I-3 - Taxation Act

Section 257 Disposition versions

2020-09-24

257. A taxpayer shall, in computing the adjusted cost base of a property at a particular time, deduct the following amounts:

MISCELLANEOUS CASES

(a)  in the case of a property which the taxpayer disposed of in part after 1971 and before the particular time, the amount established under section 254 for such taxpayer;

(b)  where sections 485 to 485.18 apply, the amount by which the adjusted cost base is required to be reduced before the particular time;

(b.1)  any amount required under paragraph c of section 259, paragraph a of any of sections 259.1 to 259.3 and 296.1, subparagraph b.1 of the first paragraph of section 301, subparagraph a of the first paragraph of section 543.2 or paragraph a of section 553.2 to be deducted in computing the adjusted cost base of the property or any amount by which that adjusted cost base is required to be reduced because of any of sections 485.9 to 485.11;

(c)  that part of the cost of the property which is deductible in computing the income, otherwise than because of this Title or of section 75.2.1 or 75.3, for any taxation year beginning before the particular time and ending after 31 December 1971;

(d)  where the property is acquired by the taxpayer after 31 December 1971, the aggregate of

i.  the amount by which any assistance, other than prescribed assistance, that the taxpayer has received or is entitled to receive before the particular time from a government, municipality or other public authority in respect of, or for the acquisition of, the property, whether as a grant, subsidy, forgivable loan, deduction from tax not otherwise provided for under this paragraph, investment allowance or as any other form of assistance, exceeds such part of the assistance as has been repaid by the taxpayer before that time in accordance with an obligation to repay all or any part of that assistance, and

ii.  the amounts, other than a prescribed amount, deducted by the taxpayer in respect of the property before the particular time under subsection 5 or 6 of section 127 of the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)) in computing his tax payable under the said Act;

(e)  where the property was received as consideration for a payment or loan referred to in section 383, as it read in respect of the payment or loan, which the taxpayer made or consented to before 20 April 1983 to a joint exploration corporation, within the meaning of section 382, as a shareholder corporation of such a corporation, in respect of Canadian exploration and development expenses, Canadian exploration expenses, Canadian development expenses or Canadian oil and gas property expenses incurred by the joint exploration corporation, or where the property was substituted for such a property, such portion of the payment or loan as may reasonably be considered to relate to an agreed portion referred to in section 381, 406, 417 or 418.13, as it read in respect of the agreed portion;

(f)  where the property is an indemnity within the meaning of sections 469 to 479, or is deemed to be such an indemnity under those sections, the amount required by subparagraph b of the first paragraph of section 471 to be deducted;

(f.1)  where the property is a debt owing to the taxpayer by a corporation, the amount required by section 511, or sections 517.1 to 517.6 as they applied before 23 May 1985, to be deducted before the particular time in computing the adjusted cost base of that debt;

(f.2)  the amount by which the amount elected by the taxpayer before the particular time under section 257.2 exceeds any repayment before that time by the taxpayer of an amount received by him as described in section 257.2 that may reasonably be considered to relate to the amount elected where the repayment is made pursuant to a legal obligation to repay all or any part of the amount so received;

(f.3)  where the property is property of a taxpayer that was subject to a loss restriction event at or before that time, any amount required by subparagraph a of the second paragraph of section 736 to be deducted in computing the adjusted cost base of the property;

(f.4)  where the property is a right to acquire a share of the capital stock of a corporation or a unit of a mutual fund trust under an agreement, any amount required by paragraph b of section 1055.1 to be deducted;

(f.5)  where the property was at the end of 22 February 1994 a non-qualifying immovable property of the taxpayer within the meaning assigned by section 726.6.1 as that section applies to the taxation year 1994, any amount required by paragraph b of section 726.9.4 to be deducted in computing the adjusted cost base to the taxpayer of the property;

(f.6)  where the taxpayer elected under section 726.9.2 in respect of the property, any amount required by section 726.9.5 to be deducted in computing the adjusted cost base to the taxpayer of the property at the particular time;

(f.7)  where the property was acquired under a derivative forward agreement, any amount deductible in respect of the property under section 157.2.2 in computing the taxpayer’s income for a taxation year;

(f.8)  where the property is disposed of under a derivative forward agreement, any amount deductible in respect of the property under section 157.2.2 in computing the taxpayer’s income for the taxation year that includes the particular time;

SHARES OF A CORPORATION

(g)  where the property is a share of the capital stock of a corporation resident in Canada,

i.  any amount received by the taxpayer after 31 December 1971 and before the particular time as a dividend other than a taxable dividend or a dividend in respect of which the corporation has elected in accordance with section 502 or 502.1 and section 503 in respect of the full amount thereof,

ii.  any amount required by sections 517.1 to 517.6, as they applied before 23 May 1985, to be deducted before the particular time in computing the adjusted cost base of that share,

iii.  any amount received by the taxpayer after 1971 and before the particular time on a reduction of the paid-up capital of the corporation in respect of that share, except to the extent that that amount is deemed by section 508 to be a dividend received by him,

iv.  any amount, to the extent that such amount is not proceeds of disposition of a share, received by the taxpayer before that particular time that would, but for section 510.1, be deemed by section 508 to be a dividend received by him, and

v.  any amount required by section 280.6 to be deducted in computing the adjusted cost base to the taxpayer of the share;

(h)  where the property is a share of the capital stock of a joint exploration corporation, within the meaning of section 382, resident in Canada to which the taxpayer has, after 31 December 1971, made a contribution of capital otherwise than by way of a loan, which contribution was included in computing the adjusted cost base of the property by virtue of paragraph e of section 255, such portion of the contribution as may reasonably be considered to be part of an agreed portion referred to in section 381, 406, 417 or 418.13, as it read in respect of the agreed portion;

(h.1)  any amount required by section 419.2 to be deducted before that time in computing the adjusted cost base of the property;

(i)  where the property is a share, or a right in or to a share, of the capital stock of a corporation acquired before 1 August 1976, an amount equal to the expenses incurred by the taxpayer as consideration to acquire the property, to the extent that such expenses are for the taxpayer Canadian exploration and development expenses under paragraph e of section 364, Canadian exploration expenses under paragraph e of section 395, Canadian development expenses under paragraph e of section 408 or Canadian oil and gas property expenses under paragraph c of section 418.2;

(j)  where the property is a share of the capital stock of a corporation not resident in Canada,

i.  if the corporation is a foreign affiliate of the taxpayer,

(1)  any amount required by subparagraph d of the first paragraph of section 477 or sections 585 to 588 to be deducted in computing the adjusted cost base to the taxpayer of the share, and

