I-3 - Taxation Act

Section 598.1 Disposition versions

2009-06-04

598.1. For the purposes of this Part, an individual resident in Québec who is a shareholder of a corporation described in the second paragraph may agree, with the approval in writing of the Minister and subject to the terms and conditions set out in the approval, to apply the following rules for the period during which the agreement is effective:

(a)  the corporation is deemed to be a controlled foreign affiliate of the individual;

(b)  the income of the corporation is deemed to be foreign accrual property income of a controlled foreign affiliate of the individual;

(c)  for the purposes of section 146, the portion of the income that is included in computing the individual’s income for a taxation year is deemed not to be income from a property; and

(d)  the individual shall not include any amount in computing the individual’s income in respect of a dividend paid to the individual on a share of the capital stock of the corporation and shall deduct the amount of the dividend in computing the adjusted cost base to the individual of the share.

The corporation to which the first paragraph refers is an S corporation within the meaning of the United States Internal Revenue Code of 1986, as amended from time to time.

2000, c. 39, s. 36; 2009, c. 15, s. 92.

2006-03-01

598.1. For the purposes of this Part, an individual resident in Québec who is a shareholder of a corporation described in the second paragraph may agree, with the approval in writing of the Minister and subject to the terms and conditions set out in the approval, to apply the following rules for the period during which the agreement is effective:

(a)  the corporation is deemed to be a controlled foreign affiliate of the individual;

(b)  the income of the corporation is deemed to be foreign accrual property income of a controlled foreign affiliate of the individual;

(c)  for the purposes of section 146, the portion of the income that is included in computing the individual’s income for a taxation year is deemed not to be income from a property; and

(d)  the individual shall not include any amount in computing the individual’s income in respect of a dividend paid to the individual on a share of the capital stock of the corporation and shall deduct the amount of the dividend in computing the adjusted cost base to the individual of the share.

The corporation to which the first paragraph refers is an S corporation within the meaning of the United States Internal Revenue Code of 1986.

2000, c. 39, s. 36.