I-3 - Taxation Act

Section 766.2 Disposition versions

2015-10-21

766.2. An individual’s tax otherwise payable for a particular taxation year is to be adjusted in accordance with the second paragraph if

(a)  the individual is not required to include, by reason of the second paragraph of section 312.5, an amount in computing the individual’s income for the particular taxation year;

(a.1)  the individual is not required to include, by reason of the second paragraph of section 694.0.0.1, an amount in computing taxable income for the particular taxation year;

(b)  the individual is required to include, by reason of section 694.0.1, an amount in computing the individual’s taxable income for the particular taxation year; or

(c)  the individual deducts, by reason of section 725.1.2, an amount in computing the individual’s taxable income, or the individual’s taxable income earned in Canada as determined under Part II, for the particular taxation year.

The adjustment to which the first paragraph refers is made in the following manner:

(a)  the amount of the adjustment, in relation to the particular taxation year, is equal to the aggregate of all amounts each of which is the amount of the tax adjustment relating to the averaging, determined in respect of the individual, that is attributable to a preceding taxation year that is an eligible taxation year of the individual, hereinafter called the “taxation year to which the averaging applies”, to which an amount referred to in any of subparagraphs a to c of the first paragraph that the individual receives or pays in the particular taxation year relates, in whole or in part;

(b)  if the amount of the adjustment, in relation to the particular taxation year, determined in accordance with subparagraph a, is greater than or equal to zero, that amount is an amount that the individual is required to add to the individual’s tax otherwise payable under this Part for that particular year; and

(c)  if the amount of the adjustment, in relation to the particular taxation year, determined in accordance with subparagraph a, is less than zero, that amount expressed as a positive number is an amount that the individual may deduct from the individual’s tax otherwise payable under this Part for that particular year.

The amount of the tax adjustment relating to the averaging, determined in respect of the individual, that is attributable to a taxation year to which the averaging applies, for the purpose of determining the amount of the adjustment in relation to the particular taxation year, is equal to the positive or negative amount determined by the formula

(A - B) + C + D - (E - F).

In the formula in the third paragraph,

(a)  A is the total of the tax that would have been payable by the individual, for the taxation year to which the averaging applies, under this Part and, if the taxation year to which the averaging applies precedes the taxation year 1998, under Part I.1, as it read for that year, if the portion of each amount subject to an averaging mechanism, in relation to the individual for the particular taxation year or a preceding taxation year, that relates to the taxation year to which the averaging applies had been included or deducted in computing the individual’s taxable income for the taxation year to which the averaging applies;

(b)  B is the total of the tax payable by the individual, for the taxation year to which the averaging applies, under this Part and, if the taxation year to which the averaging applies precedes the taxation year 1998, under Part I.1, as it read for that year;

(c)  C is the aggregate of the amount by which the amount that a person, other than the individual, has deducted in computing the person’s tax otherwise payable under section 752.0.15 for the taxation year to which the averaging applies, as it read before being repealed, in respect of that taxation year, exceeds the amount that the person could have deducted in computing the person’s tax otherwise payable under section 752.0.15 for that year if the portion of each amount subject to an averaging mechanism, in relation to the individual for the particular taxation year or a preceding taxation year, that relates to the taxation year to which the averaging applies had been included or deducted in computing the individual’s taxable income for the taxation year to which the averaging applies, and the following amount:

i.  if the taxation year to which the averaging applies is subsequent to the taxation year 2002, but precedes the taxation year 2007, and, in the case of the taxation year 2003 or 2004, the rules set out in Book V.2.1, as it read for that year, did not apply to the individual’s eligible spouse for the year, within the meaning of sections 776.41.1 to 776.41.4, the amount by which the amount that the spouse has deducted in computing the spouse’s tax otherwise payable for that year under section 776.41.5, exceeds the amount that the spouse could have deducted in computing the spouse’s tax otherwise payable for that year under section 776.41.5, if the portion of each amount subject to an averaging mechanism, in relation to the individual for the particular taxation year or a preceding taxation year, that relates to the taxation year to which the averaging applies had been included or deducted in computing the individual’s taxable income for that year,

ii.  if the taxation year to which the averaging applies is the taxation year 2003 or 2004 and the rules set out in Book V.2.1, as it read for that year, did apply to the individual’s eligible spouse for the year, within the meaning of sections 776.41.1 to 776.41.4, the amount by which the amount that the spouse has deducted in computing the spouse’s tax otherwise payable for that year under section 776.78, as it read for that year, exceeds the amount that the spouse could have deducted in computing the spouse’s tax otherwise payable for that year under section 776.78, if the portion of each amount subject to an averaging mechanism, in relation to the individual for the particular taxation year or a preceding taxation year, that relates to the taxation year to which the averaging applies had been included or deducted in computing the individual’s taxable income for that year,

iii.  if the taxation year to which the averaging applies precedes the taxation year 2003 and the rules set out in Book V.2.1, as it read for that year, did apply to the individual’s spouse for the year, the amount by which the amount that the spouse has deducted in computing the spouse’s tax otherwise payable for that year under section 776.78, as it read for that year, exceeds the amount that the spouse could have deducted in computing the spouse’s tax otherwise payable for that year under section 776.78, if the portion of each amount subject to an averaging mechanism, in relation to the individual for the particular taxation year or a preceding taxation year, that relates to the taxation year to which the averaging applies had been included or deducted in computing the individual’s taxable income for that year,

iv.  if the taxation year to which the averaging applies precedes the taxation year 2003 and subparagraph iii does not apply, the amount by which the amount that the individual’s spouse has deducted in computing the spouse’s tax otherwise payable for that year under section 752.0.19, as it read for that year, exceeds the amount that the spouse could have deducted in computing the spouse’s tax otherwise payable for that year under section 752.0.19, if the portion of each amount subject to an averaging mechanism, in relation to the individual for the particular taxation year or a preceding taxation year, that relates to the taxation year to which the averaging applies had been included or deducted in computing the individual’s taxable income for that year; and

v.  if the taxation year to which the averaging applies is subsequent to the taxation year 2006, the aggregate of