(2)  any amount received by the taxpayer before that time, on a reduction of the paid-up capital of the corporation in respect of the share, that is so received after 31 December 1971 and before 20 August 2011, or, where the reduction is a qualifying return of capital, within the meaning of section 577.3, in respect of the share, after 19 August 2011, or

ii.  in any other case, any amount received by the taxpayer after 31 December 1971 and before that time on a reduction of the paid-up capital of the corporation in respect of the share;

(j.1)  (paragraph repealed);

DEBT OBLIGATIONS

(k)  where the property is a debt obligation, any amount that was deductible by virtue of sections 167 and 168 for any taxation year commencing before that particular time;

INDEXED DEBT OBLIGATIONS

(k.1)  where the property is an indexed debt obligation,

i.  any amount referred to in paragraph b of section 125.0.1 in respect of the obligation and deductible in computing the income of the taxpayer for a taxation year beginning before the particular time, and

ii.  the amount of any payment that was received or that became receivable by the taxpayer at or before the particular time in respect of an amount that was added under paragraph h.0.1 of section 255 to the cost to the taxpayer of the obligation;

PARTNERSHIP

(l)  when the property is an interest in a partnership,

i.  subject to section 257.2.1, an amount in respect of each fiscal period of the partnership ending after 31 December 1971 and before the particular time, equal to the taxpayer’s share, other than a share under an agreement referred to in section 608, of any loss of the partnership from any source for that fiscal period, computed as if this Part were construed without reference to

(1)  the fraction “1/2” in section 105, as it applied to each fiscal period of the partnership ending before 1 April 1977, and without reference to that or another fraction in sections 107 and 231,

(2)  the reference to the fraction and the letter C in the formula provided for in the first paragraph of section 105.2, and

(3)  paragraph z.4 of section 87, sections 89 to 91 and 144, section 144.1, as it read before being repealed, section 145, paragraph j of section 157, as it read before being struck out, sections 205 to 207, 235, 236.2 to 241, 264, 271, 273, 288 and 293, Division XV of Chapter IV, section 425, paragraphs g and h of section 489, as they read before being struck out, sections 638.1, 741.2 and 743, section 744.1, as it applied to dispositions of property that occurred before 27 April 1995, and section 744.6,

i.1.  an amount in respect of each fiscal period of the partnership ending before the particular time that is the taxpayer’s limited partnership loss in respect of the partnership for the taxation year in which that fiscal period ends to the extent that such loss was deducted by the taxpayer in computing his taxable income for any taxation year that commenced before the particular time,

i.2.  any amount deemed by section 261.2 to be a loss of the taxpayer,

i.3.  where at the particular time the property is not a tax shelter investment as defined in section 851.38 and the taxpayer would be a member described in section 261.1 of the partnership if the fiscal period of the partnership that includes that time ended at that time, the unpaid principal amount of any indebtedness of the taxpayer for which recourse is limited, either immediately or in the future and either absolutely or contingently, and that may reasonably be considered to have been used to acquire the property,

i.4.  unless the particular time immediately precedes a disposition of the interest, if the taxpayer is a member of the partnership and the taxpayer has been a specified member of the partnership at all times since becoming a member of the partnership, or the taxpayer is at the particular time a limited partner of the partnership for the purposes of section 261.1,

(1)  where the particular time is in the taxpayer’s first taxation year for which the taxpayer is eligible to deduct an amount in respect of the partnership under section 217.27, the portion of the amount deducted in computing the taxpayer’s income for the taxation year under section 217.27 in respect of the partnership that would be deductible if the definition of “qualifying transitional income” in the first paragraph of section 217.18 were read without reference to its paragraph b, and

(2)  where the particular time is in any other taxation year, the portion of the amount deducted under section 217.27 in computing the taxpayer’s income for the taxation year preceding that other taxation year in respect of the partnership that would be deductible if the definition of “qualifying transitional income” in the first paragraph of section 217.18 were read without reference to its paragraph b,

ii.  an amount with respect to each fiscal period of the partnership ending after 31 December 1971 and before the particular time, except a fiscal period subsequent to that in which the taxpayer ceased to be a member of the partnership, equal to the share of the taxpayer in the aggregate of Canadian exploration and development expenses, foreign resource pool expenses, Canadian exploration expenses, Canadian development expenses and Canadian oil and gas property expenses incurred by the partnership in the fiscal period and the amounts which, but for paragraph d of section 600, would be deductible in computing the income of the partnership for the fiscal period under the Act respecting the application of the Taxation Act (chapter I-4) in respect of exploration and development expenses,

ii.1.  where the taxpayer is a corporation or an individual, an amount in respect of each fiscal period of the partnership ending before the particular time, other than a fiscal period subsequent to that in which the taxpayer ceased to be a member of the partnership, equal to the taxpayer’s share of the aggregate of all amounts each of which would, but for section 134.2, be deductible in computing the partnership’s income for the fiscal period as dues described in subparagraph a or b of the first paragraph of that section or as a contribution described in subparagraph c of that paragraph,

iii.  any amount deemed, under section 714 or 752.0.10.11, to be the eligible amount of a gift made by the taxpayer as a member of the partnership at the end of any fiscal period of the partnership ending before that time, or in relation to another partnership of which the taxpayer is deemed to be a member under section 693.2 or the second paragraph of section 752.0.10.11 because the taxpayer is a member of the partnership at the end of such a fiscal period,

iv.  every amount received by the taxpayer, after 1971 and before the particular time, as a payment or distribution of his share in the profits or capital of the partnership other than a share under an agreement referred to in section 608,

v.  any amount required by sections 614 to 617 to be deducted before that particular time in computing the adjusted cost base to him of his interest in the partnership,

vi.  an amount equal to that portion of all prescribed amounts deducted in computing the tax otherwise payable by the taxpayer under a prescribed Act for his taxation years ending before that particular time that may reasonably be attributed to amounts added in respect of the partnership under a prescribed provision of the said Act in computing a prescribed amount relating to the taxpayer,

vii.  any amount added pursuant to subsection 4 of section 127.2 of the Income Tax Act in computing his share purchase tax credit for a taxation year ending before or after that time,

viii.  an amount equal to 50% of the amount deemed to be designated pursuant to subsection 4 of section 127.3 of the Income Tax Act before that time in respect of each share, debt obligation or right acquired by the partnership and deemed to have been acquired by the taxpayer under that subsection,

ix.  an amount equal to the amount of all assistance received by the taxpayer before that time that has resulted in a reduction of the capital cost of a depreciable property to the partnership by virtue of section 101.4,

x.  any amount deductible by the taxpayer under section 147.2 or 176.3 in respect of the partnership for a taxation year of the taxpayer ending at or after that time,

xi.  any amount added, before the particular time, to the issue base relating to certain issue expenses, within the meaning of section 726.4.17.11, of the taxpayer and determined by reference to an amount included in an amount referred to in subparagraph ii in respect of the taxpayer regarding the partnership, and

xii.  any amount required by subparagraph b of the first paragraph of section 726.9.6 to be deducted at that time in computing the adjusted cost base to the taxpayer of the interest;

