- (i) the amount, if any, by which the amount otherwise determined for F or G in that definition exceeds the undepreciated capital cost to the taxpayer of property of the prescribed class to which the former property belonged at the time immediately before the time that the former property was disposed of, and
- (ii) the amount that has been used by the taxpayer to acquire
- (A) if the former property is described in paragraph (a), before the later of the end of the second taxation year following the initial year and 24 months after the end of the initial year, or
- (B) in any other case, before the later of the end of the first taxation year following the initial year and 12 months after the end of the initial year,
a replacement property of a prescribed class that has not been disposed of by the taxpayer before the time at which the taxpayer disposed of the former property, and
- (i) the time the replacement property was acquired by the taxpayer, and
- (ii) the time the former property was disposed of by the taxpayer.
- (a) it is reasonable to conclude that the property was acquired by the taxpayer to replace the former property;
- (a.1) it was acquired by the taxpayer and used by the taxpayer or a person related to the taxpayer for a use that is the same as or similar to the use to which the taxpayer or a person related to the taxpayer put the former property;
- (b) where the former property was used by the taxpayer or a person related to the taxpayer for the purpose of gaining or producing income from a business, the particular depreciable property was acquired for the purpose of gaining or producing income from that or a similar business or for use by a person related to the taxpayer for such a purpose;
- (c) where the former property was a taxable Canadian property of the taxpayer, the particular depreciable property is a taxable Canadian property of the taxpayer; and
- (d) where the former property was a taxable Canadian property (other than treaty-protected property) of the taxpayer, the particular depreciable property is a taxable Canadian property (other than treaty-protected property) of the taxpayer.
- (a) a taxpayer (in this subsection and subsection (4.3) referred to as the “transferor”) has, pursuant to a written agreement with a person or partnership (in this subsection and subsection (4.3) referred to as the “transferee”), at any time disposed of or terminated a former property that is a franchise, concession or licence for a limited period that is wholly attributable to the carrying on of a business at a fixed place;
- (b) the transferee acquired the former property from the transferor or, on the termination, acquired a similar property in respect of the same fixed place from another person or partnership; and
- (c) the transferor and the transferee jointly elect in their returns of income for their taxation years that include that time to have subsection (4.3) apply in respect of the acquisition and the disposition or termination.
- (a) if the transferee acquired a similar property referred to in paragraph (4.2)(b), the transferee is deemed to have also acquired the former property at the time that the former property was terminated and to own the former property until the transferee no longer owns the similar property;
- (b) if the transferee acquired the former property referred to in paragraph (4.2)(b), the transferee is deemed to own the former property until such time as the transferee owns neither the former property nor a similar property in respect of the same fixed place to which the former property related;
- (c) for the purpose of calculating the amount deductible under paragraph 20(1)(a) in respect of the former property in computing the transferee’s income, the life of the former property remaining on its acquisition by the transferee is deemed to be equal to the period that was the life of the former property remaining on its acquisition by the transferor; and
- (d) any amount that would, if this Act were read without reference to this subsection, be included in the cost of a property of the transferee included in Class 14.1 of Schedule II to the Income Tax Regulations (including a deemed acquisition under subsection (35)) or included in the proceeds of disposition of a property of the transferor included in that Class (including a deemed disposition under subsection (37)) in respect of the disposition or termination of the former property by the transferor is deemed to be
- (i) neither included in the cost nor the proceeds of disposition of property included in that Class,
- (ii) an amount required to be included in computing the capital cost to the transferee of the former property, and
- (iii) an amount required to be included in computing the proceeds of disposition to the transferor in respect of a disposition of the former property.
- (a) the value of A in the definition in subsection 13(21) shall be determined as if each of those depreciable properties were
- (i) properties of the new class acquired before the subsequent time, and
- (ii) never included in the old class; and
A - B where is the total of all amounts each of which is the capital cost to the taxpayer of each of those depreciable properties, and is the undepreciated capital cost to the taxpayer of depreciable property of the old class at the transfer time, and
- (A) the property had been the only property included in a separate prescribed class, and
- (B) the rate allowed by the regulations made for the purpose of paragraph 20(1)(a) in respect of that separate class had been the effective rate that was used by the taxpayer to calculate a deduction under that paragraph in respect of the old class for the year.
