I-3 - Taxation Act

Section 744.6 Disposition versions

2020-09-24

744.6. A taxpayer who disposes of a share at a particular time in a taxation year is deemed to dispose of it for the proceeds of disposition determined in the second paragraph where

(a)  the taxpayer is a financial institution in the year, the share is a mark-to-market property for the year, and the taxpayer received either a dividend on the share at a time when the taxpayer and persons with whom the taxpayer was not dealing at arm’s length held in total more than 5% of the issued shares of any class of the capital stock of the corporation that paid the dividend, or a dividend on the share paid under section 506; or

(b)  the disposition is an actual disposition, the taxpayer did not hold the share throughout the 365-day period that ended immediately before the disposition, and the share was a mark-to-market property of the taxpayer for a taxation year that begins after 31 October 1994 and in which the taxpayer was a financial institution.

Subject to section 744.7, the proceeds of disposition referred to in the first paragraph are deemed to be the amount determined by the formula

A + B − (C − D).

For the purposes of the formula in the second paragraph,

(a)  A is the taxpayer’s proceeds of disposition of the share determined without reference to this section;

(b)  B is, where the taxpayer is deemed to have received a dividend under section 508, to the extent that that section refers to section 506, in respect of the share, the aggregate determined under subparagraph ii, or, in any other case, the lesser of

i.  the loss from the disposition of the share that would be determined before the application of this section if the cost of the share to any taxpayer were determined without reference to

(1)  sections 521 to 526 and 528, where the provisions of those sections apply because of subparagraph a of the second paragraph of section 832.3, and

(2)  sections 546 and 559, subparagraph a of the second paragraph of section 832.3, paragraph b of section 851.22.15 and paragraph d of section 851.22.23, and

ii.  the aggregate of all amounts each of which is

(1)  where the taxpayer is a corporation, a taxable dividend received by the taxpayer on the share, to the extent of the amount of the dividend that was deductible under any of sections 738 to 745 and 845 in computing the taxpayer’s taxable income for any taxation year,

(2)  where the taxpayer is a partnership, a taxable dividend received by the taxpayer on the share, to the extent of the amount of the dividend that was deductible under any of sections 738 to 745, 845 and 1091 in computing the taxable income or taxable income earned in Canada for any taxation year of members of the partnership,

(3)  where the taxpayer is a trust, an amount designated under section 666 in respect of a taxable dividend on the share, or

(4)  a dividend, other than a taxable dividend, received by the taxpayer on the share;

(c)  C is the aggregate of all amounts each of which is the amount by which

i.  the taxpayer’s proceeds of disposition on a deemed disposition of the share before the particular time were increased because of this section,

ii.  where the taxpayer is a corporation or trust, a loss of the taxpayer on a deemed disposition of the share before the particular time was reduced because of section 741, 742, 743 or 744.2, or

iii.  where the taxpayer is a partnership, a loss of a member of the partnership on a deemed disposition of the share before the particular time was reduced because of section 741.2 or 743; and

(d)  D is the aggregate of all amounts each of which is the amount by which the taxpayer’s proceeds of disposition on a deemed disposition of the share before the particular time were decreased because of this section.

1996, c. 39, s. 204; 1997, c. 3, s. 71; 2001, c. 7, s. 103; 2012, c. 8, s. 110; 2015, c. 21, s. 265; 2020, c. 16, s. 100.

2015-10-21

744.6. A taxpayer who disposes of a share at a particular time in a taxation year is deemed to dispose of it for the proceeds of disposition determined in the second paragraph where

(a)  the taxpayer is a financial institution in the year, the share is a mark-to-market property for the year, and the taxpayer received either a dividend on the share at a time when the taxpayer and persons with whom the taxpayer was not dealing at arm’s length held in total more than 5% of the issued shares of any class of the capital stock of the corporation that paid the dividend, or a dividend on the share paid under section 506; or

(b)  the disposition is an actual disposition, the taxpayer did not hold the share throughout the 365-day period that ended immediately before the disposition, and the share was a mark-to-market property of the taxpayer for a taxation year that begins after 31 October 1994 and in which the taxpayer was a financial institution.

