I-3 - Taxation Act

Section 785.5.2 Disposition versions

2015-12-04

785.5.2. Where a transferor transfers a depreciable property to a transferee in a qualifying exchange, the following rules apply:

(a)  the transferor is deemed to have disposed of the property at the depreciables disposition time, and not to have disposed of the property at the transfer time;

(b)  the transferee is deemed to have acquired the property at the depreciables acquisition time, and not to have acquired the property at the transfer time;

(c)  the transferor’s proceeds of disposition of the property and the transferee’s cost of the property are deemed to be equal to the amount described in the first paragraph of section 785.6; and

(d)  where the property’s capital cost to the transferor exceeds the transferor’s proceeds of disposition of the property determined in accordance with the first paragraph of section 785.6, for the purposes of sections 93 to 104, sections 130 and 130.1 and any regulations made under paragraph a of section 130 or section 130.1,

i.  the property’s capital cost to the transferee is deemed to be equal to the amount that was its capital cost to the transferor, and

ii.  the excess is deemed to have been allowed to the transferee in respect of the property as depreciation under paragraph a of section 130 in computing the transferee’s income for a taxation year that ended before the transfer time.

2015, c. 36, s. 63.