- (a) the leasehold interest shall be deemed to have been disposed of by the taxpayer at that time for proceeds of disposition equal to the amount, if any, by which
- (i) the capital cost immediately before that time of the leasehold interest
- (ii) the total of all amounts claimed by the taxpayer in respect of the leasehold interest and deductible under paragraph 20(1)(a) in computing the taxpayer’s income in previous taxation years;
- (a) the property shall be deemed to have been acquired by the taxpayer at that time at a cost equal to the lesser of
- (i) the fair market value of the property at that time determined without reference to any option with respect to that property, and
- (ii) the total of the cost or the capital cost (determined without reference to this subsection) of the property to the taxpayer and all amounts (other than amounts paid or payable to a person with whom the taxpayer was not dealing at arm’s length) each of which is an outlay or expense made or incurred by the taxpayer or by a person with whom the taxpayer was not dealing at arm’s length at any time for the use of, or the right to use, the property,
and for the purposes of this paragraph and subsection 13(5.3), where a particular corporation has been incorporated or otherwise formed after the time any other corporation with which the particular corporation would not have been dealing at arm’s length had the particular corporation been in existence before that time, the particular corporation shall be deemed to have been in existence from the time of the formation of the other corporation and to have been not dealing at arm’s length with the other corporation;
- (a) an amount equal to the lesser of
- (i) the total of all amounts (other than amounts paid or payable to the taxpayer or a person with whom the taxpayer was not dealing at arm’s length) each of which was a deductible outlay or expense made or incurred before the time of disposition by the taxpayer, or by a person with whom the taxpayer was not dealing at arm’s length, for the use of, or the right to use, during the period of time, the property, and
- (ii) the amount, if any, by which the fair market value of the property at the earlier of
- (A) the expiration of the last period of time in respect of which the deductible outlay or expense referred to in subparagraph 13(5.4)(a)(i) was made or incurred, and
- (B) the time of the disposition
exceeds the capital cost to the taxpayer of the property immediately before that time
shall immediately before the time of the disposition, be added to the capital cost of the property to the person who owned the property at that time; and
- (a) where a taxpayer, having acquired property for the purpose of gaining or producing income, has begun at a later time to use it for some other purpose, the taxpayer shall be deemed to have disposed of it at that later time for proceeds of disposition equal to its fair market value at that time and to have reacquired it immediately thereafter at a cost equal to that fair market value;
- (b) where a taxpayer, having acquired property for some other purpose, has begun at a later time to use it for the purpose of gaining or producing income, the taxpayer shall be deemed to have acquired it at that later time at a capital cost to the taxpayer equal to the lesser of
- (i) the fair market value of the property at that later time, and
- (ii) the total of
- (A) the cost to the taxpayer of the property at that later time determined without reference to this paragraph, paragraph 13(7)(a) and subparagraph 13(7)(d)(ii), and
- (B) 1/2 of the amount, if any, by which
- (I) the fair market value of the property at that later time
exceeds the total of
- (II) the cost to the taxpayer of the property as determined under clause 13(7)(b)(ii)(A), and
- (III) twice the amount deducted by the taxpayer under section 110.6 in respect of the amount, if any, by which the fair market value of the property at that later time exceeds the cost to the taxpayer of the property as determined under clause 13(7)(b)(ii)(A);
- (i) if the use regularly made by the taxpayer of the property for the purpose of gaining or producing income has increased, the taxpayer shall be deemed to have acquired at that time depreciable property of that class at a capital cost equal to the total of
- (A) the proportion of the lesser of
- (I) its fair market value at that time, and
- (II) its cost to the taxpayer at that time determined without reference to this subparagraph, subparagraph 13(7)(d)(ii) and paragraph 13(7)(a)
that the amount of the increase in the use regularly made by the taxpayer of the property for that purpose is of the whole of the use regularly made of the property, and
- (I) the amount deemed under subparagraph 45(1)(c)(ii) to be the taxpayer’s proceeds of disposition of the property in respect of the change
exceeds the total of
- (II) that proportion of the cost to the taxpayer of the property as determined under subclause 13(7)(d)(i)(A)(II) that the amount of the increase in the use regularly made by the taxpayer of the property for that purpose is of the whole of the use regularly made of the property, and
- (III) twice the amount deducted by the taxpayer under section 110.6 in respect of the amount, if any, by which the amount determined under subclause 13(7)(d)(i)(B)(I) exceeds the amount determined under subclause 13(7)(d)(i)(B)(II), and
- (i) where the transferor was an individual resident in Canada or a partnership any member of which was either an individual resident in Canada or another partnership and the cost of the property to the taxpayer at the particular time determined without reference to this paragraph exceeds the cost, or where the property was depreciable property, the capital cost of the property to the transferor immediately before the transferor disposed of it, the capital cost of the property to the taxpayer at the particular time shall be deemed to be the amount that is equal to the total of
- (A) the cost or capital cost, as the case may be, of the property to the transferor immediately before the particular time, and
- (B) 1/2 of the amount, if any, by which
- (I) the transferor’s proceeds of disposition of the property
exceed the total of
- (II) the cost or capital cost, as the case may be, to the transferor immediately before the particular time,
- (III) twice the amount deducted by any person under section 110.6 in respect of the amount, if any, by which the amount determined under subclause 13(7)(e)(i)(B)(I) exceeds the amount determined under subclause 13(7)(e)(i)(B)(II), and
- (IV) the amount, if any, required by subsection 110.6(21) to be deducted in computing the capital cost to the taxpayer of the property at that time
and for the purposes of paragraph 13(7)(b) and subparagraph 13(7)(d)(i), the cost of the property to the taxpayer shall be deemed to be the same amount,
- (A) the cost or capital cost, as the case may be, of the property to the transferor immediately before the particular time, and
- (B) 1/2 of the amount, if any, by which the transferor’s proceeds of disposition of the property exceed the cost or capital cost, as the case may be, to the transferor immediately before the particular time
and for the purposes of paragraph 13(7)(b) and subparagraph 13(7)(d)(i), the cost of the property to the taxpayer shall be deemed to be the same amount, and
- (i) the capital cost to the taxpayer of the property at the time of the disposition, and
- (ii) 1/2 of the amount, if any, by which the taxpayer’s proceeds of disposition of the property exceed the capital cost to the taxpayer of the property at the time of the disposition;
- (i) the fair market value of the vehicle at that time,
- (ii) the amount that immediately before that time was the cost amount to that person of the vehicle, and
- (iii) $20,000 or such other amount as is prescribed; and
- (A) if the vehicle is disposed of to a person or partnership with which the taxpayer deals at arm’s length, the capital cost to the taxpayer of the vehicle, and
- (B) in any other case, the amount determined for C, and
is the cost to the taxpayer of the vehicle, is the amount determined under paragraph (7.1)(d) in respect of the vehicle at the time of disposition, is the maximum amount determined for C in the definition in subsection (21) in respect of the vehicle, is the amount determined under paragraph (7.1)(f) in respect of the vehicle at the time of disposition, and is the maximum amount determined for J in the definition in subsection (21) in respect of the vehicle.
