I-3 - Taxation Act

Section 153 Disposition versions

2020-09-24

153. Where an amount included in computing the taxpayer’s income from a business for the year or for a preceding taxation year in respect of a property sold in the course of the business is payable to the taxpayer after the end of the year and, except where the property is immovable property, all or part of the amount was, at the time of the sale, not due until at least two years after that time, the taxpayer may deduct a reasonable amount as a reserve in respect of such part of the amount so included in computing his income as can reasonably be regarded as a portion of the profit from the sale.

However, no deduction is allowed to a taxpayer under this section in respect of a property sold in the course of a business if

(a)  the taxpayer, at the end of the taxation year or in the following year,

i.  is exempt from tax under this Part, or

ii.  is not resident in Canada and does not carry on the business in Canada;

(b)  the sale of the property occurred more than 36 months before the end of the year;

(c)  the purchaser of the property sold is a corporation that, immediately after the sale,

i.  is controlled, directly or indirectly, in any manner whatever, by the taxpayer,

ii.  is controlled, directly or indirectly, in any manner whatever, by a person or group of persons that controls the taxpayer, directly or indirectly, in any manner whatever, or

iii.  controls the taxpayer, directly or indirectly, in any manner whatever; or

(d)  the purchaser of the property sold is a partnership in which the taxpayer is, immediately after the sale, a majority-interest partner.

1972, c. 23, s. 141; 1975, c. 22, s. 19; 1984, c. 15, s. 35; 1986, c. 19, s. 26; 1996, c. 39, s. 49; 2009, c. 5, s. 58; 2020, c. 16, s. 190.

2009-05-15

153. Where an amount included in computing the taxpayer’s income from a business for the year or for a preceding taxation year in respect of a property sold in the course of the business is payable to the taxpayer after the end of the year and, except where the property is real property, all or part of the amount was, at the time of the sale, not due until at least two years after that time, the taxpayer may deduct a reasonable amount as a reserve in respect of such part of the amount so included in computing his income as can reasonably be regarded as a portion of the profit from the sale.

However, no deduction is allowed to a taxpayer under this section in respect of a property sold in the course of a business if

(a)  the taxpayer, at the end of the taxation year or in the following year,

i.  is exempt from tax under this Part, or

ii.  is not resident in Canada and does not carry on the business in Canada;

(b)  the sale of the property occurred more than 36 months before the end of the year;

(c)  the purchaser of the property sold is a corporation that, immediately after the sale,

i.  is controlled, directly or indirectly, in any manner whatever, by the taxpayer,

ii.  is controlled, directly or indirectly, in any manner whatever, by a person or group of persons that controls the taxpayer, directly or indirectly, in any manner whatever, or

iii.  controls the taxpayer, directly or indirectly, in any manner whatever; or

(d)  the purchaser of the property sold is a partnership in which the taxpayer is, immediately after the sale, a majority-interest partner.

1972, c. 23, s. 141; 1975, c. 22, s. 19; 1984, c. 15, s. 35; 1986, c. 19, s. 26; 1996, c. 39, s. 49; 2009, c. 5, s. 58.

2006-03-01

153. Where an amount included in computing the taxpayer’s income from a business for the year or for a preceding taxation year in respect of a property sold in the course of the business is payable to the taxpayer after the end of the year and, except where the property is real property, all or part of the amount was, at the time of the sale, not due until at least two years after that time, the taxpayer may deduct a reasonable amount as a reserve in respect of such part of the amount so included in computing his income as can reasonably be regarded as a portion of the profit from the sale.

However, no deduction is allowed to a taxpayer under this section in respect of a property sold in the course of the business if the taxpayer, at the end of the taxation year or in the following taxation year, was exempt from tax under any provision of this Part, or was not resident in Canada and did not carry on the business in Canada, or the sale occurred more than 36 months before the end of the year.

1972, c. 23, s. 141; 1975, c. 22, s. 19; 1984, c. 15, s. 35; 1986, c. 19, s. 26; 1996, c. 39, s. 49.