to an election made under subsection 24 of section 20 of the Income Tax Act or in relation to an election made under this section before 20 December 2006.

1986, c. 19, s. 29; 1994, c. 22, s. 107; 2009, c. 5, s. 61.

2006-03-01

157.10. Where an amount is included under paragraph a of section 87 in computing a taxpayer’s income for a taxation year in respect of an undertaking to which subparagraph i or ii of that paragraph applies and the taxpayer paid a reasonable amount in a particular taxation year to another person as consideration for the assumption by that other person of the taxpayer’s obligations in respect of the undertaking, if the taxpayer and the other person jointly so elect in the manner and within the time prescribed in section 157.11,

(a)  the payment may be deducted in computing the taxpayer’s income for the particular year;

(b)  no amount is deductible under section 150 or 150.1 in computing the taxpayer’s income for the particular year or any subsequent taxation year in respect of the undertaking; and

(c)  where the amount was received by the other person in carrying on a business, it is deemed to be an amount described in subparagraph i or ii of paragraph a of section 87.

1986, c. 19, s. 29; 1994, c. 22, s. 107.