(m)  where the property is an interest in a partnership to which section 636 or 645 applies, any amount received by the taxpayer in full or partial satisfaction of that interest;

TRUST

(n)  where the property is a capital interest of the taxpayer in a trust, other than an interest in a personal trust that has never been acquired for consideration or an interest in a trust referred to in subparagraphs a to d of the third paragraph of section 647,

i.  any amount, to the extent that it has become payable before 1 January 1988, paid to the taxpayer by the trust after 31 December 1971 and before the particular time as payment or distribution of capital, otherwise than as proceeds of disposition of the interest or part thereof,

i.1.  any amount that has become payable by the trust to the taxpayer after 31 December 1987 and before the particular time in respect of the interest, otherwise than as proceeds of disposition of the interest or part thereof, except that portion of the amount

(1)  that was included in computing the taxpayer’s income under section 663,

(1.1)  that is deemed to be a dividend received by the taxpayer under section 663.4,

(2)  from which tax was deducted under Part XIII of the Income Tax Act by reason of paragraph c of subsection 1 of section 212 of the said Act, or

(3)  where the trust was resident in Canada throughout its taxation year in which the amount became payable, that was designated by the trust to be payable to the taxpayer under section 667, that is, subject to section 257.4, equal to the amount designated by the trust to be payable to the taxpayer under section 668 or that is an assessable distribution, within the meaning of subsection 1 of section 218.3 of the Income Tax Act, to the taxpayer,

ii.  an amount equal to that portion of all prescribed amounts deducted in computing the tax payable by the taxpayer under a prescribed Act for his taxation years ending before the particular time that may reasonably be attributed to amounts added in respect of the trust under a prescribed provision of the said Act in computing a prescribed amount relating to the taxpayer,

iii.  any amount added pursuant to subsection 3 of section 127.2 of the Income Tax Act in computing his share purchase tax credit for a taxation year ending before or after that time,

iv.  an amount equal to 50% of the amount deemed to be designated pursuant to subsection 3 of section 127.3 of the Income Tax Act before that time in respect of each share, debt obligation or right acquired by the trust and deemed to have been acquired by the taxpayer under that subsection, and

v.  an amount equal to the amount of all assistance received by the taxpayer before that time that has resulted in a reduction of the capital cost of a depreciable property to the trust by virtue of section 101.4;

(o)  where the property is a capital interest in a trust not resident in Canada which the taxpayer purchased after 31 December 1971 and before the particular time from a person not resident in Canada, at a time, in this paragraph referred to as the “acquisition time”, when the property was not taxable Canadian property and the fair market value of the trust property referred to in section 258 was not less than 50% of the fair market value of all the trust property, the proportion of the amount by which such value of the property referred to in that section at the acquisition time exceeds the cost amounts to the trust at the acquisition time of the property that

i.  except where subparagraph ii applies, the fair market value at the acquisition time of the interest is of the fair market value at the acquisition time of all capital interests in the trust, or

ii.  in the case of a unit of a unit trust, the fair market value at the acquisition time of the unit is of the fair market value at the acquisition time of all the issued units of the trust;

(p)  where the property is a capital interest in a trust, any amount that is deducted under section 581 or 583 in computing the taxpayer’s income for a taxation year that ends at or before the particular time, in respect of the interest, or that could have been so deducted for such a taxation year but for sections 316.1, 456 to 458, 462.1 to 462.24.1 and 466 to 467.1;

(p.1)  where the property is a capital interest of the taxpayer in a designated trust, within the meaning of the first paragraph of section 671.5, the aggregate of all amounts each of which is an amount deducted, in respect of that interest, under section 772.15 in computing the tax payable under this Part by the taxpayer or, where the taxpayer is a partnership, by a member of the partnership, for a taxation year that ended before the particular time;

(q)  where the property is an interest in a segregated fund trust referred to in section 851.2:

i.  each amount in respect of that interest that is a capital loss deemed, under section 851.21, to have been allocated to the taxpayer before the particular time, and

ii.  each amount in respect of that interest that before the particular time was deemed by section 851.16 to have been a capital loss of the taxpayer;

(r)  (paragraph repealed).

1972, c. 23, s. 238; 1973, c. 17, s. 24; 1974, c. 18, s. 14; 1975, c. 22, s. 44; 1977, c. 26, s. 25; 1978, c. 26, s. 44; 1982, c. 5, s. 59; 1984, c. 15, s. 63; 1985, c. 25, s. 46; 1986, c. 19, s. 43; 1987, c. 67, s. 65; 1988, c. 4, s. 29; 1989, c. 77, s. 24; 1990, c. 59, s. 120; 1992, c. 1, s. 29; 1993, c. 16, s. 114; 1993, c. 64, s. 25; 1994, c. 22, s. 124; 1996, c. 39, s. 73; 1997, c. 3, s. 71; 1997, c. 14, s. 55; 1997, c. 31, s. 39; 1998, c. 16, s. 105; 2001, c. 7, s. 32; 2001, c. 53, s. 48; 2003, c. 2, s. 88; 2004, c. 8, s. 50; 2004, c. 21, s. 69; 2006, c. 13, s. 34; 2007, c. 12, s. 45; 2009, c. 5, s. 88; 2009, c. 15, s. 68; 2011, c. 6, s. 123; 2013, c. 10, s. 22; 2015, c. 21, s. 148; 2015, c. 24, s. 54; 2015, c. 36, s. 16; 2017, c. 1, s. 111; 2020, c. 16, s. 51.

