I-3 - Taxation Act

Section 238.3 Disposition versions

2006-03-01

238.3. Where at a particular time a taxpayer disposes, to a corporation that is affiliated with the taxpayer immediately after the disposition, of a share of a class of the capital stock of the corporation, other than a share that is a distress preferred share within the meaning of section 485, the following rules apply:

(a)  the taxpayer’s loss from the disposition is not allowable; and

(b)  in computing the adjusted cost base to the taxpayer after the particular time of a share of a class of the capital stock of the corporation owned by the taxpayer immediately after the particular time, the taxpayer shall add the proportion of the amount of the taxpayer’s loss from the disposition, determined without reference to this section and sections 237, 240, 241 and 288, that

i.  the fair market value, immediately after the particular time, of the share is of

ii.  the fair market value, immediately after the particular time, of all shares of the capital stock of the corporation owned by the taxpayer.

2000, c. 5, s. 64.