(1)  the amount by which the amount that the individual’s eligible spouse for the year, within the meaning of sections 776.41.1 to 776.41.4, has deducted in computing the spouse’s tax otherwise payable for that year under section 776.41.5, exceeds the amount that the spouse could have deducted in computing the spouse’s tax otherwise payable for that year under section 776.41.5, if the portion of each amount subject to an averaging mechanism, in relation to the individual for the particular taxation year or a preceding taxation year, that relates to the taxation year to which the averaging applies had been included or deducted in computing the individual’s taxable income for that year,

(2)  the amount by which the amount that a person, other than the individual, has deducted in computing the person’s tax otherwise payable under section 776.41.14 for the taxation year to which the averaging applies, exceeds the amount that the person could have deducted in computing the person’s tax otherwise payable for that year under section 776.41.14, if the portion of each amount subject to an averaging mechanism, in relation to the individual for the particular taxation year or a preceding taxation year, that relates to the taxation year to which the averaging applies had been included or deducted in computing the individual’s taxable income for that year, and

(3)  the amount by which the amount that a person, other than the individual, has deducted in computing the person’s tax otherwise payable under section 776.41.21 for the taxation year to which the averaging applies, exceeds the amount that the person could have deducted in computing the person’s tax otherwise payable for that year under section 776.41.21, if the portion of each amount subject to an averaging mechanism, in relation to the individual for the particular taxation year or a preceding taxation year, that relates to the taxation year to which the averaging applies had been included or deducted in computing the individual’s taxable income for that year;

(d)  D is the amount by which the amount that would be determined under subparagraph a for the taxation year to which the averaging applies, if the portion of each amount subject to an averaging mechanism, to which subparagraph a refers, that relates to the taxation year to which the averaging applies was determined without taking into account the portion of the amounts referred to in the first paragraph of section 1029.8.50 that relates to the taxation year to which the averaging applies in respect of which the individual is deemed to have paid an amount to the Minister under section 1029.8.50 for the particular taxation year, exceeds the amount determined under subparagraph a for the taxation year to which the averaging applies;

(e)  E is the aggregate of all amounts each of which is the amount of the tax adjustment relating to the averaging, determined in respect of the individual, that may reasonably be attributed to the taxation year to which the averaging applies and that is determined for a taxation year preceding the particular taxation year; and

(f)  F is the aggregate of all amounts each of which is an amount determined under subparagraph d, in respect of the taxation year to which the averaging applies, for a taxation year preceding the particular taxation year.

For the purpose of determining any amount under the third and fourth paragraphs, the following rules apply:

(a)  the proportion referred to in the second paragraph of section 22 for any taxation year to which the averaging applies is deemed to be equal to 1;

(b)  if the individual was resident in Canada but outside Québec on the last day of a taxation year to which the averaging applies, the individual is deemed to have been resident in Québec on the last day of that year; and

(c)  if the amount referred to in subparagraph c of the first paragraph includes the amount determined under the fourth paragraph of section 725.1.2, the latter amount is deemed to relate, in the same proportion, to each of the taxation years subsequent to the taxation year 1985 that precede the particular taxation year.

For the purpose of applying this Part to any taxation year,

(a)  an amount that is not otherwise deducted in computing an individual’s taxable income or tax payable under this Part for a taxation year to which the averaging applies, but that is deducted for the purpose of establishing the amount determined in respect of the individual under any of subparagraphs a, c and d of the fourth paragraph for that taxation year, is deemed, for the application of this Part to any taxation year, to have been deducted in computing the individual’s taxable income or tax payable under this Part for the taxation year to which the averaging applies, including when establishing the amount determined in respect of the individual for another taxation year under any of subparagraphs a, c and d of the fourth paragraph or under subparagraph a or d of the second paragraph of section 766.3.2 or subparagraph b of the third paragraph of that section;

(b)  an amount that is otherwise deducted in computing an individual’s taxable income or tax payable under this Part for a taxation year that is subsequent to the taxation year to which the averaging applies may not be taken into account for the purpose of establishing the amount determined in respect of the individual under any of subparagraphs a, c and d of the fourth paragraph for the taxation year to which the averaging applies; and

(c)  an amount that, under subparagraph a of the sixth paragraph of section 766.3.2, is deemed deducted in computing an individual’s taxable income or tax payable under this Part for a taxation year to which the averaging applies, because it is deducted in that computation for the purpose of establishing the amount determined in respect of the individual under subparagraph a or d of the second paragraph of section 766.3.2 or subparagraph b of the third paragraph of that section for the taxation year to which the averaging applies, may not be taken into account for the purpose of establishing the amount determined in respect of the individual under any of subparagraphs a, c and d of the fourth paragraph for that taxation year.

For the purposes of the fourth paragraph, “amount subject to an averaging mechanism”, in relation to an individual for a taxation year, means an amount that is received or paid by the individual in the year and that is referred to in any of subparagraphs a to c of the first paragraph or an amount paid by the individual in the year and in respect of which the first paragraph of section 1029.8.50 applies, except, in respect of a taxation year to which the averaging applies and that ends before 1 January 2003, such an amount received or paid in a taxation year that ends before 1 January 2004.

1993, c. 16, s. 286; 1995, c. 1, s. 84; 1997, c. 14, s. 125; 1997, c. 85, s. 146; 2002, c. 40, s. 74; 2005, c. 38, s. 162; 2009, c. 5, s. 300; 2009, c. 15, s. 147; 2011, c. 6, s. 160; 2015, c. 21, s. 305.

2011-06-06

766.2. An individual’s tax otherwise payable for a particular taxation year is to be adjusted in accordance with the second paragraph if

(a)  the individual is not required to include, by reason of the second paragraph of section 312.5, an amount in computing the individual’s income for the particular taxation year;

(a.1)  the individual is not required to include, by reason of the second paragraph of section 694.0.0.1, an amount in computing taxable income for the particular taxation year;

(b)  the individual is required to include, by reason of section 694.0.1, an amount in computing the individual’s taxable income for the particular taxation year; or

(c)  the individual deducts, by reason of section 725.1.2, an amount in computing the individual’s taxable income, or the individual’s taxable income earned in Canada as determined under Part II, for the particular taxation year.

