I-3 - Taxation Act

Section 422.1 Disposition versions

2006-03-01

422.1. Where, at any time, a taxpayer disposed of property for proceeds of disposition, determined without reference to this section, equal to or greater than the fair market value at that time of the property, and there existed at that time an agreement under which a person with whom the taxpayer was not dealing at arm’s length agreed to pay as rent, royalty or other payment for the use of or the right to use the property an amount less than the amount that would have been reasonable in the circumstances if the taxpayer and the person had been dealing at arm’s length at the time the agreement was entered into, the proceeds of disposition of the property are deemed to be the greater of

(a)  such proceeds determined without reference to this section, and

(b)  the fair market value of the property at the time of the disposition, determined without reference to the existence of the agreement.

1994, c. 22, s. 157.