I-3 - Taxation Act

Section 656.2 Disposition versions

2006-03-01

656.2. Where a trust owns a Canadian resource property or a foreign resource property, other than an exempt property, at the end of a day determined under section 653 in respect of the trust, the following rules apply:

(a)  for the purpose of determining the amounts under paragraphs a, e and e.1 of section 330 and sections 371, 374, 411, 412, 418.1.3 to 418.1.5, 418.5, 418.6 and 418.12, the trust is deemed

i.  to have a taxation year that ends at the end of that day and a new taxation year that begins immediately after that day, and

ii.  to have disposed, immediately before the end of the taxation year so deemed to end, of each of those Canadian resource properties and foreign resource properties for proceeds that became receivable at that time equal to its fair market value at that time and to have reacquired, at the beginning of the new taxation year, each such property for an amount equal to that fair market value; and

(b)  for the particular taxation year of the trust that included that day, the trust shall

i.  include in computing its income for the particular taxation year the amount, if any, determined under paragraph e of section 330 in respect of the taxation year deemed to end in accordance with subparagraph i of paragraph a and the amount so included is, for the purposes of paragraph b of section 411, deemed to have been included in computing its income for a preceding taxation year,

i.1.  include in computing its income for the particular taxation year any amount determined under paragraph e.1 of section 330 in respect of the taxation year deemed to end in accordance with subparagraph i of paragraph a and the amount so included is, for the purposes of paragraph b of section 418.1.3, deemed to have been included in computing its income for a preceding taxation year, and

ii.  deduct in computing its income for the particular taxation year the amount, if any, determined under sections 371 and 374 in respect of the taxation year deemed to end in accordance with subparagraph i of paragraph a and the amount so deducted is, for the purposes of paragraph a of section 371, deemed to have been deducted for a preceding taxation year.

1986, c. 19, s. 135; 2004, c. 8, s. 133.