The adjustment to which the first paragraph refers is made in the following manner:

(a)  the amount of the adjustment, in relation to the particular taxation year, is equal to the aggregate of all amounts each of which is the amount of the tax adjustment relating to the averaging, determined in respect of the individual, that is attributable to a preceding taxation year that is an eligible taxation year of the individual, hereinafter called the “taxation year to which the averaging applies”, to which an amount referred to in any of subparagraphs a to c of the first paragraph that the individual receives or pays in the particular taxation year relates, in whole or in part;

(b)  if the amount of the adjustment, in relation to the particular taxation year, determined in accordance with subparagraph a, is greater than or equal to zero, that amount is an amount that the individual is required to add to the individual’s tax otherwise payable under this Part for that particular year; and

(c)  if the amount of the adjustment, in relation to the particular taxation year, determined in accordance with subparagraph a, is less than zero, that amount expressed as a positive number is an amount that the individual may deduct from the individual’s tax otherwise payable under this Part for that particular year.

The amount of the tax adjustment relating to the averaging, determined in respect of the individual, that is attributable to a taxation year to which the averaging applies, for the purpose of determining the amount of the adjustment in relation to the particular taxation year, is equal to the positive or negative amount determined by the formula

(A - B) + C + D - (E - F).

In the formula in the third paragraph,

(a)  A is the total of the tax that would have been payable by the individual, for the taxation year to which the averaging applies, under this Part and, if the taxation year to which the averaging applies precedes the taxation year 1998, under Part I.1, as it read for that year, if the portion of each amount subject to an averaging mechanism, in relation to the individual for the particular taxation year or a preceding taxation year, that relates to the taxation year to which the averaging applies had been included or deducted in computing the individual’s taxable income for the taxation year to which the averaging applies;

(b)  B is the total of the tax payable by the individual, for the taxation year to which the averaging applies, under this Part and, if the taxation year to which the averaging applies precedes the taxation year 1998, under Part I.1, as it read for that year;

(c)  C is the aggregate of the amount by which the amount that a person, other than the individual, has deducted in computing the person’s tax otherwise payable under section 752.0.15 for the taxation year to which the averaging applies, as it read before being repealed, in respect of that taxation year, exceeds the amount that the person could have deducted in computing the person’s tax otherwise payable under section 752.0.15 for that year if the portion of each amount subject to an averaging mechanism, in relation to the individual for the particular taxation year or a preceding taxation year, that relates to the taxation year to which the averaging applies had been included or deducted in computing the individual’s taxable income for the taxation year to which the averaging applies, and the following amount:

i.  if the taxation year to which the averaging applies is subsequent to the taxation year 2002, but precedes the taxation year 2007, and, in the case of the taxation year 2003 or 2004, the rules set out in Book V.2.1, as it read for that year, did not apply to the individual’s eligible spouse for the year, within the meaning of sections 776.41.1 to 776.41.4, the amount by which the amount that the spouse has deducted in computing the spouse’s tax otherwise payable for that year under section 776.41.5, exceeds the amount that the spouse could have deducted in computing the spouse’s tax otherwise payable for that year under section 776.41.5, if the portion of each amount subject to an averaging mechanism, in relation to the individual for the particular taxation year or a preceding taxation year, that relates to the taxation year to which the averaging applies had been included or deducted in computing the individual’s taxable income for that year,

ii.  if the taxation year to which the averaging applies is the taxation year 2003 or 2004 and the rules set out in Book V.2.1, as it read for that year, did apply to the individual’s eligible spouse for the year, within the meaning of sections 776.41.1 to 776.41.4, the amount by which the amount that the spouse has deducted in computing the spouse’s tax otherwise payable for that year under section 776.78, as it read for that year, exceeds the amount that the spouse could have deducted in computing the spouse’s tax otherwise payable for that year under section 776.78, if the portion of each amount subject to an averaging mechanism, in relation to the individual for the particular taxation year or a preceding taxation year, that relates to the taxation year to which the averaging applies had been included or deducted in computing the individual’s taxable income for that year,

iii.  if the taxation year to which the averaging applies precedes the taxation year 2003 and the rules set out in Book V.2.1, as it read for that year, did apply to the individual’s spouse for the year, the amount by which the amount that the spouse has deducted in computing the spouse’s tax otherwise payable for that year under section 776.78, as it read for that year, exceeds the amount that the spouse could have deducted in computing the spouse’s tax otherwise payable for that year under section 776.78, if the portion of each amount subject to an averaging mechanism, in relation to the individual for the particular taxation year or a preceding taxation year, that relates to the taxation year to which the averaging applies had been included or deducted in computing the individual’s taxable income for that year,

iv.  if the taxation year to which the averaging applies precedes the taxation year 2003 and subparagraph iii does not apply, the amount by which the amount that the individual’s spouse has deducted in computing the spouse’s tax otherwise payable for that year under section 752.0.19, as it read for that year, exceeds the amount that the spouse could have deducted in computing the spouse’s tax otherwise payable for that year under section 752.0.19, if the portion of each amount subject to an averaging mechanism, in relation to the individual for the particular taxation year or a preceding taxation year, that relates to the taxation year to which the averaging applies had been included or deducted in computing the individual’s taxable income for that year; and

v.  if the taxation year to which the averaging applies is subsequent to the taxation year 2006, the aggregate of

(1)  the amount by which the amount that the individual’s eligible spouse for the year, within the meaning of sections 776.41.1 to 776.41.4, has deducted in computing the spouse’s tax otherwise payable for that year under section 776.41.5, exceeds the amount that the spouse could have deducted in computing the spouse’s tax otherwise payable for that year under section 776.41.5, if the portion of each amount subject to an averaging mechanism, in relation to the individual for the particular taxation year or a preceding taxation year, that relates to the taxation year to which the averaging applies had been included or deducted in computing the individual’s taxable income for that year,

(2)  the amount by which the amount that a person, other than the individual, has deducted in computing the person’s tax otherwise payable under section 776.41.14 for the taxation year to which the averaging applies, exceeds the amount that the person could have deducted in computing the person’s tax otherwise payable for that year under section 776.41.14, if the portion of each amount subject to an averaging mechanism, in relation to the individual for the particular taxation year or a preceding taxation year, that relates to the taxation year to which the averaging applies had been included or deducted in computing the individual’s taxable income for that year, and

(3)  the amount by which the amount that a person, other than the individual, has deducted in computing the person’s tax otherwise payable under section 776.41.21 for the taxation year to which the averaging applies, exceeds the amount that the person could have deducted in computing the person’s tax otherwise payable for that year under section 776.41.21, if the portion of each amount subject to an averaging mechanism, in relation to the individual for the particular taxation year or a preceding taxation year, that relates to the taxation year to which the averaging applies had been included or deducted in computing the individual’s taxable income for that year;

