I-3 - Taxation Act

Section 725.2.3 Disposition versions

2006-03-01

725.2.3. Where an individual, in exercising a right to acquire a security that a qualifying person has agreed to sell or issue to the individual under an agreement referred to in section 48, directs a broker or dealer appointed by the qualifying person, or by another qualifying person that does not deal at arm’s length with the qualifying person, to immediately dispose of the security and pay all or a portion of the proceeds of disposition of the security to a qualified donee, the following rules apply:

(a)  if the payment is a gift, the individual is deemed, for the purposes of section 725.2.2, to have disposed of the security to the qualified donee at the time the payment is made; and

(b)  the amount deductible under section 725.2.2 by the individual in respect of the disposition of the security is the amount determined by the formula

A × B / C.

In the formula provided for in subparagraph b of the first paragraph,

(a)  A is the amount that would be deductible under section 725.2.2 in respect of the disposition of the security if this section were read without reference to subparagraph b of the first paragraph;

(b)  B is the amount of the payment; and

(c)  C is the amount of the proceeds of disposition of the security.

2003, c. 2, s. 196.