I-3, r. 1 - Regulation respecting the Taxation Act

Section 1r7 Disposition versions

2012-09-01

1R7. For the purposes of the definition of “lending assets” in section 1 of the Act,

(a)  a share owned by a bank is a prescribed share for a taxation year where it is a preferred share of the capital stock of a corporation that is dealing at arm’s length with the bank that may reasonably be considered to be, and is reported as, a substitute or alternative for a loan to the corporation, or another corporation with whom the corporation does not deal at arm’s length, in the bank’s annual report for the year to the Superintendent of Financial Institutions of Canada or, where the bank was throughout the year subject to the supervision of the Superintendent of Financial Institutions of Canada but was not required to file an annual report for the year with the Superintendent of Financial Institutions of Canada, in its financial statements for the year; and

(b)  a property is a prescribed property for a taxation year where

i.  the security is a mark-to-market property, within the meaning of section 851.22.1 of the Act, for the year of a financial institution within the meaning of that section,

ii.  the security is at any time in the year a property described in an inventory of a taxpayer, or

iii.  the property is a direct financing lease, or any other financing agreement, of a taxpayer that is reported as a loan in the taxpayer’s financial statements for the year, prepared in accordance with generally accepted accounting principles, provided that an amount is deductible in computing the taxpayer’s income for the year, in respect of the property that is the subject of the lease or agreement, under paragraph a of section 130 or the second paragraph of section 130.1 of the Act.

s. 1R3; O.C. 366-94, s. 1; O.C. 1707-97, s. 98; O.C. 1463-2001, s. 1; O.C. 1470-2002, s. 1; O.C. 134-2009, s. 1; O.C. 390-2012, s. 1.