(d)  D is the amount by which the amount that would be determined under subparagraph a for the taxation year to which the averaging applies, if the portion of each amount subject to an averaging mechanism, to which subparagraph a refers, that relates to the taxation year to which the averaging applies was determined without taking into account the portion of the amounts referred to in the first paragraph of section 1029.8.50 that relates to the taxation year to which the averaging applies in respect of which the individual is deemed to have paid an amount to the Minister under section 1029.8.50 for the particular taxation year, exceeds the amount determined under subparagraph a for the taxation year to which the averaging applies;

(e)  E is the aggregate of all amounts each of which is the amount of the tax adjustment relating to the averaging, determined in respect of the individual, that may reasonably be attributed to the taxation year to which the averaging applies and that is determined for a taxation year preceding the particular taxation year; and

(f)  F is the aggregate of all amounts each of which is an amount determined under subparagraph d, in respect of the taxation year to which the averaging applies, for a taxation year preceding the particular taxation year.

For the purpose of determining any amount under the third and fourth paragraphs, the following rules apply:

(a)  the proportion referred to in the second paragraph of section 22 for any taxation year to which the averaging applies is deemed to be equal to 1;

(b)  if the individual was resident in Canada but outside Québec on the last day of a taxation year to which the averaging applies, the individual is deemed to have been resident in Québec on the last day of that year; and

(c)  if the amount referred to in subparagraph c of the first paragraph includes the amount determined under the fourth paragraph of section 725.1.2, the latter amount is deemed to relate, in the same proportion, to each of the taxation years subsequent to the taxation year 1985 that precede the particular taxation year.

For the purpose of applying this Part to any taxation year,

(a)  an amount that is not otherwise deducted in computing an individual’s taxable income or tax payable under this Part for a taxation year to which the averaging applies, but that is deducted for the purpose of establishing the amount determined in respect of the individual under any of subparagraphs a, c and d of the fourth paragraph for that taxation year, is deemed, for the application of this Part to any taxation year, to have been deducted in computing the individual’s taxable income or tax payable under this Part for the taxation year to which the averaging applies, including when establishing the amount determined in respect of the individual for another taxation year under any of subparagraphs a, c and d of the fourth paragraph or any of subparagraphs a, d and h of the second paragraph of section 766.17;

(b)  an amount that is otherwise deducted in computing an individual’s taxable income or tax payable under this Part for a taxation year that is subsequent to the taxation year to which the averaging applies may not be taken into account for the purpose of establishing the amount determined in respect of the individual under any of subparagraphs a, c and d of the fourth paragraph for the taxation year to which the averaging applies; and

(c)  an amount that, under subparagraph a of the fifth paragraph of section 766.17, is deemed deducted in computing an individual’s taxable income or tax payable under this Part for a taxation year to which the averaging applies, because it is deducted in that computation for the purpose of establishing the amount determined in respect of the individual under any of subparagraphs a, d and h of the second paragraph of section 766.17 for the taxation year to which the averaging applies, may not be taken into account for the purpose of establishing the amount determined in respect of the individual under any of subparagraphs a, c and d of the fourth paragraph for that taxation year.

For the purposes of the fourth paragraph, “amount subject to an averaging mechanism”, in relation to an individual for a taxation year, means an amount that is received or paid by the individual in the year and that is referred to in any of subparagraphs a to c of the first paragraph or an amount paid by the individual in the year and in respect of which the first paragraph of section 1029.8.50 applies, except, in respect of a taxation year to which the averaging applies and that ends before 1 January 2003, such an amount received or paid in a taxation year that ends before 1 January 2004.

1993, c. 16, s. 286; 1995, c. 1, s. 84; 1997, c. 14, s. 125; 1997, c. 85, s. 146; 2002, c. 40, s. 74; 2005, c. 38, s. 162; 2009, c. 5, s. 300; 2009, c. 15, s. 147; 2011, c. 6, s. 160.

2009-06-04

766.2. An individual’s tax otherwise payable for a particular taxation year is to be adjusted in accordance with the second paragraph if

(a)  the individual is not required to include, by reason of the second paragraph of section 312.5, an amount in computing the individual’s income for the particular taxation year;

(a.1)  the individual is not required to include, by reason of the second paragraph of section 694.0.0.1, an amount in computing taxable income for the particular taxation year;

(b)  the individual is required to include, by reason of section 694.0.1, an amount in computing the individual’s taxable income for the particular taxation year; or

(c)  the individual deducts, by reason of section 725.1.2, an amount in computing the individual’s taxable income, or the individual’s taxable income earned in Canada as determined under Part II, for the particular taxation year.

The adjustment to which the first paragraph refers is made in the following manner:

(a)  the amount of the adjustment, in relation to the particular taxation year, is equal to the aggregate of all amounts each of which is the amount of the tax adjustment relating to the averaging, determined in respect of the individual, that is attributable to a preceding taxation year that is an eligible taxation year of the individual, hereinafter called the “taxation year to which the averaging applies”, to which an amount referred to in any of subparagraphs a to c of the first paragraph that the individual receives or pays in the particular taxation year relates, in whole or in part;

(b)  if the amount of the adjustment, in relation to the particular taxation year, determined in accordance with subparagraph a, is greater than or equal to zero, that amount is an amount that the individual is required to add to the individual’s tax otherwise payable under this Part for that particular year; and

(c)  if the amount of the adjustment, in relation to the particular taxation year, determined in accordance with subparagraph a, is less than zero, that amount expressed as a positive number is an amount that the individual may deduct from the individual’s tax otherwise payable under this Part for that particular year.

The amount of the tax adjustment relating to the averaging, determined in respect of the individual, that is attributable to a taxation year to which the averaging applies, for the purpose of determining the amount of the adjustment in relation to the particular taxation year, is equal to the positive or negative amount determined by the formula

(A - B) + C + D - (E - F).

