I-3 - Taxation Act

Section 485.8 Disposition versions

2006-03-01

485.8. Where a commercial obligation issued by a debtor is settled at any time, the remaining unapplied portion of the forgiven amount at the time of settlement of the obligation in respect of the obligation shall be applied, to the extent designated in a prescribed form filed with the debtor’s fiscal return under this Part for the taxation year that includes that time, to reduce immediately after that time the following amounts:

(a)  where the debtor is a corporation resident in Canada throughout that year, each particular amount determined in respect of the debtor under the second paragraph of any of sections 418.17, 418.18 and 418.19, or that would be so determined under the second paragraph of section 418.17.3 or 418.21 if that second paragraph were read without reference to “30% of” or “10% of”, as the case may be, as a consequence of the acquisition of control of the debtor by a person or group of persons, the debtor ceasing to be exempt from tax under this Part on its taxable income or the acquisition of properties by the debtor as a result of an amalgamation or merger, where the amount so applied does not exceed the successor pool immediately after that time for the obligation and in respect of the particular amount;

(b)  the cumulative Canadian exploration expense, within the meaning assigned by section 398, of the debtor;

(c)  the cumulative Canadian development expense, within the meaning assigned by section 411, of the debtor;

(d)  the cumulative Canadian oil and gas property expense, within the meaning assigned by section 418.5, of the debtor;

(e)  the amount determined under paragraph a of section 371 in respect of the debtor, where

i.  the debtor is resident in Canada throughout that year, and

ii.  the amount so applied does not exceed such portion of the aggregate of the debtor’s foreign exploration and development expenses as were incurred by the debtor before that time and would be deductible under section 371 in computing the debtor’s income for that year if the aggregate determined in respect of the debtor under paragraph b of section 374 were sufficient and if that year ended at that time; and

(f)  the cumulative foreign resource expense of the debtor, in relation to a country, within the meaning of section 418.1.3.

1996, c. 39, s. 142; 1997, c. 3, s. 71; 1998, c. 16, s. 168; 2004, c. 8, s. 103.