Subject to section 744.7, the proceeds of disposition referred to in the first paragraph are deemed to be the amount determined by the formula

A + B − (C − D).

For the purposes of the formula in the second paragraph,

(a)  A is the taxpayer’s proceeds of disposition of the share determined without reference to this section;

(b)  B is the lesser of

i.  the loss from the disposition of the share that would be determined before the application of this section if the cost of the share to any taxpayer were determined without reference to

(1)  sections 521 to 526 and 528, where the provisions of those sections apply because of subparagraph a of the second paragraph of section 832.3, and

(2)  sections 546 and 559, subparagraph a of the second paragraph of section 832.3, paragraph b of section 851.22.15 and paragraph d of section 851.22.23, and

ii.  the aggregate of all amounts each of which is

(1)  where the taxpayer is a corporation, a taxable dividend received by the taxpayer on the share, to the extent of the amount of the dividend that was deductible under any of sections 738 to 745 and 845 in computing the taxpayer’s taxable income for any taxation year,

(2)  where the taxpayer is a partnership, a taxable dividend received by the taxpayer on the share, to the extent of the amount of the dividend that was deductible under any of sections 738 to 745, 845 and 1091 in computing the taxable income or taxable income earned in Canada for any taxation year of members of the partnership,

(3)  where the taxpayer is a trust, an amount designated under section 666 in respect of a taxable dividend on the share, or

(4)  a dividend, other than a taxable dividend, received by the taxpayer on the share;

(c)  C is the aggregate of all amounts each of which is the amount by which

i.  the taxpayer’s proceeds of disposition on a deemed disposition of the share before the particular time were increased because of this section,

ii.  where the taxpayer is a corporation or trust, a loss of the taxpayer on a deemed disposition of the share before the particular time was reduced because of section 741, 742, 743 or 744.2, or

iii.  where the taxpayer is a partnership, a loss of a member of the partnership on a deemed disposition of the share before the particular time was reduced because of the second paragraph of section 741 or section 744.1;

(d)  D is the aggregate of all amounts each of which is the amount by which the taxpayer’s proceeds of disposition on a deemed disposition of the share before the particular time were decreased because of this section.

1996, c. 39, s. 204; 1997, c. 3, s. 71; 2001, c. 7, s. 103; 2012, c. 8, s. 110; 2015, c. 21, s. 265.

2012-05-09

744.6. A taxpayer who disposes of a share at a particular time in a taxation year is deemed to dispose of it for the proceeds of disposition determined in the second paragraph where

(a)  the taxpayer is a financial institution in the year, the share is a mark-to-market property for the year, and the taxpayer received either a dividend on the share at a time when the taxpayer and persons with whom the taxpayer was not dealing at arm’s length held in total more than 5% of the issued shares of any class of the capital stock of the corporation that paid the dividend, or a dividend on the share paid under section 506; or

(b)  the disposition is an actual disposition, the taxpayer did not hold the share throughout the 365-day period that ended immediately before the disposition, and the share was a mark-to-market property of the taxpayer for a taxation year that begins after 31 October 1994 and in which the taxpayer was a financial institution.

Subject to section 744.7, the proceeds of disposition referred to in the first paragraph are deemed to be the amount determined by the formula

A + B − (C − D).

For the purposes of the formula in the second paragraph,

(a)  A is the taxpayer’s proceeds of disposition of the share determined without reference to this section;

(b)  B is the lesser of

i.  the loss from the disposition of the share that would be determined before the application of this section if the cost of the share to any taxpayer were determined without reference to

(1)  sections 521 to 526 and 528, where the provisions of those sections apply because of subparagraph a of the second paragraph of section 832.3, and

(2)  sections 546 and 559, subparagraph a of the second paragraph of section 832.3, paragraph b of section 851.22.15 and paragraph d of section 851.22.23, and

ii.  the aggregate of all amounts each of which is

(1)  where the taxpayer is a corporation, a taxable dividend received by the taxpayer on the share, to the extent of the amount of the dividend that was deductible under any of sections 738 to 745, 845 and 1091 in computing the taxpayer’s taxable income or taxable income earned in Canada for any taxation year,