In the formula in the third paragraph,

(a)  A is the total of the tax that would have been payable by the individual, for the taxation year to which the averaging applies, under this Part and, if the taxation year to which the averaging applies precedes the taxation year 1998, under Part I.1, as it read for that year, if the portion of each amount subject to an averaging mechanism, in relation to the individual for the particular taxation year or a preceding taxation year, that relates to the taxation year to which the averaging applies had been included or deducted in computing the individual’s taxable income for the taxation year to which the averaging applies;

(b)  B is the total of the tax payable by the individual, for the taxation year to which the averaging applies, under this Part and, if the taxation year to which the averaging applies precedes the taxation year 1998, under Part I.1, as it read for that year;

(c)  C is the aggregate of the amount by which the amount that a person, other than the individual, has deducted in computing the person’s tax otherwise payable under section 752.0.15 for the taxation year to which the averaging applies, as it read before being repealed, in respect of that taxation year, exceeds the amount that the person could have deducted in computing the person’s tax otherwise payable under section 752.0.15 for that year if the portion of each amount subject to an averaging mechanism, in relation to the individual for the particular taxation year or a preceding taxation year, that relates to the taxation year to which the averaging applies had been included or deducted in computing the individual’s taxable income for the taxation year to which the averaging applies, and the following amount:

i.  if the taxation year to which the averaging applies is subsequent to the taxation year 2002, but precedes the taxation year 2007, and, in the case of the taxation year 2003 or 2004, the rules set out in Book V.2.1, as it read for that year, did not apply to the individual’s eligible spouse for the year, within the meaning of sections 776.41.1 to 776.41.4, the amount by which the amount that the spouse has deducted in computing the spouse’s tax otherwise payable for that year under section 776.41.5, exceeds the amount that the spouse could have deducted in computing the spouse’s tax otherwise payable for that year under section 776.41.5, if the portion of each amount subject to an averaging mechanism, in relation to the individual for the particular taxation year or a preceding taxation year, that relates to the taxation year to which the averaging applies had been included or deducted in computing the individual’s taxable income for that year,

ii.  if the taxation year to which the averaging applies is the taxation year 2003 or 2004 and the rules set out in Book V.2.1, as it read for that year, did apply to the individual’s eligible spouse for the year, within the meaning of sections 776.41.1 to 776.41.4, the amount by which the amount that the spouse has deducted in computing the spouse’s tax otherwise payable for that year under section 776.78, as it read for that year, exceeds the amount that the spouse could have deducted in computing the spouse’s tax otherwise payable for that year under section 776.78, if the portion of each amount subject to an averaging mechanism, in relation to the individual for the particular taxation year or a preceding taxation year, that relates to the taxation year to which the averaging applies had been included or deducted in computing the individual’s taxable income for that year,

iii.  if the taxation year to which the averaging applies precedes the taxation year 2003 and the rules set out in Book V.2.1, as it read for that year, did apply to the individual’s spouse for the year, the amount by which the amount that the spouse has deducted in computing the spouse’s tax otherwise payable for that year under section 776.78, as it read for that year, exceeds the amount that the spouse could have deducted in computing the spouse’s tax otherwise payable for that year under section 776.78, if the portion of each amount subject to an averaging mechanism, in relation to the individual for the particular taxation year or a preceding taxation year, that relates to the taxation year to which the averaging applies had been included or deducted in computing the individual’s taxable income for that year,

iv.  if the taxation year to which the averaging applies precedes the taxation year 2003 and subparagraph iii does not apply, the amount by which the amount that the individual’s spouse has deducted in computing the spouse’s tax otherwise payable for that year under section 752.0.19, as it read for that year, exceeds the amount that the spouse could have deducted in computing the spouse’s tax otherwise payable for that year under section 752.0.19, if the portion of each amount subject to an averaging mechanism, in relation to the individual for the particular taxation year or a preceding taxation year, that relates to the taxation year to which the averaging applies had been included or deducted in computing the individual’s taxable income for that year; and

v.  if the taxation year to which the averaging applies is subsequent to the taxation year 2006, the aggregate of

(1)  the amount by which the amount that the individual’s eligible spouse for the year, within the meaning of sections 776.41.1 to 776.41.4, has deducted in computing the spouse’s tax otherwise payable for that year under section 776.41.5, exceeds the amount that the spouse could have deducted in computing the spouse’s tax otherwise payable for that year under section 776.41.5, if the portion of each amount subject to an averaging mechanism, in relation to the individual for the particular taxation year or a preceding taxation year, that relates to the taxation year to which the averaging applies had been included or deducted in computing the individual’s taxable income for that year,

(2)  the amount by which the amount that a person, other than the individual, has deducted in computing the person’s tax otherwise payable under section 776.41.14 for the taxation year to which the averaging applies, exceeds the amount that the person could have deducted in computing the person’s tax otherwise payable for that year under section 776.41.14, if the portion of each amount subject to an averaging mechanism, in relation to the individual for the particular taxation year or a preceding taxation year, that relates to the taxation year to which the averaging applies had been included or deducted in computing the individual’s taxable income for that year, and

(3)  the amount by which the amount that a person, other than the individual, has deducted in computing the person’s tax otherwise payable under section 776.41.21 for the taxation year to which the averaging applies, exceeds the amount that the person could have deducted in computing the person’s tax otherwise payable for that year under section 776.41.21, if the portion of each amount subject to an averaging mechanism, in relation to the individual for the particular taxation year or a preceding taxation year, that relates to the taxation year to which the averaging applies had been included or deducted in computing the individual’s taxable income for that year;

(d)  D is the amount by which the amount that would be determined under subparagraph a for the taxation year to which the averaging applies, if the portion of each amount subject to an averaging mechanism, to which subparagraph a refers, that relates to the taxation year to which the averaging applies was determined without taking into account the portion of the amounts referred to in the first paragraph of section 1029.8.50 that relates to the taxation year to which the averaging applies in respect of which the individual is deemed to have paid an amount to the Minister under section 1029.8.50 for the particular taxation year, exceeds the amount determined under subparagraph a for the taxation year to which the averaging applies;

(e)  E is the aggregate of all amounts each of which is the amount of the tax adjustment relating to the averaging, determined in respect of the individual, that may reasonably be attributed to the taxation year to which the averaging applies and that is determined for a taxation year preceding the particular taxation year; and

(f)  F is the aggregate of all amounts each of which is an amount determined under subparagraph d, in respect of the taxation year to which the averaging applies, for a taxation year preceding the particular taxation year.

