I-3 - Taxation Act

Section 796.9 Disposition versions

2021-06-02

796.9. Where an eligible unit in an eligible trust that was acquired by a participating farmer from the eligible trust is disposed of by the participating farmer (otherwise than under a disposition described in subparagraph a of the first paragraph of section 796.8, paragraph d of section 796.10 or paragraph b of section 796.11), the following rules apply:

(a)  the participating farmer’s proceeds from the disposition are deemed to be equal to the fair market value of the unit immediately before the disposition;

(b)  where the disposition results in a distribution of money denominated in Canadian dollars by the trust to the participating farmer in a taxation year of the trust, the money is proceeds from the disposition in that taxation year of other property of the trust and, at the time of the disposition, the participating farmer is not a person described in any of clauses A to C of subparagraph ii of paragraph b of subsection 4 of section 135.2 of the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)), the trust’s gain, if any, from the disposition of the other property is reduced to the extent that the proceeds of disposition so distributed would, in the absence of this paragraph, be included under section 663 in computing the participating farmer’s income for the taxation year of the participating farmer in which the taxation year of the trust ends; and

(c)  where the participating farmer is a Canadian-controlled private corporation, the gain from the disposition is, for the purposes of Title II of Book V, deemed to be income from an eligible business.

2021, c. 14, s. 101.