I-3 - Taxation Act

Section 157.2.2 Disposition versions

2021-06-02

157.2.2. There may be deducted in computing a taxpayer’s income for a taxation year in respect of a derivative forward agreement, the amount determined by the formula

A - B.

In the formula in the first paragraph,

(a)  A is the lesser of

i.  the total of all amounts each of which is

(1)  if the taxpayer acquires a property under the agreement in the year or a preceding taxation year, the portion of the amount by which the cost to the taxpayer of the property exceeds the fair market value of the property at the time it is acquired by the taxpayer that is attributable to an underlying interest other than an underlying interest referred to in any of subparagraphs i to iii of paragraph b of the definition of “derivative forward agreement” in section 1, or

(2)  if the taxpayer disposes of a property under the agreement in the year or a preceding taxation year, the portion of the amount by which the fair market value of the property at the time the agreement is entered into by the taxpayer exceeds the proceeds of disposition, within the meaning of section 251, of the property that is attributable to an underlying interest other than an underlying interest referred to in any of subparagraphs 1 to 3 of subparagraph i of paragraph c of the definition of “derivative forward agreement” in section 1, and

ii.  the amount that is,

(1)  if final settlement of the agreement occurs in the year and it cannot reasonably be considered that one of the main reasons for entering into the agreement is to obtain a deduction under this section, the amount determined under subparagraph i, or

(2)  in any other case, the total of all amounts included in computing the taxpayer’s income under paragraph z.7 of section 87 in respect of the agreement for the year or a preceding taxation year; and

(b)  B is the total of all amounts deducted under this section in respect of the agreement for a preceding taxation year.

2015, c. 24, s. 32; 2021, c. 14, s. 28.

2015-10-26

157.2.2. There may be deducted in computing a taxpayer’s income for a taxation year in respect of a derivative forward agreement, the amount determined by the formula

A - B.

In the formula in the first paragraph,

(a)  A is the lesser of

i.  the total of all amounts each of which is

(1)  if the taxpayer acquires property under the agreement in the year or a preceding taxation year, the amount by which the cost to the taxpayer of the property exceeds the fair market value of the property at the time it is acquired by the taxpayer, or

(2)  if the taxpayer disposes of property under the agreement in the year or a preceding taxation year, the amount by which the fair market value of the property at the time the agreement is entered into exceeds the proceeds of disposition, within the meaning of section 251, of the property, and

ii.  the amount that is,

(1)  if final settlement of the agreement occurs in the year and it cannot reasonably be considered that one of the main reasons for entering into the agreement is to obtain a deduction under this section, the amount determined under subparagraph i, or

(2)  in any other case, the total of all amounts included in computing the taxpayer’s income under paragraph z.7 of section 87 in respect of the agreement for the year or a preceding taxation year; and

(b)  B is the total of all amounts deducted under this section in respect of the agreement for a preceding taxation year.

2015, c. 24, s. 32.