For the purpose of determining any amount under the third and fourth paragraphs, the following rules apply:

(a)  the proportion referred to in the second paragraph of section 22 for any taxation year to which the averaging applies is deemed to be equal to 1;

(b)  if the individual was resident in Canada but outside Québec on the last day of a taxation year to which the averaging applies, the individual is deemed to have been resident in Québec on the last day of that year; and

(c)  if the amount referred to in subparagraph c of the first paragraph includes the amount determined under the fourth paragraph of section 725.1.2, the latter amount is deemed to relate, in the same proportion, to each of the taxation years subsequent to the taxation year 1985 that precede the particular taxation year.

For the purpose of applying this Part to any taxation year,

(a)  an amount that is not otherwise deducted in computing an individual’s taxable income or tax payable under this Part for a taxation year to which the averaging applies, but that is deducted for the purpose of establishing the amount determined in respect of the individual under any of subparagraphs a, c and d of the fourth paragraph for that taxation year, is deemed, for the application of this Part to any taxation year, to have been deducted in computing the individual’s taxable income or tax payable under this Part for the taxation year to which the averaging applies, including when establishing the amount determined in respect of the individual under any of subparagraphs a, c and d of the fourth paragraph for another taxation year; and

(b)  an amount that is otherwise deducted in computing an individual’s taxable income or tax payable under this Part for a taxation year that is subsequent to the taxation year to which the averaging applies may not be taken into account for the purpose of establishing the amount determined in respect of the individual under any of subparagraphs a, c and d of the fourth paragraph for the taxation year to which the averaging applies.

For the purposes of the fourth paragraph, “amount subject to an averaging mechanism”, in relation to an individual for a taxation year, means an amount that is received or paid by the individual in the year and that is referred to in any of subparagraphs a to c of the first paragraph or an amount paid by the individual in the year and in respect of which the first paragraph of section 1029.8.50 applies, except, in respect of a taxation year to which the averaging applies and that ends before 1 January 2003, such an amount received or paid in a taxation year that ends before 1 January 2004.

1993, c. 16, s. 286; 1995, c. 1, s. 84; 1997, c. 14, s. 125; 1997, c. 85, s. 146; 2002, c. 40, s. 74; 2005, c. 38, s. 162; 2009, c. 5, s. 300; 2009, c. 15, s. 147.

2009-05-15

766.2. An individual’s tax otherwise payable for a particular taxation year is to be adjusted in accordance with the second paragraph if

(a)  the individual is not required to include, by reason of the second paragraph of section 312.5, an amount in computing the individual’s income for the particular taxation year;

(a.1)  the individual is not required to include, by reason of the second paragraph of section 694.0.0.1, an amount in computing taxable income for the particular taxation year;

(b)  the individual is required to include, by reason of section 694.0.1, an amount in computing the individual’s taxable income for the particular taxation year; or

(c)  the individual deducts, by reason of section 725.1.2, an amount in computing the individual’s taxable income, or the individual’s taxable income earned in Canada as determined under Part II, for the particular taxation year.

The adjustment to which the first paragraph refers is made in the following manner:

(a)  the amount of the adjustment, in relation to the particular taxation year, is equal to the aggregate of all amounts each of which is the amount of the tax adjustment relating to the averaging, determined in respect of the individual, that is attributable to a preceding taxation year that is an eligible taxation year of the individual, hereinafter called the “taxation year to which the averaging applies”, to which an amount referred to in any of subparagraphs a to c of the first paragraph that the individual receives or pays in the particular taxation year relates, in whole or in part;

(b)  if the amount of the adjustment, in relation to the particular taxation year, determined in accordance with subparagraph a, is greater than or equal to zero, that amount is an amount that the individual is required to add to the individual’s tax otherwise payable under this Part for that particular year; and

(c)  if the amount of the adjustment, in relation to the particular taxation year, determined in accordance with subparagraph a, is less than zero, that amount expressed as a positive number is an amount that the individual may deduct from the individual’s tax otherwise payable under this Part for that particular year.

The amount of the tax adjustment relating to the averaging, determined in respect of the individual, that is attributable to a taxation year to which the averaging applies, for the purpose of determining the amount of the adjustment in relation to the particular taxation year, is equal to the amount determined by the formula

(A - B) + C + D - (E - F).

In the formula in the third paragraph,

(a)  A is the total of the tax that would have been payable by the individual, for the taxation year to which the averaging applies, under this Part and, if the taxation year to which the averaging applies precedes the taxation year 1998, under Part I.1, as it read for that year, if the portion of each amount subject to an averaging mechanism, in relation to the individual for the particular taxation year or a preceding taxation year, that relates to the taxation year to which the averaging applies had been included or deducted in computing the individual’s taxable income for the taxation year to which the averaging applies;

(b)  B is the total of the tax payable by the individual, for the taxation year to which the averaging applies, under this Part and, if the taxation year to which the averaging applies precedes the taxation year 1998, under Part I.1, as it read for that year;

(c)  C is the aggregate of the amount by which the amount that a person, other than the individual, has deducted in computing the person’s tax otherwise payable under section 752.0.15 for the taxation year to which the averaging applies, as it read before being repealed, in respect of that taxation year, exceeds the amount that the person could have deducted in computing the person’s tax otherwise payable under section 752.0.15 for that year if the portion of each amount subject to an averaging mechanism, in relation to the individual for the particular taxation year or a preceding taxation year, that relates to the taxation year to which the averaging applies had been included or deducted in computing the individual’s taxable income for the taxation year to which the averaging applies, and the following amount:

i.  if the taxation year to which the averaging applies is subsequent to the taxation year 2002 and, in the case of the taxation year 2003 or 2004, the rules set out in Book V.2.1, as it read for that year, did not apply to the individual’s eligible spouse for the year, within the meaning of sections 776.41.1 to 776.41.4, the amount by which the amount that the spouse has deducted in computing the spouse’s tax otherwise payable for that year under section 776.41.5, exceeds the amount that the spouse could have deducted in computing the spouse’s tax otherwise payable for that year under section 776.41.5, if the portion of each amount subject to an averaging mechanism, in relation to the individual for the particular taxation year or a preceding taxation year, that relates to the taxation year to which the averaging applies had been included or deducted in computing the individual’s taxable income for that year,

ii.  if the taxation year to which the averaging applies is the taxation year 2003 or 2004 and the rules set out in Book V.2.1, as it read for that year, did apply to the individual’s eligible spouse for the year, within the meaning of sections 776.41.1 to 776.41.4, the amount by which the amount that the spouse has deducted in computing the spouse’s tax otherwise payable for that year under section 776.78, as it read for that year, exceeds the amount that the spouse could have deducted in computing the spouse’s tax otherwise payable for that year under section 776.78, if the portion of each amount subject to an averaging mechanism, in relation to the individual for the particular taxation year or a preceding taxation year, that relates to the taxation year to which the averaging applies had been included or deducted in computing the individual’s taxable income for that year,

