I-3 - Taxation Act

Section 791 Disposition versions

2006-03-01

791. A patronage dividend may be in the form of a certificate of indebtedness or a share issued by the taxpayer or by a corporation of which the taxpayer is a subsidiary wholly-owned corporation.

In such case, however, the taxpayer or that corporation must have disbursed in the year or within 12 months thereafter an amount of money equal to the aggregate of the principal amount of all certificates of indebtedness or shares issued in the course of purchasing or redeeming certificates of indebtedness or shares of the taxpayer or of that corporation previously issued.

A patronage dividend may also be in the form of a payment applied to a loan made by the taxpayer to a member or an amount applied to the obligation of the member to make a loan to the taxpayer, or on account of payment for shares issued to a member, either at the request of the member or pursuant to a statute or by-law of the taxpayer.

Every payment which under section 314 must be included in computing the income of a member constitutes a patronage dividend.

1972, c. 23, s. 599; 1997, c. 3, s. 71.