I-3 - Taxation Act

Section 485.6 Disposition versions

2009-06-04

485.6. Where a commercial obligation issued by a debtor is settled at any time, the remaining unapplied portion of the forgiven amount at that time in respect of the obligation shall be applied, subject to the second paragraph, in such manner as is designated by the debtor in a prescribed form filed with the debtor’s fiscal return under this Part for the taxation year that includes that time, to reduce immediately after that time the following amounts:

(a)  the capital cost to the debtor of a depreciable property that is owned by the debtor immediately after that time; and

(b)  the undepreciated capital cost to the debtor of depreciable property of a prescribed class immediately after that time.

The remaining unapplied portion of the forgiven amount in respect of a commercial obligation at the time of settlement of the obligation may be applied to reduce, immediately after that time, the capital cost to the debtor of a depreciable property only to the extent that

(a)  in the case of a depreciable property of a prescribed class, the undepreciated capital cost to the debtor of depreciable property of that class at that time exceeds the aggregate of all other reductions immediately after that time to that undepreciated capital cost; and

(b)  in the case of a depreciable property other than a depreciable property of a prescribed class, the capital cost to the debtor of the property at that time exceeds the aggregate of all amounts each of which is an amount allowed to the debtor before that time in respect of the property

i.  in accordance with the method authorized under Part XVII of the regulations made under the Income Tax Act (R.S.C. 1952, c. 148), as it read on 31 December 1971, followed by the debtor under the Corporation Tax Act (R.S.Q. 1964, c. 67) or the Provincial Income Tax Act (R.S.Q. 1964, c. 69);

ii.  under section 130R223 of the Regulation respecting the Taxation Act (chapter I-3, r. 1).

1996, c. 39, s. 142; 2009, c. 15, s. 89.

2006-03-01

485.6. Where a commercial obligation issued by a debtor is settled at any time, the remaining unapplied portion of the forgiven amount at that time in respect of the obligation shall be applied, subject to the second paragraph, in such manner as is designated by the debtor in a prescribed form filed with the debtor’s fiscal return under this Part for the taxation year that includes that time, to reduce immediately after that time the following amounts:

(a)  the capital cost to the debtor of a depreciable property that is owned by the debtor immediately after that time; and

(b)  the undepreciated capital cost to the debtor of depreciable property of a prescribed class immediately after that time.

The remaining unapplied portion of the forgiven amount in respect of a commercial obligation at the time of settlement of the obligation may be applied to reduce, immediately after that time, the capital cost to the debtor of a depreciable property only to the extent that

(a)  in the case of a depreciable property of a prescribed class, the undepreciated capital cost to the debtor of depreciable property of that class at that time exceeds the aggregate of all other reductions immediately after that time to that undepreciated capital cost; and

(b)  in the case of a depreciable property other than a depreciable property of a prescribed class, the capital cost to the debtor of the property at that time exceeds the aggregate of all amounts each of which is an amount allowed to the debtor before that time in respect of the property

i.  in accordance with the method authorized under Part XVII of the regulations made under the Income Tax Act (Revised Statutes of Canada, 1952, chapter 148), as it read on 31 December 1971, followed by the debtor under the Corporation Tax Act (R.S.Q., 1964, chapter 67) or the Provincial Income Tax Act (R.S.Q., 1964, chapter 69);

ii.  under section 130R200 of the Regulation respecting the Taxation Act (R.R.Q., 1981, chapter I-3, r.1).

1996, c. 39, s. 142.