iii.  if the taxation year to which the averaging applies precedes the taxation year 2003 and the rules set out in Book V.2.1, as it read for that year, did apply to the individual’s spouse for the year, the amount by which the amount that the spouse has deducted in computing the spouse’s tax otherwise payable for that year under section 776.78, as it read for that year, exceeds the amount that the spouse could have deducted in computing the spouse’s tax otherwise payable for that year under section 776.78, if the portion of each amount subject to an averaging mechanism, in relation to the individual for the particular taxation year or a preceding taxation year, that relates to the taxation year to which the averaging applies had been included or deducted in computing the individual’s taxable income for that year, and

iv.  if the taxation year to which the averaging applies precedes the taxation year 2003 and subparagraph iii does not apply, the amount by which the amount that the individual’s spouse has deducted in computing the spouse’s tax otherwise payable for that year under section 752.0.19, as it read for that year, exceeds the amount that the spouse could have deducted in computing the spouse’s tax otherwise payable for that year under section 752.0.19, if the portion of each amount subject to an averaging mechanism, in relation to the individual for the particular taxation year or a preceding taxation year, that relates to the taxation year to which the averaging applies had been included or deducted in computing the individual’s taxable income for that year;

(d)  D is the amount by which the amount that would be determined under subparagraph a for the taxation year to which the averaging applies, if the portion of each amount subject to an averaging mechanism, to which subparagraph a refers, that relates to the taxation year to which the averaging applies was determined without taking into account the portion of the amounts referred to in the first paragraph of section 1029.8.50 that relates to the taxation year to which the averaging applies in respect of which the individual is deemed to have paid an amount to the Minister under section 1029.8.50 for the particular taxation year, exceeds the amount determined under subparagraph a for the taxation year to which the averaging applies;

(e)  E is the aggregate of all amounts each of which is the amount of the tax adjustment relating to the averaging, determined in respect of the individual, that may reasonably be attributed to the taxation year to which the averaging applies and that is determined for a taxation year preceding the particular taxation year; and

(f)  F is the aggregate of all amounts each of which is an amount determined under subparagraph d, in respect of the taxation year to which the averaging applies, for a taxation year preceding the particular taxation year.

For the purpose of determining any amount under the third and fourth paragraphs, the following rules apply:

(a)  the proportion referred to in the second paragraph of section 22 for any taxation year to which the averaging applies is deemed to be equal to 1;

(b)  if the individual was resident in Canada but outside Québec on the last day of a taxation year to which the averaging applies, the individual is deemed to have been resident in Québec on the last day of that year; and

(c)  if the amount referred to in subparagraph c of the first paragraph includes the amount determined under the fourth paragraph of section 725.1.2, the latter amount is deemed to relate, in the same proportion, to each of the taxation years subsequent to the taxation year 1985 that precede the particular taxation year.

An amount that is not otherwise deducted in computing an individual’s taxable income or tax payable under this Part for a taxation year to which the averaging applies, but that is deducted for the purpose of establishing the amount determined in respect of the individual under any of subparagraphs a, c and d of the fourth paragraph for that taxation year, is deemed, for the application of this Part to any subsequent taxation year, to have been deducted in computing the individual’s taxable income or tax payable under this Part for the taxation year to which the averaging applies.

For the purposes of the fourth paragraph, “amount subject to an averaging mechanism”, in relation to an individual for a taxation year, means an amount that is received or paid by the individual in the year and that is referred to in any of subparagraphs a to c of the first paragraph or an amount paid by the individual in the year and in respect of which the first paragraph of section 1029.8.50 applies, except, in respect of a taxation year to which the averaging applies and that ends before 1 January 2003, such an amount received or paid in a taxation year that ends before 1 January 2004.

1993, c. 16, s. 286; 1995, c. 1, s. 84; 1997, c. 14, s. 125; 1997, c. 85, s. 146; 2002, c. 40, s. 74; 2005, c. 38, s. 162; 2009, c. 5, s. 300.

2006-03-01

766.2. An individual’s tax otherwise payable for a particular taxation year is to be adjusted in accordance with the second paragraph if

(a)  the individual is not required to include, by reason of the second paragraph of section 312.5, an amount in computing the individual’s income for the particular taxation year;

(b)  the individual is required to include, by reason of section 694.0.1, an amount in computing the individual’s taxable income for the particular taxation year; or

(c)  the individual deducts, by reason of section 725.1.2, an amount in computing the individual’s taxable income, or the individual’s taxable income earned in Canada as determined under Part II, for the particular taxation year.

The adjustment to which the first paragraph refers is made in the following manner:

(a)  the amount of the adjustment, in relation to the particular taxation year, is equal to the aggregate of all amounts each of which is the amount of the tax adjustment relating to the averaging, determined in respect of the individual, that is attributable to a preceding taxation year that is an eligible taxation year of the individual, hereinafter called the “taxation year to which the averaging applies”, to which an amount referred to in any of subparagraphs a to c of the first paragraph that the individual receives or pays in the particular taxation year relates, in whole or in part;

(b)  if the amount of the adjustment, in relation to the particular taxation year, determined in accordance with subparagraph a, is greater than or equal to zero, that amount is an amount that the individual is required to add to the individual’s tax otherwise payable under this Part for that particular year; and

(c)  if the amount of the adjustment, in relation to the particular taxation year, determined in accordance with subparagraph a, is less than zero, that amount expressed as a positive number is an amount that the individual may deduct from the individual’s tax otherwise payable under this Part for that particular year.

The amount of the tax adjustment relating to the averaging, determined in respect of the individual, that is attributable to a taxation year to which the averaging applies, for the purpose of determining the amount of the adjustment in relation to the particular taxation year, is equal to the amount determined by the formula

(A − B) + C + D − (E − F).