- (a) an amount described in paragraph 37(1)(d),
- (b) an amount deducted as an allowance under section 65,
- (b.1) an amount included in income by virtue of paragraph 12(1)(u) or 56(1)(s), or
- (b.2) an amount received as an as defined in subsection 12(11),
the capital cost of the property to the taxpayer at any particular time shall be deemed to be the amount, if any, by which the total of
- (c) the capital cost of the property to the taxpayer, determined without reference to this subsection, subsection 13(7.4) and section 80, and
- (d) such part, if any, of the assistance as has been repaid by the taxpayer, pursuant to an obligation to repay all or any part of that assistance, in respect of that property before the disposition thereof by the taxpayer and before the particular time
exceeds the total of
- (e) where the property was acquired in a taxation year ending before the particular time, all amounts deducted under subsection 127(5) or (6), 127.44(3), 127.45(6), 127.48(3) or 127.49(6) by the taxpayer for a taxation year ending before the particular time,
- (f) the amount of assistance the taxpayer has received or is entitled, before the particular time, to receive, and
- (g) all amounts by which the capital cost of the property to the taxpayer is required because of section 80 to be reduced at or before that time,
in respect of that property before the disposition thereof by the taxpayer.
- (a) the executor, liquidator or trustee did not acquire control of the corporations as a result of one or more estates or trusts created by the same individual or by two or more individuals not dealing with each other at arm’s length, and
- (b) the estate or trust under which the executor, liquidator or trustee acquired control of each of the corporations arose only on the death of the individual creating the estate or trust,
the two corporations are deemed not to be related to each other at the particular time.
- (a) the capital cost of the property to the taxpayer otherwise determined, applying the provisions of subsection 13(7.1), where necessary, and
- (b) such part, if any, of the amount received by the taxpayer as has been repaid by the taxpayer pursuant to a legal obligation to repay all or any part of that amount, in respect of that property and before the disposition thereof by the taxpayer, and as may reasonably be considered to be in respect of the amount elected under this subsection in respect of the property
exceeds the amount elected by the taxpayer under this subsection, but in no case shall the amount elected under this subsection exceed the least of
- (c) the amount so received by the taxpayer,
- (d) the capital cost of the property to the taxpayer otherwise determined, and
- (e) where the taxpayer has disposed of the property before the year, nil.
- (a) the amount is repaid by the taxpayer under a legal obligation to repay all or part of an amount the taxpayer received or was entitled to receive that was assistance from a government, municipality or other public authority (whether as a grant, subsidy, forgivable loan, deduction from tax, investment allowance or as any other form of assistance) in respect of, or for the acquisition of, property the cost of which was an eligible capital expenditure of the taxpayer in respect of the business;
- (b) the amount of an eligible capital expenditure of the taxpayer in respect of the business was reduced by paragraph 14(10)(c) because of the assistance referred to in paragraph (a); and
- (c) paragraph 20(1)(hh.1) does not apply in respect of the amount repaid.
- (a) where a taxpayer, to acquire a property prescribed in respect of the taxpayer, is required under the terms of a contract made after March 6, 1996 to make a payment to Her Majesty in right of Canada or a province or to a Canadian municipality in respect of costs incurred or to be incurred by the recipient of the payment
- (i) the taxpayer is deemed to have acquired the property at a capital cost equal to the portion of that payment made by the taxpayer that can reasonably be regarded as being in respect of those costs, and
- (ii) the time of acquisition of the property by the taxpayer is deemed to be the later of the time the payment is made and the time at which those costs are incurred;
- (i) at any time after March 6, 1996 a taxpayer incurs a cost on account of capital for the building of, for the right to use or in respect of, a prescribed property, and
- (ii) the amount of the cost would, if this paragraph did not apply, not be included in the capital cost to the taxpayer of depreciable property of a prescribed class,
the taxpayer is deemed to have acquired the property at that time at a capital cost equal to the amount of the cost;
- (i) the property referred to in paragraph (a) or (b) is deemed to include the intangible or incorporeal property, and
- (ii) the portion of the capital cost referred to in paragraph (a) or (b) that applies to the intangible or incorporeal property is deemed to be the amount determined by the formula
A × B/C where is the lesser of the amount of the payment made or cost incurred and the amount determined for C, is the fair market value of the intangible or incorporeal property at the time the payment was made or the cost was incurred, and is the fair market value at the time the payment was made or the cost was incurred of all intangible or incorporeal properties acquired as a consequence of making the payment or incurring the cost; and
- (i) is deemed to have been acquired for the purpose for which the payment was made or the cost was incurred, and
- (ii) is deemed to be owned by the taxpayer at any subsequent time that the taxpayer benefits from the property.
- (a) for use in a prescribed manufacturing or processing business carried on by the taxpayer, and
- (b) that was not used for any purpose whatever before it was acquired by the taxpayer,
the taxpayer shall be deemed to have acquired that property at a capital cost to the taxpayer equal to 115% of the amount that, but for this subsection and section 21, would have been the capital cost to the taxpayer of that property.