2017-02-08

257. A taxpayer shall, in computing the adjusted cost base of a property at a particular time, deduct the following amounts:

MISCELLANEOUS CASES

(a)  in the case of a property which the taxpayer disposed of in part after 1971 and before the particular time, the amount established under section 254 for such taxpayer;

(b)  where sections 485 to 485.18 apply, the amount by which the adjusted cost base is required to be reduced before the particular time;

(b.1)  any amount required under paragraph c of section 259, paragraph a of any of sections 259.1 to 259.3 and 296.1, subparagraph b.1 of the first paragraph of section 301, subparagraph a of the first paragraph of section 543.2 or paragraph a of section 553.2 to be deducted in computing the adjusted cost base of the property or any amount by which that adjusted cost base is required to be reduced because of any of sections 485.9 to 485.11;

(c)  that part of the cost of the property which is deductible in computing the income, otherwise than because of this Title or of section 75.2.1 or 75.3, for any taxation year beginning before the particular time and ending after 31 December 1971;

(d)  where the property is acquired by the taxpayer after 31 December 1971, the aggregate of

i.  the amount by which any assistance, other than prescribed assistance, that the taxpayer has received or is entitled to receive before the particular time from a government, municipality or other public authority in respect of, or for the acquisition of, the property, whether as a grant, subsidy, forgivable loan, deduction from tax not otherwise provided for under this paragraph, investment allowance or as any other form of assistance, exceeds such part of the assistance as has been repaid by the taxpayer before that time in accordance with an obligation to repay all or any part of that assistance, and

ii.  the amounts, other than a prescribed amount, deducted by the taxpayer in respect of the property before the particular time under subsection 5 or 6 of section 127 of the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)) in computing his tax payable under the said Act;

(e)  where the property was received as consideration for a payment or loan referred to in section 383, as it read in respect of the payment or loan, which the taxpayer made or consented to before 20 April 1983 to a joint exploration corporation, within the meaning of section 382, as a shareholder corporation of such a corporation, in respect of Canadian exploration and development expenses, Canadian exploration expenses, Canadian development expenses or Canadian oil and gas property expenses incurred by the joint exploration corporation, or where the property was substituted for such a property, such portion of the payment or loan as may reasonably be considered to relate to an agreed portion referred to in section 381, 406, 417 or 418.13, as it read in respect of the agreed portion;

(f)  where the property is an indemnity within the meaning of sections 469 to 479, or is deemed to be such an indemnity under those sections, the amount required by subparagraph b of the first paragraph of section 471 to be deducted;

(f.1)  where the property is a debt owing to the taxpayer by a corporation, the amount required by section 511, or sections 517.1 to 517.6 as they applied before 23 May 1985, to be deducted before the particular time in computing the adjusted cost base of that debt;

(f.2)  the amount by which the amount elected by the taxpayer before the particular time under section 257.2 exceeds any repayment before that time by the taxpayer of an amount received by him as described in section 257.2 that may reasonably be considered to relate to the amount elected where the repayment is made pursuant to a legal obligation to repay all or any part of the amount so received;

(f.3)  where the property is property of a taxpayer that was subject to a loss restriction event at or before that time, any amount required by subparagraph a of the second paragraph of section 736 to be deducted in computing the adjusted cost base of the property;

(f.4)  where the property is a right to acquire a share of the capital stock of a corporation or a unit of a mutual fund trust under an agreement, any amount required by paragraph b of section 1055.1 to be deducted;

(f.5)  where the property was at the end of 22 February 1994 a non-qualifying immovable property of the taxpayer within the meaning assigned by section 726.6.1 as that section applies to the taxation year 1994, any amount required by paragraph b of section 726.9.4 to be deducted in computing the adjusted cost base to the taxpayer of the property;

(f.6)  where the taxpayer elected under section 726.9.2 in respect of the property, any amount required by section 726.9.5 to be deducted in computing the adjusted cost base to the taxpayer of the property at the particular time;

(f.7)  where the property was acquired under a derivative forward agreement, any amount deductible in respect of the property under section 157.2.2 in computing the taxpayer’s income for a taxation year;

(f.8)  where the property is disposed of under a derivative forward agreement, any amount deductible in respect of the property under section 157.2.2 in computing the taxpayer’s income for the taxation year that includes the particular time;

SHARES OF A CORPORATION

(g)  where the property is a share of the capital stock of a corporation resident in Canada,

i.  any amount received by the taxpayer after 31 December 1971 and before the particular time as a dividend other than a taxable dividend or a dividend in respect of which the corporation has elected in accordance with section 502 or 502.1 and section 503 in respect of the full amount thereof,

ii.  any amount required by sections 517.1 to 517.6, as they applied before 23 May 1985, to be deducted before the particular time in computing the adjusted cost base of that share,

iii.  any amount received by the taxpayer after 1971 and before the particular time on a reduction of the paid-up capital of the corporation in respect of that share, except to the extent that that amount is deemed by section 508 to be a dividend received by him,

iv.  any amount, to the extent that such amount is not proceeds of disposition of a share, received by the taxpayer before that particular time that would, but for section 510.1, be deemed by section 508 to be a dividend received by him, and

v.  any amount required by section 280.6 to be deducted in computing the adjusted cost base to the taxpayer of the share;

(h)  where the property is a share of the capital stock of a joint exploration corporation, within the meaning of section 382, resident in Canada to which the taxpayer has, after 31 December 1971, made a contribution of capital otherwise than by way of a loan, which contribution was included in computing the adjusted cost base of the property by virtue of paragraph e of section 255, such portion of the contribution as may reasonably be considered to be part of an agreed portion referred to in section 381, 406, 417 or 418.13, as it read in respect of the agreed portion;

(h.1)  any amount required by section 419.2 to be deducted before that time in computing the adjusted cost base of the property;

(i)  where the property is a share, or an interest therein or a right thereto, of the capital stock of a corporation acquired before 1 August 1976, an amount equal to the expenses incurred by the taxpayer as consideration to acquire the property, to the extent that such expenses are for him Canadian exploration and development expenses under paragraph e of section 364, Canadian exploration expenses under paragraph e of section 395, Canadian development expenses under paragraph e of section 408 or Canadian oil and gas property expenses under paragraph c of section 418.2;

(j)  where the property is a share of the capital stock of a corporation not resident in Canada,

i.  if the corporation is a foreign affiliate of the taxpayer,

(1)  any amount required by subparagraph d of the first paragraph of section 477 or sections 585 to 588 to be deducted in computing the adjusted cost base to the taxpayer of the share, and

(2)  any amount received by the taxpayer before that time, on a reduction of the paid-up capital of the corporation in respect of the share, that is so received after 31 December 1971 and before 20 August 2011, or, where the reduction is a qualifying return of capital, within the meaning of section 577.3, in respect of the share, after 19 August 2011, or

ii.  in any other case, any amount received by the taxpayer after 31 December 1971 and before that time on a reduction of the paid-up capital of the corporation in respect of the share;