In the formula in the third paragraph,

(a)  A is the total of the tax that would have been payable by the individual, for the taxation year to which the averaging applies, under this Part and, if the taxation year to which the averaging applies precedes the taxation year 1998, under Part I.1, as it read for that year, if the portion of each amount subject to an averaging mechanism, in relation to the individual for the particular taxation year or a preceding taxation year, that relates to the taxation year to which the averaging applies had been included or deducted in computing the individual’s taxable income for the taxation year to which the averaging applies;

(b)  B is the total of the tax payable by the individual, for the taxation year to which the averaging applies, under this Part and, if the taxation year to which the averaging applies precedes the taxation year 1998, under Part I.1, as it read for that year;

(c)  C is the aggregate of the amount by which the amount that a person, other than the individual, has deducted in computing the person’s tax otherwise payable under section 752.0.15 for the taxation year to which the averaging applies, as it read before being repealed, in respect of that taxation year, exceeds the amount that the person could have deducted in computing the person’s tax otherwise payable under section 752.0.15 for that year if the portion of each amount subject to an averaging mechanism, in relation to the individual for the particular taxation year or a preceding taxation year, that relates to the taxation year to which the averaging applies had been included or deducted in computing the individual’s taxable income for the taxation year to which the averaging applies, and the following amount:

i.  if the taxation year to which the averaging applies is subsequent to the taxation year 2002 and, in the case of the taxation year 2003 or 2004, the rules set out in Book V.2.1, as it read for that year, did not apply to the individual’s eligible spouse for the year, within the meaning of sections 776.41.1 to 776.41.4, the amount by which the amount that the spouse has deducted in computing the spouse’s tax otherwise payable for that year under section 776.41.5, exceeds the amount that the spouse could have deducted in computing the spouse’s tax otherwise payable for that year under section 776.41.5, if the portion of each amount subject to an averaging mechanism, in relation to the individual for the particular taxation year or a preceding taxation year, that relates to the taxation year to which the averaging applies had been included or deducted in computing the individual’s taxable income for that year,

ii.  if the taxation year to which the averaging applies is the taxation year 2003 or 2004 and the rules set out in Book V.2.1, as it read for that year, did apply to the individual’s eligible spouse for the year, within the meaning of sections 776.41.1 to 776.41.4, the amount by which the amount that the spouse has deducted in computing the spouse’s tax otherwise payable for that year under section 776.78, as it read for that year, exceeds the amount that the spouse could have deducted in computing the spouse’s tax otherwise payable for that year under section 776.78, if the portion of each amount subject to an averaging mechanism, in relation to the individual for the particular taxation year or a preceding taxation year, that relates to the taxation year to which the averaging applies had been included or deducted in computing the individual’s taxable income for that year,

iii.  if the taxation year to which the averaging applies precedes the taxation year 2003 and the rules set out in Book V.2.1, as it read for that year, did apply to the individual’s spouse for the year, the amount by which the amount that the spouse has deducted in computing the spouse’s tax otherwise payable for that year under section 776.78, as it read for that year, exceeds the amount that the spouse could have deducted in computing the spouse’s tax otherwise payable for that year under section 776.78, if the portion of each amount subject to an averaging mechanism, in relation to the individual for the particular taxation year or a preceding taxation year, that relates to the taxation year to which the averaging applies had been included or deducted in computing the individual’s taxable income for that year, and

iv.  if the taxation year to which the averaging applies precedes the taxation year 2003 and subparagraph iii does not apply, the amount by which the amount that the individual’s spouse has deducted in computing the spouse’s tax otherwise payable for that year under section 752.0.19, as it read for that year, exceeds the amount that the spouse could have deducted in computing the spouse’s tax otherwise payable for that year under section 752.0.19, if the portion of each amount subject to an averaging mechanism, in relation to the individual for the particular taxation year or a preceding taxation year, that relates to the taxation year to which the averaging applies had been included or deducted in computing the individual’s taxable income for that year;

(d)  D is the amount by which the amount that would be determined under subparagraph a for the taxation year to which the averaging applies, if the portion of each amount subject to an averaging mechanism, to which subparagraph a refers, that relates to the taxation year to which the averaging applies was determined without taking into account the portion of the amounts referred to in the first paragraph of section 1029.8.50 that relates to the taxation year to which the averaging applies in respect of which the individual is deemed to have paid an amount to the Minister under section 1029.8.50 for the particular taxation year, exceeds the amount determined under subparagraph a for the taxation year to which the averaging applies;

(e)  E is the aggregate of all amounts each of which is the amount of the tax adjustment relating to the averaging, determined in respect of the individual, that may reasonably be attributed to the taxation year to which the averaging applies and that is determined for a taxation year preceding the particular taxation year; and

(f)  F is the aggregate of all amounts each of which is an amount determined under subparagraph d, in respect of the taxation year to which the averaging applies, for a taxation year preceding the particular taxation year.

For the purpose of determining any amount under the third and fourth paragraphs, the following rules apply:

(a)  the proportion referred to in the second paragraph of section 22 for any taxation year to which the averaging applies is deemed to be equal to 1;

(b)  if the individual was resident in Canada but outside Québec on the last day of a taxation year to which the averaging applies, the individual is deemed to have been resident in Québec on the last day of that year; and

(c)  if the amount referred to in subparagraph c of the first paragraph includes the amount determined under the fourth paragraph of section 725.1.2, the latter amount is deemed to relate, in the same proportion, to each of the taxation years subsequent to the taxation year 1985 that precede the particular taxation year.

An amount that is not otherwise deducted in computing an individual’s taxable income or tax payable under this Part for a taxation year to which the averaging applies, but that is deducted for the purpose of establishing the amount determined in respect of the individual under any of subparagraphs a, c and d of the fourth paragraph for that taxation year, is deemed, for the application of this Part to any subsequent taxation year, to have been deducted in computing the individual’s taxable income or tax payable under this Part for the taxation year to which the averaging applies.

For the purposes of the fourth paragraph, “amount subject to an averaging mechanism”, in relation to an individual for a taxation year, means an amount that is received or paid by the individual in the year and that is referred to in any of subparagraphs a to c of the first paragraph or an amount paid by the individual in the year and in respect of which the first paragraph of section 1029.8.50 applies, except, in respect of a taxation year to which the averaging applies and that ends before 1 January 2003, such an amount received or paid in a taxation year that ends before 1 January 2004.

1993, c. 16, s. 286; 1995, c. 1, s. 84; 1997, c. 14, s. 125; 1997, c. 85, s. 146; 2002, c. 40, s. 74; 2005, c. 38, s. 162.