- (a) for the year, or
- (b) for the year in which the property was acquired,
whichever is the later.
- (a) subsection 13(1) and Subdivision C do not apply to the proceeds of disposition
- (i) if an amount at least equal to the proceeds of disposition was used by the taxpayer, before May, 1974 and during the taxation year of the taxpayer in which the vessel was disposed of or within 4 months after the end of that taxation year, under conditions satisfactory to the appropriate minister, either for replacement or to incur any conversion cost with respect to a vessel owned by the taxpayer, or
- (ii) if the appropriate minister certified that the taxpayer had, on satisfactory terms, deposited
- (A) on or before the day on which the taxpayer was required to file a return of the taxpayer’s income for the taxation year in which the vessel was disposed of, or
- (B) on or before such day subsequent to the day referred to in clause 13(15)(a)(ii)(A) as the appropriate minister specified in respect of the taxpayer,
an amount at least equal to the tax that would, but for this subsection, have been payable by the taxpayer under this Part in respect of the proceeds of disposition, or satisfactory security therefor, as a guarantee that the proceeds of disposition would be used before 1975 for replacement; and
- (i) the taxpayer elected to have the vessel constituted a prescribed class, or
- (ii) where any conversion cost in respect of the vessel was included in a separate prescribed class, the taxpayer elected to have the vessel transferred to that class,
the vessel shall be deemed to have been so transferred immediately before the disposition thereof, but this paragraph does not apply unless the proceeds of disposition of the vessel exceed the amount that would be the undepreciated capital cost of property of the class to which it would be so transferred.
- (a) used an amount as described in paragraph 13(4)(c), or
- (b) made an election under paragraph 13(15)(b) in respect of a vessel and the proceeds of disposition of the vessel were used before 1975 for replacement under conditions satisfactory to the appropriate minister,
such reassessments of tax, interest or penalties shall be made as are necessary to give effect to subsections 13(4) and 13(15).
- (a) that was constructed in Canada and is registered in Canada or is registered under conditions satisfactory to the appropriate minister in any country or territory to which the British Commonwealth Merchant Shipping Agreement, signed at London on December 10, 1931, applies, and
- (b) in respect of the capital cost of which no allowance has been made to any other taxpayer under this Act or the Canadian Vessel Construction Assistance Act ,
or incurs any conversion cost with respect to a vessel owned by that person that is registered in Canada or is registered under conditions satisfactory to the appropriate minister in any country or territory to which the agreement referred to in paragraph 13(19)(a) applies, but the ratio of the amount paid out to the amount of the deposit shall not exceed the ratio of the capital cost to that person of the vessel or the conversion cost to that person of the vessel, as the case may be, to the proceeds of disposition of the vessel disposed of, and any deposit or part of a deposit not so paid out before July 1, 1975 or not paid out pursuant to subsection 13(20) shall be paid to the Receiver General and form part of the Consolidated Revenue Fund.
- (a) to acquire a vessel described in paragraphs 13(19)(a) and 13(19)(b), or
- (b) to incur any conversion cost with respect to a vessel owned by that person that is registered in Canada or is registered under conditions satisfactory to the appropriate minister in any country or territory to which the agreement referred to in paragraph 13(19)(a) applies,
the appropriate minister may refund to the taxpayer the deposit, or the part thereof not paid out to the taxpayer under subsection 13(19), as the case may be, in which case there shall be added, in computing the income of the taxpayer for the taxation year of the taxpayer in which the vessel was disposed of, that proportion of the amount that would have been included in computing the income for the year under this Part had the deposit not been made under subparagraph 13(15)(a)(ii) that the portion of the proceeds of disposition not so used before 1975 as such a replacement is of the proceeds of disposition, and, notwithstanding any other provision of this Act, such reassessments of tax, interest or penalties shall be made as are necessary to give effect to this subsection.
- (a) the sale price of property that has been sold,
- (b) compensation for property unlawfully taken,
- (c) compensation for property destroyed and any amount payable under a policy of insurance in respect of loss or destruction of property,
- (d) compensation for property taken under statutory authority or the sale price of property sold to a person by whom notice of an intention to take it under statutory authority was given,
- (e) compensation for property injuriously affected, whether lawfully or unlawfully or under statutory authority or otherwise,
- (f) compensation for property damaged and any amount payable under a policy of insurance in respect of damage to property, except to the extent that the compensation or amount, as the case may be, has within a reasonable time after the damage been expended on repairing the damage,
- (g) an amount by which the liability of a taxpayer to a mortgagee or hypothecary creditor is reduced as a result of the sale of mortgaged or hypothecated property under a provision of the mortgage or hypothec, plus any amount received by the taxpayer out of the proceeds of the sale, and
- (h) any amount included because of section 79 in computing a taxpayer’s proceeds of disposition of the property; ( produit de disposition )
of a taxpayer means
- (a) a right or licence to cut or remove timber from a limit or area in Canada (in this definition referred to as an “original right”) if
- (i) that original right was acquired by the taxpayer (other than in the manner referred to in paragraph 13(21) (b)) after May 6, 1974, and
- (ii) at the time of the acquisition of the original right
- (A) the taxpayer may reasonably be regarded as having acquired, directly or indirectly, the right to extend or renew that original right or to acquire another such right or licence in substitution therefor, or
- (B) in the ordinary course of events, the taxpayer may reasonably expect to be able to extend or renew that original right or to acquire another such right or licence in substitution therefor, or
- (i) as an extension or renewal of or as one of a series of extensions or renewals of an original right of the taxpayer, or
- (ii) as having been acquired in substitution for or as one of a series of substitutions for an original right of the taxpayer or any renewal or extension thereof; ( avoir forestier )
allowed to a taxpayer before any time for property of a prescribed class means the total of all amounts each of which is an amount deducted by the taxpayer under paragraph 20(1)(a) in respect of property of that class or an amount deducted under subsection 20(16), or that would have been so deducted but for subsection 20(16.1), in computing the taxpayer’s income for taxation years ending before that time; ( amortissement total )
