I-3 - Taxation Act

Section 97 Disposition versions

2006-03-01

97. Where one or more depreciable properties of a taxpayer that were included in a prescribed class, in this section referred to as the “old class”, become included at any time, in this section referred to as the “transfer time”, in another prescribed class, in this section referred to as the “new class”, the following rules apply for the purpose of determining at any subsequent time the undepreciated capital cost to the taxpayer of depreciable property of the old class and the new class:

(a)  for the purposes of subparagraph i of subparagraph e of the first paragraph of section 93, each of those depreciable properties is deemed to be property of the new class acquired before the subsequent time and never to have been included in the old class; and

(b)  the taxpayer shall deduct in computing the total depreciation allowed to the taxpayer before the subsequent time in respect of property of the old class, and add in computing the total depreciation allowed to the taxpayer before the subsequent time in respect of property of the new class, an amount equal to the greater of

i.  the amount by which the aggregate of all amounts each of which is the capital cost to the taxpayer of each of those depreciable properties exceeds the undepreciated capital cost to the taxpayer of depreciable property of the old class at the transfer time, and

ii.  the aggregate of all amounts each of which is an amount that would have been deducted under paragraph a of section 130 in respect of a depreciable property that is one of those depreciable properties in computing the taxpayer’s income for a taxation year that ended before the transfer time and at the end of which the property was included in the old class, had the property been the only property included in a separate prescribed class and had the rate prescribed by the regulations made under that paragraph a in respect of that separate prescribed class been the effective rate that was used by the taxpayer to determine the amounts deducted by the taxpayer under that paragraph a in respect of property of the old class for the year.

1972, c. 23, s. 87; 1975, c. 22, s. 12; 1990, c. 59, s. 54; 1998, c. 16, s. 85; 2001, c. 53, s. 260.