(j.1)  (paragraph repealed);

DEBT OBLIGATIONS

(k)  where the property is a debt obligation, any amount that was deductible by virtue of sections 167 and 168 for any taxation year commencing before that particular time;

INDEXED DEBT OBLIGATIONS

(k.1)  where the property is an indexed debt obligation,

i.  any amount referred to in paragraph b of section 125.0.1 in respect of the obligation and deductible in computing the income of the taxpayer for a taxation year beginning before the particular time, and

ii.  the amount of any payment that was received or that became receivable by the taxpayer at or before the particular time in respect of an amount that was added under paragraph h.0.1 of section 255 to the cost to the taxpayer of the obligation;

PARTNERSHIP

(l)  when the property is an interest in a partnership,

i.  subject to section 257.2.1, an amount in respect of each fiscal period of the partnership ending after 31 December 1971 and before the particular time, equal to the taxpayer’s share, other than a share under an agreement referred to in section 608, of any loss of the partnership from any source for that fiscal period, computed as if this Part were construed without reference to

(1)  the fraction “1/2” in section 105, as it applied to each fiscal period of the partnership ending before 1 April 1977, and without reference to that or another fraction in sections 107 and 231,

(2)  the reference to the fraction and the letter C in the formula provided for in the first paragraph of section 105.2, and

(3)  paragraph z.4 of section 87, sections 89 to 91, 144, 144.1, 145, 205 to 207, 235, 236.2 to 241, 264, 271, 273, 288, 293, 425, 638.1, 741.2 and 744.1, as it applied to dispositions of property that occurred before 27 April 1995, paragraph j of section 157, as it read before being struck out, Division XV of Chapter IV and paragraphs g and h of section 489, as they read before being struck out,

i.1.  an amount in respect of each fiscal period of the partnership ending before the particular time that is the taxpayer’s limited partnership loss in respect of the partnership for the taxation year in which that fiscal period ends to the extent that such loss was deducted by the taxpayer in computing his taxable income for any taxation year that commenced before the particular time,

i.2.  any amount deemed by section 261.2 to be a loss of the taxpayer,

i.3.  where at the particular time the property is not a tax shelter investment as defined in section 851.38 and the taxpayer would be a member described in section 261.1 of the partnership if the fiscal period of the partnership that includes that time ended at that time, the unpaid principal amount of any indebtedness of the taxpayer for which recourse is limited, either immediately or in the future and either absolutely or contingently, and that may reasonably be considered to have been used to acquire the property,

i.4.  unless the particular time immediately precedes a disposition of the interest, if the taxpayer is a member of the partnership and the taxpayer has been a specified member of the partnership at all times since becoming a member of the partnership, or the taxpayer is at the particular time a limited partner of the partnership for the purposes of section 261.1,

(1)  where the particular time is in the taxpayer’s first taxation year for which the taxpayer is eligible to deduct an amount in respect of the partnership under section 217.27, the portion of the amount deducted in computing the taxpayer’s income for the taxation year under section 217.27 in respect of the partnership that would be deductible if the definition of “qualifying transitional income” in the first paragraph of section 217.18 were read without reference to its paragraph b, and

(2)  where the particular time is in any other taxation year, the portion of the amount deducted under section 217.27 in computing the taxpayer’s income for the taxation year preceding that other taxation year in respect of the partnership that would be deductible if the definition of “qualifying transitional income” in the first paragraph of section 217.18 were read without reference to its paragraph b,

ii.  an amount with respect to each fiscal period of the partnership ending after 31 December 1971 and before the particular time, except a fiscal period subsequent to that in which the taxpayer ceased to be a member of the partnership, equal to the share of the taxpayer in the aggregate of Canadian exploration and development expenses, foreign resource pool expenses, Canadian exploration expenses, Canadian development expenses and Canadian oil and gas property expenses incurred by the partnership in the fiscal period and the amounts which, but for paragraph d of section 600, would be deductible in computing the income of the partnership for the fiscal period under the Act respecting the application of the Taxation Act (chapter I-4) in respect of exploration and development expenses,

ii.1.  where the taxpayer is a corporation or an individual, an amount in respect of each fiscal period of the partnership ending before the particular time, other than a fiscal period subsequent to that in which the taxpayer ceased to be a member of the partnership, equal to the taxpayer’s share of the aggregate of all amounts each of which would, but for section 134.2, be deductible in computing the partnership’s income for the fiscal period as dues described in subparagraph a or b of the first paragraph of that section or as a contribution described in subparagraph c of that paragraph,

iii.  any amount deemed, under section 714 or 752.0.10.11, to be the eligible amount of a gift made by the taxpayer as a member of the partnership at the end of any fiscal period of the partnership ending before that time, or in relation to another partnership of which the taxpayer is deemed to be a member under section 693.2 or the second paragraph of section 752.0.10.11 because the taxpayer is a member of the partnership at the end of such a fiscal period,

iv.  every amount received by the taxpayer, after 1971 and before the particular time, as a payment or distribution of his share in the profits or capital of the partnership other than a share under an agreement referred to in section 608,

v.  any amount required by sections 614 to 617 to be deducted before that particular time in computing the adjusted cost base to him of his interest in the partnership,

vi.  an amount equal to that portion of all prescribed amounts deducted in computing the tax otherwise payable by the taxpayer under a prescribed Act for his taxation years ending before that particular time that may reasonably be attributed to amounts added in respect of the partnership under a prescribed provision of the said Act in computing a prescribed amount relating to the taxpayer,

vii.  any amount added pursuant to subsection 4 of section 127.2 of the Income Tax Act in computing his share purchase tax credit for a taxation year ending before or after that time,

viii.  an amount equal to 50% of the amount deemed to be designated pursuant to subsection 4 of section 127.3 of the Income Tax Act before that time in respect of each share, debt obligation or right acquired by the partnership and deemed to have been acquired by the taxpayer under that subsection,

ix.  an amount equal to the amount of all assistance received by the taxpayer before that time that has resulted in a reduction of the capital cost of a depreciable property to the partnership by virtue of section 101.4,

x.  any amount deductible by the taxpayer under section 147.2 or 176.3 in respect of the partnership for a taxation year of the taxpayer ending at or after that time,

xi.  any amount added, before the particular time, to the issue base relating to certain issue expenses, within the meaning of section 726.4.17.11, of the taxpayer and determined by reference to an amount included in an amount referred to in subparagraph ii in respect of the taxpayer regarding the partnership, and

xii.  any amount required by subparagraph b of the first paragraph of section 726.9.6 to be deducted at that time in computing the adjusted cost base to the taxpayer of the interest;

