I-3 - Taxation Act

Section 725.2.4 Disposition versions

2009-06-04

725.2.4. If the amount payable by an individual to acquire a security from a qualifying person under an agreement referred to in section 48 is reduced at a particular time and the conditions set out in the second paragraph are satisfied, the following rules apply:

(a)  rights (in this section referred to as the “old rights”) under the agreement immediately before the particular time are deemed to have been disposed of by the individual immediately before the particular time;

(b)  rights (in this section referred to as the “new rights”) under the agreement at the particular time are deemed to be acquired by the individual at the particular time; and

(c)  the individual is deemed to receive the new rights as consideration for the disposition of the old rights.

The conditions to which the first paragraph refers are as follows:

(a)  the individual could not, but for this section, deduct an amount under section 725.2 if the individual acquired the security under the agreement immediately after the particular time; and

(b)  the individual could deduct an amount under section 725.2 if the individual

i.  disposed of the old rights immediately before the particular time,

ii.  acquired the new rights at the particular time as consideration for the disposition of the old rights, and

iii.  acquired the security under the agreement immediately after the particular time.

2009, c. 15, s. 111.