to a taxpayer of depreciable property of a prescribed class as of any time means the amount determined by the formula
(A + B + C + D + D.1) - (E + E.1 + F + G + H + I + J + K)
- (a) the proceeds of disposition of the property minus any outlays and expenses to the extent that they were made or incurred by the taxpayer for the purpose of making the disposition, and
- (b) the capital cost to the taxpayer of the property,
means a vessel as defined in the Canada Shipping Act . ( navire )
- (a) where in the year the taxpayer or a person with whom the taxpayer does not deal at arm’s length disposes of land subjacent to, or immediately contiguous to and necessary for the use of, the building, the proceeds of disposition of the building are deemed to be the lesser of
- (i) the amount, if any, by which
- (A) the total of the fair market value of the building at the particular time and the fair market value of the land immediately before its disposition
- (B) the lesser of the fair market value of the land immediately before its disposition and the amount, if any, by which the cost amount to the vendor of the land (determined without reference to this subsection) exceeds the total of the capital gains (determined without reference to subparagraphs 40(1)(a)(ii) and (iii)) in respect of dispositions of the land within 3 years before the particular time by the taxpayer or by a person with whom the taxpayer was not dealing at arm’s length to the taxpayer or to another person with whom the taxpayer was not dealing at arm’s length, and
- (A) the fair market value of the building at the particular time, and
- (B) the lesser of the cost amount and the capital cost to the taxpayer of the building immediately before its disposition,
and notwithstanding any other provision of this Act, the proceeds of disposition of the land are deemed to be the amount, if any, by which
- (iii) the total of the proceeds of disposition of the building and of the land determined without reference to this subsection and subsection 13(21.2)
- (iv) the proceeds of disposition of the building as determined under this paragraph,
and the cost to the purchaser of the land shall be determined without reference to this subsection; and
- (i) the proceeds of disposition of the building determined without reference to this subsection and subsection 13(21.2), and
- (ii) 1/2 of the amount by which the greater of
- (A) the cost amount to the taxpayer of the building, and
- (B) the fair market value of the building
immediately before its disposition exceeds the proceeds of disposition referred to in subparagraph 13(21.1)(b)(i).
- (a) a person or partnership (in this subsection referred to as the “transferor”) disposes at a particular time (otherwise than in a disposition described in any of paragraphs (c) to (g) of the definition in section 54) of a depreciable property — other than, for the purposes of computing the exempt surplus or exempt deficit and taxable surplus or taxable deficit of a foreign affiliate of a taxpayer, in respect of the taxpayer, where the transferor is the affiliate or is a partnership of which the affiliate is a member, depreciable property that is, or would be, if the transferor were a foreign affiliate of the taxpayer, excluded property (within the meaning assigned by subsection 95(1)) of the transferor — of a particular prescribed class of the transferor,
- (b) the lesser of
- (i) the capital cost to the transferor of the transferred property, and
- (ii) the proportion of the undepreciated capital cost to the transferor of all property of the particular class immediately before that time that
- (A) the fair market value of the transferred property at that time
- (B) the fair market value of all property of the particular class immediately before that time
exceeds the amount that would otherwise be the transferor’s proceeds of disposition of the transferred property at the particular time, and
the following rules apply:
- (d) sections 85 and 97 do not apply to the disposition,
- (e) for the purposes of applying this section and section 20 and any regulations made for the purpose of paragraph 20(1)(a) to the transferor for taxation years that end after the particular time,
- (i) the transferor is deemed to have disposed of the transferred property for proceeds equal to the lesser of the amounts determined under subparagraphs 13(21.2)(b)(i) and 13(21.2)(b)(ii) with respect to the transferred property,
- (ii) where two or more properties of a prescribed class of the transferor are disposed of at the same time, subparagraph (i) applies as if each property so disposed of had been separately disposed of in the order designated by the transferor or, if the transferor does not designate an order, in the order designated by the Minister,
- (iii) the transferor is deemed to own a property that was acquired before the beginning of the taxation year that includes the particular time at a capital cost equal to the amount of the excess described in paragraph 13(21.2)(b), and that is property of the particular class, until the time that is immediately before the first time, after the particular time,
- (A) at which a 30-day period begins throughout which neither the transferor nor a person affiliated with the transferor owns or has a right to acquire the transferred property (other than a right, as security only, derived from a mortgage, hypothec, agreement for sale or similar obligation),
- (B) at which the transferred property is not used by the transferor or a person affiliated with the transferor for the purpose of earning income and is used for another purpose,
- (C) at which the transferred property would, if it were owned by the transferor, be deemed by section 128.1 or subsection 149(10) to have been disposed of by the transferor,
- (D) that is immediately before the transferor is subject to a loss restriction event, or
- (E) if the transferor is a corporation,
- (I) for the purposes of computing the transferor’s foreign accrual property income, exempt surplus or exempt deficit, and taxable surplus or taxable deficit, in respect of a taxpayer for a taxation year of the transferor where the transferor is a foreign affiliate of the taxpayer, at which the liquidation and dissolution of the transferor begins, unless the liquidation and dissolution is 1 a qualifying liquidation and dissolution (within the meaning assigned by subsection 88(3.1)) of the transferor, or 2 a designated liquidation and dissolution (within the meaning assigned by subsection 95(1)) of the transferor, and
- (II) for any other purposes, at which the winding-up (other than a winding-up to which subsection 88(1) applies) of the transferor begins, and
- (i) the subsequent owner’s capital cost of the transferred property is deemed to be the amount that was the transferor’s capital cost of the transferred property, and
- (ii) the amount by which the transferor’s capital cost of the transferred property exceeds its fair market value at the particular time is deemed to have been deducted under paragraph 20(1)(a) by the subsequent owner in respect of property of that class in computing income for taxation years that ended before the particular time.