(2)  where the taxpayer is a partnership, a taxable dividend received by the taxpayer on the share, to the extent of the amount of the dividend that was deductible under any of sections 738 to 745, 845 and 1091 in computing the taxable income or taxable income earned in Canada for any taxation year of members of the partnership,

(3)  where the taxpayer is a trust, an amount designated under section 666 in respect of a taxable dividend on the share, or

(4)  a dividend, other than a taxable dividend, received by the taxpayer on the share;

(c)  C is the aggregate of all amounts each of which is the amount by which

i.  the taxpayer’s proceeds of disposition on a deemed disposition of the share before the particular time were increased because of this section,

ii.  where the taxpayer is a corporation or trust, a loss of the taxpayer on a deemed disposition of the share before the particular time was reduced because of section 741, 742, 743 or 744.2, or

iii.  where the taxpayer is a partnership, a loss of a member of the partnership on a deemed disposition of the share before the particular time was reduced because of the second paragraph of section 741 or section 744.1;

(d)  D is the aggregate of all amounts each of which is the amount by which the taxpayer’s proceeds of disposition on a deemed disposition of the share before the particular time were decreased because of this section.

1996, c. 39, s. 204; 1997, c. 3, s. 71; 2001, c. 7, s. 103; 2012, c. 8, s. 110.

2006-03-01

744.6. A taxpayer who disposes of a share at a particular time in a taxation year is deemed to dispose of it for the proceeds of disposition determined in the second paragraph where

(a)  the taxpayer is a financial institution in the year, the share is a mark-to-market property for the year, and the taxpayer received a dividend on the share at a time when the taxpayer and persons with whom the taxpayer was not dealing at arm’s length held in total more than 5% of the issued shares of any class of the capital stock of the corporation that paid the dividend; or

(b)  the disposition is an actual disposition, the taxpayer did not hold the share throughout the 365-day period that ended immediately before the disposition, and the share was a mark-to-market property of the taxpayer for a taxation year that begins after 31 October 1994 and in which the taxpayer was a financial institution.

Subject to section 744.7, the proceeds of disposition referred to in the first paragraph are deemed to be the amount determined by the formula

A + B − (C − D).

For the purposes of the formula in the second paragraph,

(a)  A is the taxpayer’s proceeds of disposition of the share determined without reference to this section;

(b)  B is the lesser of

i.  the loss from the disposition of the share that would be determined before the application of this section if the cost of the share to any taxpayer were determined without reference to

(1)  sections 521 to 526 and 528, where the provisions of those sections apply because of subparagraph a of the second paragraph of section 832.3, and

(2)  sections 546 and 559, subparagraph a of the second paragraph of section 832.3, paragraph b of section 851.22.15 and paragraph d of section 851.22.23, and

ii.  the aggregate of all amounts each of which is

(1)  where the taxpayer is a corporation, a taxable dividend received by the taxpayer on the share, to the extent of the amount of the dividend that was deductible under any of sections 738 to 745, 845 and 1091 in computing the taxpayer’s taxable income or taxable income earned in Canada for any taxation year,

(2)  where the taxpayer is a partnership, a taxable dividend received by the taxpayer on the share, to the extent of the amount of the dividend that was deductible under any of sections 738 to 745, 845 and 1091 in computing the taxable income or taxable income earned in Canada for any taxation year of members of the partnership,

(3)  where the taxpayer is a trust, an amount designated under section 666 in respect of a taxable dividend on the share, or

(4)  a dividend, other than a taxable dividend, received by the taxpayer on the share;

(c)  C is the aggregate of all amounts each of which is the amount by which

i.  the taxpayer’s proceeds of disposition on a deemed disposition of the share before the particular time were increased because of this section,

ii.  where the taxpayer is a corporation or trust, a loss of the taxpayer on a deemed disposition of the share before the particular time was reduced because of section 741, 742, 743 or 744.2, or

iii.  where the taxpayer is a partnership, a loss of a member of the partnership on a deemed disposition of the share before the particular time was reduced because of the second paragraph of section 741 or section 744.1;

(d)  D is the aggregate of all amounts each of which is the amount by which the taxpayer’s proceeds of disposition on a deemed disposition of the share before the particular time were decreased because of this section.

1996, c. 39, s. 204; 1997, c. 3, s. 71; 2001, c. 7, s. 103.