(m)  where the property is an interest in a partnership to which section 636 or 645 applies, any amount received by the taxpayer in full or partial satisfaction of that interest;

TRUST

(n)  where the property is a capital interest of the taxpayer in a trust, other than an interest in a personal trust that has never been acquired for consideration or an interest in a trust referred to in subparagraphs a to d of the third paragraph of section 647,

i.  any amount, to the extent that it has become payable before 1 January 1988, paid to the taxpayer by the trust after 31 December 1971 and before the particular time as payment or distribution of capital, otherwise than as proceeds of disposition of the interest or part thereof,

i.1.  any amount that has become payable by the trust to the taxpayer after 31 December 1987 and before the particular time in respect of the interest, otherwise than as proceeds of disposition of the interest or part thereof, except that portion of the amount

(1)  that was included in computing the taxpayer’s income under section 663,

(1.1)  that is deemed to be a dividend received by the taxpayer under section 663.4,

(2)  from which tax was deducted under Part XIII of the Income Tax Act by reason of paragraph c of subsection 1 of section 212 of the said Act, or

(3)  where the trust was resident in Canada throughout its taxation year in which the amount became payable, that was designated by the trust to be payable to the taxpayer under section 667, that is, subject to section 257.4, equal to the amount designated by the trust to be payable to the taxpayer under section 668 or that is an assessable distribution, within the meaning of subsection 1 of section 218.3 of the Income Tax Act, to the taxpayer,

ii.  an amount equal to that portion of all prescribed amounts deducted in computing the tax payable by the taxpayer under a prescribed Act for his taxation years ending before the particular time that may reasonably be attributed to amounts added in respect of the trust under a prescribed provision of the said Act in computing a prescribed amount relating to the taxpayer,

iii.  any amount added pursuant to subsection 3 of section 127.2 of the Income Tax Act in computing his share purchase tax credit for a taxation year ending before or after that time,

iv.  an amount equal to 50% of the amount deemed to be designated pursuant to subsection 3 of section 127.3 of the Income Tax Act before that time in respect of each share, debt obligation or right acquired by the trust and deemed to have been acquired by the taxpayer under that subsection, and

v.  an amount equal to the amount of all assistance received by the taxpayer before that time that has resulted in a reduction of the capital cost of a depreciable property to the trust by virtue of section 101.4;

(o)  where the property is a capital interest in a trust not resident in Canada which the taxpayer purchased after 31 December 1971 and before the particular time from a person not resident in Canada, at a time, in this paragraph referred to as the “acquisition time”, when the property was not taxable Canadian property and the fair market value of the trust property referred to in section 258 was not less than 50% of the fair market value of all the trust property, the proportion of the amount by which such value of the property referred to in that section at the acquisition time exceeds the cost amounts to the trust at the acquisition time of the property that

i.  except where subparagraph ii applies, the fair market value at the acquisition time of the interest is of the fair market value at the acquisition time of all capital interests in the trust, or

ii.  in the case of a unit of a unit trust, the fair market value at the acquisition time of the unit is of the fair market value at the acquisition time of all the issued units of the trust;

(p)  where the property is a capital interest in a trust, any amount that is deducted under section 581 or 583 in computing the taxpayer’s income for a taxation year that ends at or before the particular time, in respect of the interest, or that could have been so deducted for such a taxation year but for sections 316.1, 456 to 458, 462.1 to 462.24.1 and 466 to 467.1;

(p.1)  where the property is a capital interest of the taxpayer in a designated trust, within the meaning of the first paragraph of section 671.5, the aggregate of all amounts each of which is an amount deducted, in respect of that interest, under section 772.15 in computing the tax payable under this Part by the taxpayer or, where the taxpayer is a partnership, by a member of the partnership, for a taxation year that ended before the particular time;

(q)  where the property is an interest in a segregated fund trust referred to in section 851.2:

i.  each amount in respect of that interest that is a capital loss deemed, under section 851.21, to have been allocated to the taxpayer before the particular time, and

ii.  each amount in respect of that interest that before the particular time was deemed by section 851.16 to have been a capital loss of the taxpayer;

(r)  (paragraph repealed).

1972, c. 23, s. 238; 1973, c. 17, s. 24; 1974, c. 18, s. 14; 1975, c. 22, s. 44; 1977, c. 26, s. 25; 1978, c. 26, s. 44; 1982, c. 5, s. 59; 1984, c. 15, s. 63; 1985, c. 25, s. 46; 1986, c. 19, s. 43; 1987, c. 67, s. 65; 1988, c. 4, s. 29; 1989, c. 77, s. 24; 1990, c. 59, s. 120; 1992, c. 1, s. 29; 1993, c. 16, s. 114; 1993, c. 64, s. 25; 1994, c. 22, s. 124; 1996, c. 39, s. 73; 1997, c. 3, s. 71; 1997, c. 14, s. 55; 1997, c. 31, s. 39; 1998, c. 16, s. 105; 2001, c. 7, s. 32; 2001, c. 53, s. 48; 2003, c. 2, s. 88; 2004, c. 8, s. 50; 2004, c. 21, s. 69; 2006, c. 13, s. 34; 2007, c. 12, s. 45; 2009, c. 5, s. 88; 2009, c. 15, s. 68; 2011, c. 6, s. 123; 2013, c. 10, s. 22; 2015, c. 21, s. 148; 2015, c. 24, s. 54; 2015, c. 36, s. 16; 2017, c. 1, s. 111.