- (a) subject to paragraph (b), for the purposes of the description of A in the definition in subsection (21) and of sections 127, 127.1, 127.44, 127.45, 127.48 and 127.49, the property is deemed
- (i) not to have been acquired by the taxpayer, partnership or trust, as the case may be, before that time, and
- (ii) to have been acquired by it immediately after that time; and
- (a) in existence; and
- (b) affiliated with every person with whom it was affiliated (otherwise than because of a right referred to in paragraph 251(5)(b)) throughout the period that began when it was formed or created and that ended immediately before the time at which the taxpayer was subject to the loss restriction event referred to in that subsection.
- (a) the time the property is first used by the taxpayer for the purpose of earning income,
- (b) the time that is immediately after the beginning of the first taxation year of the taxpayer that begins more than 357 days after the end of the taxation year of the taxpayer in which the property was acquired by the taxpayer,
- (c) the time that is immediately before the disposition of the property by the taxpayer,
- (d) the time the property
- (i) is delivered to the taxpayer, or to a person or partnership (in this paragraph referred to as the “other person”) that will use the property for the benefit of the taxpayer, or, where the property is not of a type that is deliverable, is made available to the taxpayer or the other person, and
- (ii) is capable, either alone or in combination with other property in the possession at that time of the taxpayer or the other person, of being used by or for the benefit of the taxpayer or the other person to produce a commercially saleable product or to perform a commercially saleable service, including an intermediate product or service that is used or consumed, or to be used or consumed, by or for the benefit of the taxpayer or the other person in producing or performing any such product or service,
- (i) a corporation a class of shares of the capital stock of which is listed on a designated stock exchange,
- (ii) a corporation that is a public corporation because of an election made under subparagraph (b)(i) of the definition in subsection 89(1) or a designation made by the Minister in a notice to the corporation under subparagraph (b)(ii) of that definition, or
- (iii) a subsidiary wholly-owned corporation of a corporation described in subparagraph 13(27)(f)(i) or 13(27)(f)(ii),
the end of the taxation year for which depreciation in respect of the property is first deducted in computing the earnings of the corporation in accordance with generally accepted accounting principles and for the purpose of the financial statements of the corporation for the year presented to its shareholders,
and, for the purposes of paragraph 13(27)(f), where depreciation is calculated by reference to a portion of the cost of the property, only that portion of the property shall be considered to have become available for use at the end of the taxation year referred to in that paragraph.
- (a) the time all or substantially all of the building is first used by the taxpayer for the purpose for which it was acquired,
- (b) the time the construction of the building is complete,
- (c) the time that is immediately after the beginning of the taxpayer’s first taxation year that begins more than 357 days after the end of the taxpayer’s taxation year in which the property was acquired by the taxpayer,
- (d) the time that is immediately before the disposition of the property by the taxpayer, and
- (e) where the property is (within the meaning assigned by subsection 13(4.1)) a replacement for a former property described in paragraph 13(4)(a) that was acquired before 1990 or that became available for use at or before the time the replacement property is acquired, the time the replacement property is acquired,
and, for the purpose of this subsection, a renovation, alteration or addition to a particular building shall be considered to be a building separate from the particular building.
- (a) the property can reasonably be considered to be part of the project, and
- (b) the property has not otherwise become available for use,
if the taxpayer so elects in prescribed form filed with the taxpayer’s return of income under this Part for the particular year, that particular portion of the property the capital cost of which does not exceed the amount, if any, by which
- (c) the total of all amounts each of which is the capital cost to the taxpayer of a depreciable property (other than a building that is used or is to be used by the taxpayer principally for the purpose of gaining or producing gross revenue that is rent) that is part of the project, that was acquired by the taxpayer after 1989 and before the end of the taxpayer’s last taxation year that ends more than 357 days before the beginning of the inclusion year and that has not become available for use at or before the end of the inclusion year (except where the property has first become available for use before the end of the inclusion year because of this subsection or paragraph 13(27)(b) or 13(28)(c))
- (d) the total of all amounts each of which is the capital cost to the taxpayer of a depreciable property, other than the particular portion of the property, that is part of the project to the extent that the property is considered, because of this subsection, to have become available for use before the end of the inclusion year
shall be considered to have become available for use immediately before the end of the inclusion year.
