I-3 - Taxation Act

Section 857 Disposition versions

2006-03-01

857. A beneficiary must include in computing his income for a taxation year an amount which he receives in the year from a trustee under a profit sharing plan, except to the extent that such amount is allocated to:

(a)  a payment made by the employee to the trustee;

(b)  a capital gain made by the trust before 1972;

(c)  a capital gain of the trust for a taxation year ending after 1971 to the extent allocated by such trust to the beneficiary;

(d)  a gain made by the trust after 1971 from the disposition of a capital property, except to the extent that the gain is a capital gain made by trust for a taxation year ending after 1971;

(e)  a dividend received by the trust from a taxable Canadian corporation, other than a dividend described in section 501, to the extent allocated by the trust to the beneficiary;

(f)  an amount which must be included in computing the income of the employee for that year or a previous year; or

(g)  the portion of the increase in the value of property transferred to the beneficiary by the trust that would have been in 1971 a capital gain for it if it had sold it at its fair market value on 31 December 1971.

The portion of capital losses of the trust for its taxation years ending after 1971 that has been allocated by the trust to the beneficiary must however be deducted from the amount contemplated in one of the subparagraphs of the first paragraph if such portion has not been applied to reduce the amount contemplated in another of such paragraphs.

1972, c. 23, s. 645; 1973, c. 17, s. 100; 1977, c. 26, s. 90; 1978, c. 26, s. 167; 1997, c. 3, s. 71.