I-3 - Taxation Act

Section 300 Disposition versions

2006-03-01

300. Where, at the end of a taxation year, a taxpayer establishes that a debt which is a personal-use property and which is then owing to him by a person with whom he deals at arm’s length is a bad debt for the year, such taxpayer is deemed:

(a)  to have disposed of it at that time for proceeds equal to the excess of the adjusted cost base of such property, immediately before the end of the year, over his gain derived from the disposition of the personal-use property the proceeds of disposition of which included the debt; and

(b)  to have reacquired it, immediately after the end of that year, at a cost equal to the proceeds established under paragraph a.

1972, c. 23, s. 276; 1986, c. 19, s. 54; 1995, c. 49, s. 236.