I-3 - Taxation Act

Section 851.22.29 Disposition versions

2006-03-01

851.22.29. A taxpayer that is a financial institution in its first taxation year that ends after 22 February 1994, may elect, by notifying the Minister in writing on or before the taxpayer’s filing-due date for the taxpayer’s taxation year that includes 23 May 2001 or, where that period has expired, within 90 days after the day on which a notice of assessment of tax payable under this Part for the year, notice that no tax is payable under this Part for the year or notice that an election made by the taxpayer under this section is deemed by section 851.22.30 or 851.22.31 not to have been made is sent to the taxpayer, that

(a)  each property of the taxpayer that is a property described in the second paragraph is deemed to have been disposed of by the taxpayer at the end of the taxpayer’s last taxation year that ended before 23 February 1994, in this section referred to as the “particular time”, for proceeds of disposition equal to, and to have been reacquired by the taxpayer immediately after the particular time at a cost equal to, the lesser of

i.  the fair market value of the property at the particular time, and

ii.  the greater of the adjusted cost base to the taxpayer of the property immediately before the particular time and the amount designated by the taxpayer in the election in respect of the property;

(b)  each property of the taxpayer that is a property described in the third paragraph is deemed to have been disposed of by the taxpayer at the particular time for proceeds of disposition equal to, and to have been reacquired by the taxpayer immediately after the particular time at a cost equal to, the greater of

i.  the fair market value of the property at the particular time, and

ii.  the lesser of the adjusted cost base to the taxpayer of the property immediately before the particular time and the amount designated by the taxpayer in the election in respect of the property.

A property to which subparagraph a of the first paragraph refers

(a)  was a capital property, other than a depreciable property, of the taxpayer at the particular time;

(b)  was a mark-to-market property for, or a specified debt obligation in, the taxpayer’s first taxation year that begins after the particular time;

(c)  had a fair market value at the particular time greater than its adjusted cost base to the taxpayer at that time; and

(d)  is designated by the taxpayer in the election.

A property to which subparagraph b of the first paragraph refers

(a)  was a capital property, other than a depreciable property, of the taxpayer at the particular time;

(b)  was not a mark-to-market property for, or a specified debt obligation in, the taxpayer’s first taxation year that begins after the particular time;

(c)  had an adjusted cost base to the taxpayer at the particular time greater than its fair market value at that time; and

(d)  is designated by the taxpayer in the election.

Where a taxpayer elects under this section, the Minister shall, for the purposes of Part I and notwithstanding sections 1010 to 1011, make such assessment or reassessment of the taxpayer’s tax, interest and penalties as is necessary for the taxpayer’s last taxation year that ended before 23 February 1994 to give effect to the election.

2001, c. 7, s. 131; 2004, c. 4, s. 7.