2015-12-04

257. A taxpayer shall, in computing the adjusted cost base of a property at a particular time, deduct the following amounts:

MISCELLANEOUS CASES

(a)  in the case of a property which the taxpayer disposed of in part after 1971 and before the particular time, the amount established under section 254 for such taxpayer;

(b)  where sections 485 to 485.18 apply, the amount by which the adjusted cost base is required to be reduced before the particular time;

(b.1)  any amount required under paragraph c of section 259, paragraph a of any of sections 259.1 to 259.3 and 296.1, subparagraph b.1 of the first paragraph of section 301, subparagraph a of the first paragraph of section 543.2 or paragraph a of section 553.2 to be deducted in computing the adjusted cost base of the property or any amount by which that adjusted cost base is required to be reduced because of any of sections 485.9 to 485.11;

(c)  that part of the cost of the property which is deductible in computing the income, otherwise than because of this Title or of section 75.2.1 or 75.3, for any taxation year beginning before the particular time and ending after 31 December 1971;

(d)  where the property is acquired by the taxpayer after 31 December 1971, the aggregate of

i.  the amount by which any assistance, other than prescribed assistance, that the taxpayer has received or is entitled to receive before the particular time from a government, municipality or other public authority in respect of, or for the acquisition of, the property, whether as a grant, subsidy, forgivable loan, deduction from tax not otherwise provided for under this paragraph, investment allowance or as any other form of assistance, exceeds such part of the assistance as has been repaid by the taxpayer before that time in accordance with an obligation to repay all or any part of that assistance, and

ii.  the amounts, other than a prescribed amount, deducted by the taxpayer in respect of the property before the particular time under subsection 5 or 6 of section 127 of the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)) in computing his tax payable under the said Act;

(e)  where the property was received as consideration for a payment or loan referred to in section 383, as it read in respect of the payment or loan, which the taxpayer made or consented to before 20 April 1983 to a joint exploration corporation, within the meaning of section 382, as a shareholder corporation of such a corporation, in respect of Canadian exploration and development expenses, Canadian exploration expenses, Canadian development expenses or Canadian oil and gas property expenses incurred by the joint exploration corporation, or where the property was substituted for such a property, such portion of the payment or loan as may reasonably be considered to relate to an agreed portion referred to in section 381, 406, 417 or 418.13, as it read in respect of the agreed portion;

(f)  where the property is an indemnity within the meaning of sections 469 to 479, or is deemed to be such an indemnity under those sections, the amount required by subparagraph b of the first paragraph of section 471 to be deducted;

(f.1)  where the property is a debt owing to the taxpayer by a corporation, the amount required by section 511, or sections 517.1 to 517.6 as they applied before 23 May 1985, to be deducted before the particular time in computing the adjusted cost base of that debt;

(f.2)  the amount by which the amount elected by the taxpayer before the particular time under section 257.2 exceeds any repayment before that time by the taxpayer of an amount received by him as described in section 257.2 that may reasonably be considered to relate to the amount elected where the repayment is made pursuant to a legal obligation to repay all or any part of the amount so received;

(f.3)  where the property is property of a corporation control of which was acquired by a person or group of persons at or before that time, any amount required by subparagraph a of the second paragraph of section 736 to be deducted in computing the adjusted cost base of the property;

(f.4)  where the property is a right to acquire a share of the capital stock of a corporation or a unit of a mutual fund trust under an agreement, any amount required by paragraph b of section 1055.1 to be deducted;

(f.5)  where the property was at the end of 22 February 1994 a non-qualifying immovable property of the taxpayer within the meaning assigned by section 726.6.1 as that section applies to the taxation year 1994, any amount required by paragraph b of section 726.9.4 to be deducted in computing the adjusted cost base to the taxpayer of the property;

(f.6)  where the taxpayer elected under section 726.9.2 in respect of the property, any amount required by section 726.9.5 to be deducted in computing the adjusted cost base to the taxpayer of the property at the particular time;

(f.7)  where the property was acquired under a derivative forward agreement, any amount deductible in respect of the property under section 157.2.2 in computing the taxpayer’s income for a taxation year;

(f.8)  where the property is disposed of under a derivative forward agreement, any amount deductible in respect of the property under section 157.2.2 in computing the taxpayer’s income for the taxation year that includes the particular time;

SHARES OF A CORPORATION

(g)  where the property is a share of the capital stock of a corporation resident in Canada,

i.  any amount received by the taxpayer after 31 December 1971 and before the particular time as a dividend other than a taxable dividend or a dividend in respect of which the corporation has elected in accordance with section 502 or 502.1 and section 503 in respect of the full amount thereof,

ii.  any amount required by sections 517.1 to 517.6, as they applied before 23 May 1985, to be deducted before the particular time in computing the adjusted cost base of that share,

iii.  any amount received by the taxpayer after 1971 and before the particular time on a reduction of the paid-up capital of the corporation in respect of that share, except to the extent that that amount is deemed by section 508 to be a dividend received by him,

iv.  any amount, to the extent that such amount is not proceeds of disposition of a share, received by the taxpayer before that particular time that would, but for section 510.1, be deemed by section 508 to be a dividend received by him, and

v.  any amount required by section 280.6 to be deducted in computing the adjusted cost base to the taxpayer of the share;

(h)  where the property is a share of the capital stock of a joint exploration corporation, within the meaning of section 382, resident in Canada to which the taxpayer has, after 31 December 1971, made a contribution of capital otherwise than by way of a loan, which contribution was included in computing the adjusted cost base of the property by virtue of paragraph e of section 255, such portion of the contribution as may reasonably be considered to be part of an agreed portion referred to in section 381, 406, 417 or 418.13, as it read in respect of the agreed portion;

(h.1)  any amount required by section 419.2 to be deducted before that time in computing the adjusted cost base of the property;

(i)  where the property is a share, or an interest therein or a right thereto, of the capital stock of a corporation acquired before 1 August 1976, an amount equal to the expenses incurred by the taxpayer as consideration to acquire the property, to the extent that such expenses are for him Canadian exploration and development expenses under paragraph e of section 364, Canadian exploration expenses under paragraph e of section 395, Canadian development expenses under paragraph e of section 408 or Canadian oil and gas property expenses under paragraph c of section 418.2;

(j)  where the property is a share of the capital stock of a corporation not resident in Canada,

i.  if the corporation is a foreign affiliate of the taxpayer,

(1)  any amount required by subparagraph d of the first paragraph of section 477 or sections 585 to 588 to be deducted in computing the adjusted cost base to the taxpayer of the share, and

(2)  any amount received by the taxpayer before that time, on a reduction of the paid-up capital of the corporation in respect of the share, that is so received after 31 December 1971 and before 20 August 2011, or, where the reduction is a qualifying return of capital, within the meaning of section 577.3, in respect of the share, after 19 August 2011, or

ii.  in any other case, any amount received by the taxpayer after 31 December 1971 and before that time on a reduction of the paid-up capital of the corporation in respect of the share;

(j.1)  (paragraph repealed);

DEBT OBLIGATIONS

(k)  where the property is a debt obligation, any amount that was deductible by virtue of sections 167 and 168 for any taxation year commencing before that particular time;

INDEXED DEBT OBLIGATIONS

(k.1)  where the property is an indexed debt obligation,

i.  any amount referred to in paragraph b of section 125.0.1 in respect of the obligation and deductible in computing the income of the taxpayer for a taxation year beginning before the particular time, and

ii.  the amount of any payment that was received or that became receivable by the taxpayer at or before the particular time in respect of an amount that was added under paragraph h.0.1 of section 255 to the cost to the taxpayer of the obligation;

