I-3 - Taxation Act

Section 520.1 Disposition versions

2006-03-01

520.1. Where section 518 applies in respect of the disposition of property, the prescribed form and, if the election made by the taxpayer and the corporation is the first election mentioned in that section, a copy of every document sent to the Minister of Revenue of Canada in respect of the disposition in connection with that election, shall be sent to the Minister.

The prescribed form shall also be sent to the Minister where an application is made to the Minister under the third paragraph of section 522 in respect of the disposition.

In addition, the taxpayer incurs, solidarily with the corporation, a penalty equal

(a)  where a document referred to in the first paragraph is not sent to the Minister on or before the date, referred to as the “particular date” in subparagraph i, that is the later of the earliest of the filing-due dates for the persons having made the election referred to in section 518 in respect of the disposition for the taxation year in which the disposition was made and the date of the last day of the two-month period following the end of the taxation year which, of the taxation years of those persons, ends the latest, to the lesser of

i.  0.25% of the amount by which the fair market value of the property at the time of the disposition exceeds the proceeds of disposition of the property, for each month or part of a month during the period beginning on the particular date and ending on the day on which the documents have all been sent to the Minister, and

ii.  the product obtained by multiplying $100 by the number of months each of which is a month all or part of which is during the period referred to in subparagraph i, or

(b)  where an application made to the Minister in respect of a disposition under the third paragraph of section 522 is granted by the Minister, to the lesser of the amounts that would be determined in respect of the disposition under subparagraphs i and ii of subparagraph a if the reference in subparagraph i to “the documents have all been sent to the Minister” were a reference to “the prescribed form referred to in the second paragraph is sent to the Minister”; in such case, this subparagraph is deemed not to apply in respect of any other such application made previously in respect of the disposition.

However, the total amount of the penalties that the taxpayer incurs, solidarily with the corporation, under the third paragraph in respect of the disposition may not exceed the greater of the penalties that the taxpayer would otherwise incur, solidarily with the corporation, in respect of the disposition under subparagraph a or subparagraph b of the third paragraph nor $5,000.

1997, c. 85, s. 84; 2000, c. 5, s. 293; 2000, c. 39, s. 27; 2003, c. 9, s. 33.