I-3 - Taxation Act

Section 218 Disposition versions

2020-09-24

218. Where a prospector receives a share of the capital stock of a corporation as consideration for the disposition to the corporation of a mining property or right in that property acquired by him as a result of his efforts as a prospector, the following rules apply:

(a)  he shall not include any amount in respect of the receipt of the share in computing his income, except as provided in paragraph b , or in computing the amount contemplated in paragraph b of section 412;

(b)  he shall include in respect of the receipt of the share in computing his income for the year in which the share is disposed of or exchanged an amount equal to the lesser of the following amounts:

i.  the fair market value of the share at the time of its acquisition;

ii.  the fair market value of the share at the time of its disposition or exchange;

(c)  he shall not include any amount in computing the cost of the share in respect of the disposition of the mining property or the right therein, as the case may be;

(d)  the corporation shall not include any amount in respect of the share in computing the cost of the mining property or the right therein;

(e)  for the purpose of paragraph b, a prospector is deemed to have disposed of or exchanged shares that are identical properties in the order in which they were acquired.

1972, c. 23, s. 206; 1977, c. 26, s. 20; 1987, c. 67, s. 43; 1997, c. 3, s. 71; 2020, c. 16, s. 188.

2006-03-01

218. Where a prospector receives a share of the capital stock of a corporation as consideration for the disposition to the corporation of a mining property or interest in that property acquired by him as a result of his efforts as a prospector, the following rules apply:

(a)  he shall not include any amount in respect of the receipt of the share in computing his income, except as provided in paragraph b , or in computing the amount contemplated in paragraph b of section 412;

(b)  he shall include in respect of the receipt of the share in computing his income for the year in which the share is disposed of or exchanged an amount equal to the lesser of the following amounts:

i.  the fair market value of the share at the time of its acquisition;

ii.  the fair market value of the share at the time of its disposition or exchange;

(c)  he shall not include any amount in computing the cost of the share in respect of the disposition of the mining property or the interest therein, as the case may be;

(d)  the corporation shall not include any amount in respect of the share in computing the cost of the mining property or the interest therein;

(e)  for the purpose of paragraph b, a prospector is deemed to have disposed of or exchanged shares that are identical properties in the order in which they were acquired.

1972, c. 23, s. 206; 1977, c. 26, s. 20; 1987, c. 67, s. 43; 1997, c. 3, s. 71.