I-3 - Taxation Act

Section 517.4.2 Disposition versions

2006-03-01

517.4.2. The amount referred to in section 517.4.1 is equal to the aggregate of

(a)  where the share or a share for which the share was substituted was owned at the end of 1971 by the taxpayer or a person with whom the taxpayer did not deal at arm’s length, the amount by which the fair market value of the share or the share for which it was substituted, on valuation day, within the meaning of section 49 of the Act respecting the application of the Taxation Act (chapter I-4), exceeds the aggregate of

i.  the actual cost, within the meaning of section 54 of the said Act, of the share or the share for which it was substituted, on 1 January 1972, to the taxpayer or the person with whom he did not deal at arm’s length, and

ii.  all amounts each of which is an amount received by the taxpayer or the person with whom he did not deal at arm’s length after 31 December 1971 and before that time as a dividend on the share or the share for which it was substituted and in respect of which the corporation that paid the dividend has made an election under section 501, as it read in its application to a dividend that became payable before 1 January 1979;

(b)  the aggregate of all amounts each of which is an amount determined after 31 December 1984 under that part of section 234 which precedes subparagraph b of the first paragraph in respect of a previous disposition of the share or a share for which the share was substituted, or such lesser amount as is established by the taxpayer to be the amount in respect of which a deduction under sections 726.6 to 726.20 was claimed, by the taxpayer or an individual with whom the taxpayer did not deal at arm’s length.

1987, c. 67, s. 122; 1990, c. 59, s. 187; 1997, c. 3, s. 71.