I-3, r. 1 - Regulation respecting the Taxation Act

Section 140.1r5 Disposition versions

2012-09-01

140.1R5. For the purposes of subparagraph b of the second paragraph of section 140.1R2, the following rules apply:

(a)  the principal amount outstanding at any time of a lending asset of a taxpayer that is a share of the capital stock of a corporation is equal to the part of the consideration received by the corporation for the issue of the share that is outstanding at that time;

(b)  where a taxpayer realizes a loss on the disposition of a loan or lending asset described in subparagraph ii of subparagraph a of the first paragraph of section 140.1R2 or on the disposition of a specified loan described in subparagraph b of that first paragraph, referred to in this paragraph as the “former loan”, for consideration that included another loan or lending asset that was a loan or lending asset described in that subparagraph ii or in that subparagraph b, referred to in this paragraph as the “new loan”, and where, in the case of a former loan that is not a specified loan, that loss is included in computing the taxpayer’s provisionable assets, as reported for the year with the Superintendent of Financial Institutions of Canada, pursuant to the guidelines established by the Superintendent, for the purpose of determining the taxpayer’s general provisions or specific provisions in respect of exposures to designated countries, the principal amount of the new loan outstanding at the time it was acquired by the taxpayer is deemed to be equal to the principal amount of the former loan outstanding immediately before that time; and

(c)  where, at the end of a particular taxation year, a taxpayer is the owner of a specified loan that was described in an inventory of the taxpayer at the end of the preceding taxation year, the amortized cost of the specified loan for the taxpayer at the end of the particular taxation year is equal to its value determined in accordance with sections 83 to 85.6 of the Act at the end of the preceding taxation year for the purposes of computing the taxpayer’s income for that preceding year.

s. 140.1R6; O.C. 366-94, s. 17; O.C. 1707-97, s. 98; O.C. 1470-2002, s. 27; O.C. 134-2009, s. 1.