I-3 - Taxation Act

Section 485.30 Disposition versions

2006-03-01

485.30. Where the consideration given by a corporation to another person for the settlement or extinguishment at any time of a commercial debt obligation that was issued by the corporation and owned immediately before that time by the other person includes a distress preferred share issued by the corporation to the other person,

(a)  for the purposes of sections 485 to 485.18, the amount paid at that time in satisfaction of the principal amount of the obligation because of the issue of that share is deemed to be equal to the lesser of the principal amount of the obligation and the amount by which the paid-up capital in respect of the class of shares that includes that share increases because of the issue of that share; and

(b)  for the purposes of subparagraph i of paragraph b of section 485.29, the amount for which the share was issued is deemed to be equal to the amount deemed by paragraph a to have been paid at that time.

1996, c. 39, s. 142; 1997, c. 3, s. 71.