I-3 - Taxation Act

Section 193.2 Disposition versions

2019-06-19

193.2. Where a taxpayer that owns one emission allowance, or two or more identical emission allowances, acquires, at a particular time, one or more other emission allowances (in this section referred to as “newly-acquired emission allowances”), each of which is identical to each of the previously-acquired emission allowances, the following rules apply for the purpose of computing, at any subsequent time, the cost to the taxpayer of each of the identical emission allowances:

(a)  the taxpayer is deemed to have disposed of each of the previously-acquired emission allowances immediately before the particular time for proceeds of disposition equal to its cost to the taxpayer immediately before the particular time; and

(b)  the taxpayer is deemed to have acquired each of the identical emission allowances at the particular time at a cost equal to the amount determined by the formula

(A + B)/C.

In the formula in the first paragraph,

(a)  A is the total cost to the taxpayer immediately before the particular time of the previously-acquired emission allowances;

(b)  B is the total cost to the taxpayer (determined without reference to this division) of the newly-acquired emission allowances; and

(c)  C is the number of identical emission allowances owned by the taxpayer immediately after the particular time.

For the purposes of this section, emission allowances are considered identical if they can be used to settle the same emission obligations.

2019, c. 14, s. 90.