I-3 - Taxation Act

Section 528 Disposition versions

2006-03-01

528. Where a taxpayer and a corporation make the election referred to in section 518 in respect of a disposition, the cost to the taxpayer of each property the taxpayer receives for the disposition is deemed to be equal

(a)  in the case of any particular property other than a share of the capital stock of the corporation or of a right to receive such share, to the lesser of the fair market value of that property at the time of disposition and the proportion of the fair market value, at the same time, of the property disposed of by the taxpayer to the corporation, that the fair market value of such particular property is of that of all such particular properties which he receives as consideration for such disposition;

(b)  in the case of a preferred share of a given class of the capital stock of the corporation, to the lesser of the fair market value of such share immediately after the disposition and that proportion of the excess of the proceeds of disposition of that property over the fair market value of the particular property contemplated in paragraph a which he receives for such disposition, that the fair market value, immediately after the disposition, of that preferred share of such class is, at the same time, of all the preferred shares of the capital stock of the corporation that he receives or has a right to receive as consideration for such disposition; and

(c)  in the case of a common share of a given class of the capital stock of the corporation, to that proportion of the excess of the proceeds of disposition of the property over the aggregate of the fair market value, at the time of disposition, of the particular property contemplated in paragraph a, that he receives for such disposition, and of the cost, to him, of all the preferred shares which he has a right to receive for such disposition, that the fair market value, immediately after the disposition, of such common share of that class is, at the same time, of the fair market value all the common shares of the capital stock of the corporation that he receives or has a right to receive as consideration for such disposition.

1972, c. 23, s. 411; 1996, c. 39, s. 148; 1997, c. 3, s. 71; 2003, c. 9, s. 37.