I-3 - Taxation Act

Section 470 Disposition versions

2009-05-15

470. In the case provided for in section 469, if the acquisition is made by a taxpayer resident in Canada and the taxpayer makes a valid election under subsection 1 of section 80.1 of the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)) after 19 December 2006 in respect of all indemnities acquired by the taxpayer, an amount, in respect of each indemnity, equal to its principal amount or, if, in accordance with paragraph d of that subsection 1, the taxpayer has designated in the election an amount in respect of the indemnity that is less than the principal amount, equal to that lesser amount, is deemed to be the cost to the taxpayer of the indemnity and, for the purpose of computing the proceeds of disposition of the foreign property, the amount received by the taxpayer because of the acquisition of the indemnity.

However, if the amount designated by the taxpayer in the election referred to in the first paragraph in respect of an indemnity is less than the principal amount of the indemnity and, but for this paragraph, the proceeds of disposition of the foreign property, computed with reference to the first paragraph, would be less than the cost amount to the taxpayer of the foreign property immediately before it was taken or sold, that cost amount is, for the purposes of the first paragraph, to be increased by the taxpayer on or before the taxpayer’s filing-due date for the taxation year in which the taxpayer acquired the indemnity or, if the taxpayer does not do so, by the Minister, so that the proceeds of disposition of the foreign property, computed with reference to the first paragraph, are equal to the cost amount to the taxpayer of the foreign property immediately before it was taken or sold.

Chapter V.2 of Title II of Book I applies in relation to an election made under subsection 1 of section 80.1 of the Income Tax Act or in relation to an election made under this section before 20 December 2006.

1973, c. 17, s. 53; 2009, c. 5, s. 159.

2006-03-01

470. In the case provided for in section 469, where the acquisition is made during a taxation year ending after 30 December 1971 by a taxpayer resident in Canada, he may elect, in prescribed form and within prescribed delay, in respect of all indemnities so acquired by him, that an amount, in respect of each such indemnity, equal to its principal or to a lesser amount, be deemed to be for him the cost of the indemnity and for the purposes of computing the proceeds of the disposition of the foreign property, the amount received by him by reason of the acquisition of the indemnity; however, such election is not valid if, when so computed, the proceeds of the disposition are less than the cost amount to the taxpayer of the foreign property immediately before it was so taken or sold.

1973, c. 17, s. 53.