Consolidated Statutes and Regulations
Consolidated Statutes
Consolidated Regulations
Annual Statutes and Regulations
Annual Statutes
Annual Regulations
Additional information
Québec Official Publisher
What’s new?
Information note
Policy of the Minister of Justice
Laws: Amendments
Laws: Provisions not in force
Laws: Provisions brought into force
Annual Statutes: PDF versions since 1996
Regulations: Amendments
Annual Regulations: PDF versions since 1996
Court Decisions
I-3 - Taxation Act
Section 742
Disposition versions
742. Subject to sections 744.4 and 744.5, a trust, other than a mutual fund trust, shall subtract from the amount of any loss, determined without reference to this section, resulting from the disposition of a share of the capital stock of a corporation that is capital property of the trust, the aggregate of
(a) the amount by which the lesser of the following amounts exceeds the amount determined under the second paragraph:
i. the aggregate of all amounts each of which is a dividend received by the trust on the share in respect of which an election was made under section 502 where section 502.0.1 does not deem the dividend to be a taxable dividend, and
ii. the amount of the loss, determined without reference to this section, reduced by the aggregate determined in the third paragraph; and
(b) the aggregate of the following amounts each of which is received on the share and designated under section 666 or 667 by the trust in respect of a beneficiary that was a corporation, partnership or trust:
i. a taxable dividend, and
ii. a life insurance capital dividend.
Where the trust referred to in the first paragraph is a succession that is the graduated rate estate of an individual, the share was acquired as a consequence of the individual’s death and the disposition of the share occurs during the trust’s first taxation year, the amount to which subparagraph a of the first paragraph refers is 1/2 of the lesser of
(a) the amount of the loss, determined without reference to this section, resulting from the disposition of the share; and
(b) the individual’s capital gain from the disposition of the share immediately before the individual’s death.
The aggregate to which subparagraph ii of subparagraph a of the first paragraph refers in respect of the trust referred to in that paragraph corresponds to the aggregate of all amounts each of which is the amount of a taxable dividend
(a) received by the trust on the share referred to in the first paragraph;
(b) received on the share referred to in the first paragraph and designated under section 666 by the trust in respect of a beneficiary who is an individual, other than a trust; or
(c) received on the share referred to in the first paragraph and designated under section 666 by the trust in respect of a beneficiary that was a corporation, a partnership or another trust, provided the dividend is a qualified dividend and the trust establishes that
i. it owned the share throughout the 365-day period that ended immediately before the disposition of the share by the trust, and
ii. the dividend was received while the trust, the beneficiary and persons not dealing at arm’s length with the beneficiary owned in total less than 5% of the issued shares of any class of the capital stock of the corporation from which the dividend was received.
742. Subject to sections 744.4 and 744.5, a trust, other than a mutual fund trust, shall subtract from the amount of any loss, determined without reference to this section, resulting from the disposition of a share of the capital stock of a corporation that is capital property of the trust, the aggregate of
(a) the amount by which the lesser of the following amounts exceeds the amount determined under the second paragraph:
i. the aggregate of all amounts each of which is a dividend received by the trust on the share in respect of which an election was made under section 502 where section 502.0.1 does not deem the dividend to be a taxable dividend, and
ii. the amount of the loss, determined without reference to this section, reduced by the aggregate determined in the third paragraph; and
(b) the aggregate of the following amounts each of which is received on the share and designated under section 666 or 667 by the trust in respect of a beneficiary that was a corporation, partnership or trust:
i. a taxable dividend, and
ii. a life insurance capital dividend.
Where the trust referred to in the first paragraph is an individual’s succession, the share was acquired as a consequence of the individual’s death and the disposition of the share occurs during the trust’s first taxation year, the amount to which subparagraph a of the first paragraph refers is 1/2 of the lesser of
(a) the amount of the loss, determined without reference to this section, resulting from the disposition of the share; and
(b) the individual’s capital gain from the disposition of the share immediately before the individual’s death.
The aggregate to which subparagraph ii of subparagraph a of the first paragraph refers in respect of the trust referred to in that paragraph corresponds to the aggregate of all amounts each of which is the amount of a taxable dividend
(a) received by the trust on the share referred to in the first paragraph;
(b) received on the share referred to in the first paragraph and designated under section 666 by the trust in respect of a beneficiary who is an individual, other than a trust; or
(c) received on the share referred to in the first paragraph and designated under section 666 by the trust in respect of a beneficiary that was a corporation, a partnership or another trust, provided the dividend is a qualified dividend and the trust establishes that
i. it owned the share throughout the 365-day period that ended immediately before the disposition of the share by the trust, and
ii. the dividend was received while the trust, the beneficiary and persons not dealing at arm’s length with the beneficiary owned in total less than 5% of the issued shares of any class of the capital stock of the corporation from which the dividend was received.
742. Subject to sections 744.4 and 744.5, a trust, other than a mutual fund trust, shall subtract from the amount of any loss, determined without reference to this section, resulting from the disposition of a share of the capital stock of a corporation that is capital property of the trust, the aggregate of
(a) the amount by which the lesser of the following amounts exceeds the amount determined under the second paragraph:
i. the aggregate of all amounts each of which is a dividend received by the trust on the share in respect of which an election was made under section 502 where section 502.0.1 does not deem the dividend to be a taxable dividend, and
ii. the amount of the loss, determined without reference to this section, reduced by the aggregate determined in the third paragraph; and
(b) the aggregate of the following amounts each of which is received on the share and designated under section 666 or 667 by the trust in respect of a beneficiary that was a corporation, partnership or trust:
i. a taxable dividend, and
ii. a life insurance capital dividend.
Where the trust referred to in the first paragraph is an individual’s succession, the share was acquired as a consequence of the individual’s death and the disposition of the share occurs during the trust’s first taxation year, the amount to which subparagraph a of the first paragraph refers is 1/2 of the lesser of
(a) the amount of the loss, determined without reference to this section, resulting from the disposition of the share; and
(b) the individual’s capital gain from the disposition of the share immediately before the individual’s death.
The aggregate to which subparagraph ii of subparagraph a of the first paragraph refers in respect of the trust referred to in that paragraph corresponds to the aggregate of all amounts each of which is the amount of a taxable dividend
(a) received by the trust on the share referred to in the first paragraph;
(b) received on the share referred to in the first paragraph and designated under section 666 by the trust in respect of a beneficiary who is an individual, other than a trust; or
(c) received on the share referred to in the first paragraph and designated under section 666 by the trust in respect of a beneficiary that was a corporation, partnership or another trust where the trust establishes that
i. it owned the share throughout the 365-day period that ended immediately before the disposition of the share by the trust, and
ii. the dividend was received while the trust, the beneficiary and persons not dealing at arm’s length with the beneficiary owned in total less than 5% of the issued shares of any class of the capital stock of the corporation from which the dividend was received.