- (a) the property was acquired
- (i) from a person with whom the taxpayer was not dealing at arm’s length (otherwise than because of a right referred to in paragraph 251(5)(b)) at the time the property was acquired by the taxpayer, or
- (ii) in the course of a reorganization in respect of which, if a dividend were received by a corporation in the course of the reorganization, subsection 55(2) would not apply to the dividend because of paragraph 55(3)(b); and
- (a) with whom the taxpayer was, at the time the taxpayer acquired the property, not dealing at arm’s length (otherwise than because of a right referred to in paragraph 251(5)(b)), or
- (b) in the course of a reorganization in respect of which, if a dividend were received by a corporation in the course of the reorganization, subsection 55(2) would not apply to the dividend because of the application of paragraph 55(3)(b), the taxpayer shall be deemed to have acquired the property at the time it was acquired by the transferor.
- (a) the total of all amounts paid or payable by the taxpayer for the use of, or the right to use, the property in a particular taxation year and before the time the property would have been considered to have become available for use by the taxpayer if the taxpayer had acquired the property, and that, but for this subsection, would be deductible in computing the taxpayer’s income for any taxation year
- (b) the total of all amounts received or receivable by the taxpayer for the use of, or the right to use, the property in the particular taxation year and before that time and that are included in the income of the taxpayer for any taxation year shall be deemed to be a cost to the taxpayer of a property included in Class 13 in Schedule II to the Income Tax Regulations and not to be an amount paid or payable for the use of, or the right to use, the property.
- (a) there is deemed to be a single goodwill property in respect of the particular business;
- (b) if at any time the taxpayer acquires goodwill as part of an acquisition of all or a part of another business that is carried on, after the acquisition, as part of the particular business — or is deemed by subsection (35) to acquire goodwill in respect of the particular business — the cost of the goodwill is added at that time to the cost of the goodwill property in respect of the particular business;
- (c) if at any time the taxpayer disposes of goodwill as part of the disposition of part of the particular business, receives proceeds of disposition a portion of which is attributable to goodwill and continues to carry on the particular business or is deemed by subsection (37) to dispose of goodwill in respect of the particular business,
- (i) the taxpayer is deemed to dispose at that time of a portion of the goodwill property in respect of the particular business having a cost equal to the lesser of the cost of the goodwill property in respect of the particular business otherwise determined and the portion of the proceeds attributable to goodwill, and
- (ii) the cost of the goodwill property in respect of the particular business is reduced at that time by the amount determined under subparagraph (i); and
- (a) the cost, or any part of the cost, of a property;
- (b) deductible in computing the taxpayer’s income from the business (determined without reference to this subsection);
- (c) not deductible in computing the taxpayer’s income from the business because of any provision of this Act (other than paragraph 18(1)(b)) or the Income Tax Regulations ;
- (d) paid or payable to a creditor of the taxpayer as, on account of or in lieu of payment of, any debt, or on account of the redemption, cancellation or purchase of any bond or debenture; or
- (e) where the taxpayer is a corporation, partnership or trust, paid or payable to a person as a shareholder, partner or beneficiary, as the case may be, of the taxpayer.
- (a) in consideration for the purchase of shares; or
- (b) in consideration for the cancellation or assignment of an obligation to pay consideration referred to in paragraph (a).
- (a) the receipt is not included in computing the taxpayer’s income, or deducted in computing, for the purposes of this Act, any balance of undeducted outlays, expenses or other amounts for the taxation year or a preceding taxation year;
- (b) the receipt does not reduce the cost or capital cost of a property or the amount of an outlay or expense; and
- (c) the receipt is not included in computing any gain or loss of the taxpayer from a disposition of a capital property.
4/3 × (A + B – C) where is the amount that is the cumulative eligible capital in respect of the business at the beginning of that day, is the amount determined for F in the definition in subsection 14(5) (as that subsection applied immediately before that day) in respect of the business at the beginning of that day, and is the amount by which the total of all amounts determined, in respect of the business, for E or F in the definition in subsection 14(5) (as that subsection applied immediately before that day), exceeds the total of all amounts determined for A to D.1 in that definition in respect of the business at the beginning of that day, including any adjustment required by subparagraph (d)(i);
- (i) the taxpayer shall designate the order in which the capital cost of each property that is not the goodwill property is determined and, if the taxpayer does not designate an order, the Minister may designate the order,
- (ii) the capital cost of a particular property that is not the goodwill property in respect of the business is deemed to be the lesser of the eligible capital expenditure of the taxpayer in respect of the particular property and the amount by which the total capital cost of the class determined under paragraph (a) exceeds the total of all amounts each of which is an amount deemed by this subparagraph to be the capital cost of a property that is determined in advance of the determination of the capital cost of the particular property, and
- (iii) the capital cost of the goodwill property is deemed to be the amount by which the total capital cost of the class exceeds the total of all amounts each of which is an amount deemed by subparagraph (ii) to be the capital cost of a property;
- (i) the total of the total capital cost of the class and the amount determined for C in paragraph (a)
- (ii) the amount determined for A in paragraph (a); and
- (i) for the purposes of the formula in paragraph (a), 3/2 of the particular amount is to be included in computing the amount for B of the definition in subsection 14(5) (as that subsection applied immediately before that day),
- (ii) the taxpayer is deemed to dispose of a capital property in respect of the business immediately before that day for proceeds of disposition equal to twice the particular amount,
- (iii) if the taxpayer elects in writing to have this subparagraph apply and files that election with the Minister on or before the filing-due date for the particular year, subparagraph (ii) does not apply and an amount equal to the particular amount is to be included in computing the taxpayer’s income from the business for the particular year,
- (iv) if, on or after that day and in the particular year, the taxpayer acquires a property included in the class in respect of the business, or is deemed by subsection (35) to acquire goodwill in respect of the business, and the taxpayer elects in writing to have this subparagraph apply and files that election with the Minister on or before the filing-due date for the particular year,
- (A) for the purposes of subparagraphs (ii) and (iii), the particular amount is to be reduced by the lesser of the particular amount otherwise determined and 1/2 of the capital cost of the property or goodwill acquired (determined without reference to clause (B)), and
- (B) the capital cost of the property or goodwill acquired, as the case may be, is to be reduced by twice the amount by which the particular amount is reduced under clause (A), and
- (A) the proceeds of disposition of the capital property, and
- (B) the amount by which the proceeds of disposition of the qualified farm or fishing property exceed its cost.
