I-3 - Taxation Act

Section 888 Disposition versions

2006-03-01

888. Where a trustee under a deferred profit sharing plan has, at any time in a taxation year, made under the plan a single payment that included shares referred to in section 886 to a beneficiary who was resident in Canada at the time and the beneficiary has made the election referred to in section 886 in respect of that payment, the following rules apply:

(a)  the trustee is deemed to have disposed of those shares for proceeds of disposition equal to the cost amount to the trust of those shares immediately before the single payment was made;

(b)  the cost to the beneficiary of those shares is deemed to be equal to their cost amount to the trust immediately before the single payment was made;

(c)  the cost to the beneficiary of each of those shares is deemed to be equal to the proportion of the amount determined under paragraph a in respect of all those shares that the fair market value of the share at the time the single payment was made is of that of all those shares at the same time;

(d)  for the application of paragraph d of section 339 to the taxation years 1989 and 1990, the cost to the beneficiary of those shares is an eligible amount in respect of the beneficiary for the year.

1973, c. 17, s. 107; 1987, c. 67, s. 166; 1991, c. 25, s. 109; 1997, c. 85, s. 199.