I-3 - Taxation Act

Section 485.9 Disposition versions

2019-06-19

485.9. Subject to section 485.18, where a commercial obligation issued by a debtor is settled at any time and amounts have been designated by the debtor under sections 485.6 and 485.8 to the maximum extent permitted in respect of the settlement of the obligation, the following rules apply:

(a)  the remaining unapplied portion of the forgiven amount at that time 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 adjusted cost bases to the debtor of capital properties, other than shares of the capital stock of corporations of which the debtor is a specified shareholder at that time, debts issued by corporations of which the debtor is a specified shareholder at that time, interests in partnerships that are related to the debtor at that time, depreciable property that is not of a prescribed class, personal-use properties and excluded properties, that are owned by the debtor immediately after that time;

(b)  an amount may be applied under this section to reduce, immediately after that time, the capital cost to the debtor of a depreciable property of a prescribed class only to the extent that the capital cost immediately after that time to the debtor of the property, determined without reference to the settlement of the obligation at that time, exceeds the capital cost of the property immediately after that time to the debtor for the purposes of sections 64, 78.4, 93 to 104, 130 and 130.1 and any regulations made under paragraph a of section 130 or section 130.1, determined without reference to the settlement of the obligation at that time; and

(c)  for the purposes of sections 64, 78.4, 93 to 104, 130 and 130.1 and any regulations made under paragraph a of section 130 or section 130.1, no amount shall be considered to have been applied under this section.

1996, c. 39, s. 142; 1997, c. 3, s. 71; 2019, c. 14, s. 137.

2006-03-01

485.9. Subject to section 485.18, where a commercial obligation issued by a debtor is settled at any time and amounts have been designated under sections 485.6 to 485.8 to the maximum extent permitted in respect of the settlement of the obligation,

(a)  the remaining unapplied portion of the forgiven amount at that time 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 adjusted cost bases to the debtor of capital properties, other than shares of the capital stock of corporations of which the debtor is a specified shareholder at that time, debts issued by corporations of which the debtor is a specified shareholder at that time, interests in partnerships that are related to the debtor at that time, depreciable property that is not of a prescribed class, personal-use properties and excluded properties, that are owned by the debtor immediately after that time;

(b)  an amount may be applied under this section to reduce, immediately after that time, the capital cost to the debtor of a depreciable property of a prescribed class only to the extent that the capital cost immediately after that time to the debtor of the property, determined without reference to the settlement of the obligation at that time, exceeds the capital cost of the property immediately after that time to the debtor for the purposes of sections 64, 78.4, 93 to 104, 130 and 130.1 and any regulations made under paragraph a of section 130 or section 130.1, determined without reference to the settlement of the obligation at that time; and

(c)  for the purposes of sections 64, 78.4, 93 to 104, 130 and 130.1 and any regulations made under paragraph a of section 130 or section 130.1, no amount shall be considered to have been applied under this section.

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