- (a) if the particular property is not goodwill and is acquired before January 1, 2017 by the taxpayer, 1/4 of the capital cost of the particular property;
- (b) if the particular property is not goodwill, is acquired on or after that day by the taxpayer and subsection (40) deems an amount to have been allowed under paragraph 20(1)(a) in respect of the taxpayer’s acquisition of the particular property, that amount;
- (c) if the particular property (other than a property to which paragraph (b) applies) is not goodwill and is acquired on or after that day by the taxpayer — in circumstances under which any of subsections 24(2), 70(5.1), 73(3.1), 85(1), 88(1), 98(3) and (5), 107(2) and 107.4(3) apply — from a person or partnership that would have been deemed under this subsection to have acquired a property if none of those subsections had applied, the capital cost of the property that would have been deemed under this subsection to have been acquired by the person or partnership;
- (d) if the particular property is goodwill, the amount by which
- (i) the total of all amounts each of which is
- (A) 1/4 of the amount determined under subparagraph (38)(b)(iii) in respect of the business,
- (B) if goodwill is acquired on or after that day by the taxpayer and subsection (40) deems an amount to have been allowed under paragraph 20(1)(a) in respect of the taxpayer’s acquisition of the goodwill, that amount, or
- (C) if goodwill is acquired (other than an acquisition in respect of which clause (B) applies) on or after that day by the taxpayer — in circumstances under which any of subsections 24(2), 70(5.1), 73(3.1), 85(1), 88(1), 98(3) and (5), 107(2) and 107.4(3) apply — from a person or partnership that would have been deemed under this subsection to have acquired a property if none of those subsections had applied, the capital cost of the property that would have been deemed under this subsection to have been acquired by the person or partnership
- (ii) the total of all amounts each of which is the capital cost of a property deemed by this subsection to have been acquired by the taxpayer at or before that time in respect of another disposition of goodwill in respect of the business; and
- (a) for the purposes of the Act and its regulations (other than this section, section 20 and any regulations made for the purposes of paragraph 20(1)(a)), if the amount determined for A in the definition in subsection 14(5) would have been increased immediately before 2017 if the property had been disposed of immediately before that time, the capital cost of the property is deemed to be increased by 4/3 of the amount of that increase;
- (b) for purposes of this section, section 20 and any regulations made for the purposes of paragraph 20(1)(a), if the taxpayer was deemed by subsection 14(12) to continue to own eligible capital property in respect of the business and not to have ceased to carry on the business until a time that is after 2016, the taxpayer is deemed to continue to own the property and to continue to carry on the business until the time that is immediately before the first time one of the events that would be described in any of paragraphs 14(12)(c) to (g) (as they read immediately before 2017, if the reference to “eligible capital property” in paragraph 14(12)(d) were read as “eligible capital property or capital property”) occurs;
- (c) for the purposes of the descriptions of D.1 and K in the definition in subsection (21), the taxpayer is deemed not to have paid or received any amounts before 2017 as or on account of an existing or proposed countervailing or anti-dumping duty in respect of depreciable property of the class; and
- (d) subsection (7.1) does not apply to assistance that a taxpayer received or is entitled to receive before 2017 in respect of a property that was an eligible capital property immediately before 2017.
- (a) the amount is part of the proceeds of disposition of (as defined in section 54, as it read on December 31, 2016) that is in respect of the business;
- (b) the disposition is under an agreement between the taxpayer and a purchaser that deals at arm’s length with the taxpayer;
- (c) the disposition occurred before March 22, 2016;
- (d) the amount becomes receivable under the agreement after 2016 and before 2024 because of a condition of the agreement, if
- (i) at the end of 2016, it was uncertain whether the condition would be met, and
- (ii) the condition is met after 2016;
- [NOTE: Application provisions are not included in the consolidated text
- see relevant amending Acts and regulations.]
- R.S., 1985, c. 1 (5th Supp.), s. 13
- 1994, c. 7, Sch. II, s. 9, Sch. VIII, s. 4, c. 21, s. 7
- 1995, c. 1, s. 44, c. 3, s. 4, c. 21, s. 2
- 1997, c. 25, s. 3
- 1998, c. 19, s. 73
- 1999, c. 22, s. 6
- 2001, c. 17, ss. 6, 196
- 2007, c. 35, s. 68
- 2013, c. 34, ss. 54, 92, 175, c. 40, s. 6
- 2016, c. 12, s. 3
- 2019, c. 29, s. 2
- 2021, c. 23, s. 4
- 2022, c. 10, s. 3
- 2023, c. 26, s. 5
- 2024, c. 15, s. 4
- 2024, c. 17, s. 6
- 2024, c. 17, s. 80
- (i) the total of all amounts each of which is
- (i) the amount, if any, by which
- (A) the proportion of the lesser of