PARTNERSHIP

(l)  when the property is an interest in a partnership,

i.  subject to section 257.2.1, an amount in respect of each fiscal period of the partnership ending after 31 December 1971 and before the particular time, equal to the taxpayer’s share, other than a share under an agreement referred to in section 608, of any loss of the partnership from any source for that fiscal period, computed as if this Part were construed without reference to

(1)  the fraction “1/2” in section 105, as it applied to each fiscal period of the partnership ending before 1 April 1977, and without reference to that or another fraction in sections 107 and 231,

(2)  the reference to the fraction and the letter C in the formula provided for in the first paragraph of section 105.2, and

(3)  paragraph z.4 of section 87, sections 89 to 91, 144, 144.1, 145, 205 to 207, 235, 236.2 to 241, 264, 271, 273, 288, 293, 425, 638.1, 741.2 and 744.1, as it applied to dispositions of property that occurred before 27 April 1995, paragraph j of section 157, as it read before being struck out, Division XV of Chapter IV and paragraphs g and h of section 489, as they read before being struck out,

i.1.  an amount in respect of each fiscal period of the partnership ending before the particular time that is the taxpayer’s limited partnership loss in respect of the partnership for the taxation year in which that fiscal period ends to the extent that such loss was deducted by the taxpayer in computing his taxable income for any taxation year that commenced before the particular time,

i.2.  any amount deemed by section 261.2 to be a loss of the taxpayer,

i.3.  where at the particular time the property is not a tax shelter investment as defined in section 851.38 and the taxpayer would be a member described in section 261.1 of the partnership if the fiscal period of the partnership that includes that time ended at that time, the unpaid principal amount of any indebtedness of the taxpayer for which recourse is limited, either immediately or in the future and either absolutely or contingently, and that may reasonably be considered to have been used to acquire the property,

i.4.  unless the particular time immediately precedes a disposition of the interest, if the taxpayer is a member of the partnership and the taxpayer has been a specified member of the partnership at all times since becoming a member of the partnership, or the taxpayer is at the particular time a limited partner of the partnership for the purposes of section 261.1,

(1)  where the particular time is in the taxpayer’s first taxation year for which the taxpayer is eligible to deduct an amount in respect of the partnership under section 217.27, the portion of the amount deducted in computing the taxpayer’s income for the taxation year under section 217.27 in respect of the partnership that would be deductible if the definition of “qualifying transitional income” in the first paragraph of section 217.18 were read without reference to its paragraph b, and

(2)  where the particular time is in any other taxation year, the portion of the amount deducted under section 217.27 in computing the taxpayer’s income for the taxation year preceding that other taxation year in respect of the partnership that would be deductible if the definition of “qualifying transitional income” in the first paragraph of section 217.18 were read without reference to its paragraph b,

ii.  an amount with respect to each fiscal period of the partnership ending after 31 December 1971 and before the particular time, except a fiscal period subsequent to that in which the taxpayer ceased to be a member of the partnership, equal to the share of the taxpayer in the aggregate of Canadian exploration and development expenses, foreign resource pool expenses, Canadian exploration expenses, Canadian development expenses and Canadian oil and gas property expenses incurred by the partnership in the fiscal period and the amounts which, but for paragraph d of section 600, would be deductible in computing the income of the partnership for the fiscal period under the Act respecting the application of the Taxation Act (chapter I-4) in respect of exploration and development expenses,

ii.1.  where the taxpayer is a corporation or an individual, an amount in respect of each fiscal period of the partnership ending before the particular time, other than a fiscal period subsequent to that in which the taxpayer ceased to be a member of the partnership, equal to the taxpayer’s share of the aggregate of all amounts each of which would, but for section 134.2, be deductible in computing the partnership’s income for the fiscal period as dues described in subparagraph a or b of the first paragraph of that section or as a contribution described in subparagraph c of that paragraph,

iii.  any amount deemed, under section 714 or 752.0.10.11, to be the eligible amount of a gift made by the taxpayer as a member of the partnership at the end of any fiscal period of the partnership ending before that time, or in relation to another partnership of which the taxpayer is deemed to be a member under section 693.2 or the second paragraph of section 752.0.10.11 because the taxpayer is a member of the partnership at the end of such a fiscal period,

iv.  every amount received by the taxpayer, after 1971 and before the particular time, as a payment or distribution of his share in the profits or capital of the partnership other than a share under an agreement referred to in section 608,

v.  any amount required by sections 614 to 617 to be deducted before that particular time in computing the adjusted cost base to him of his interest in the partnership,

vi.  an amount equal to that portion of all prescribed amounts deducted in computing the tax otherwise payable by the taxpayer under a prescribed Act for his taxation years ending before that particular time that may reasonably be attributed to amounts added in respect of the partnership under a prescribed provision of the said Act in computing a prescribed amount relating to the taxpayer,

vii.  any amount added pursuant to subsection 4 of section 127.2 of the Income Tax Act in computing his share purchase tax credit for a taxation year ending before or after that time,

viii.  an amount equal to 50% of the amount deemed to be designated pursuant to subsection 4 of section 127.3 of the Income Tax Act before that time in respect of each share, debt obligation or right acquired by the partnership and deemed to have been acquired by the taxpayer under that subsection,

ix.  an amount equal to the amount of all assistance received by the taxpayer before that time that has resulted in a reduction of the capital cost of a depreciable property to the partnership by virtue of section 101.4,

x.  any amount deductible by the taxpayer under section 147.2 or 176.3 in respect of the partnership for a taxation year of the taxpayer ending at or after that time,

xi.  any amount added, before the particular time, to the issue base relating to certain issue expenses, within the meaning of section 726.4.17.11, of the taxpayer and determined by reference to an amount included in an amount referred to in subparagraph ii in respect of the taxpayer regarding the partnership, and

xii.  any amount required by subparagraph b of the first paragraph of section 726.9.6 to be deducted at that time in computing the adjusted cost base to the taxpayer of the interest;

(m)  where the property is an interest in a partnership to which section 636 or 645 applies, any amount received by the taxpayer in full or partial satisfaction of that interest;

TRUST

(n)  where the property is a capital interest of the taxpayer in a trust, other than an interest in a personal trust that has never been acquired for consideration or an interest in a trust referred to in subparagraphs a to d of the third paragraph of section 647,

i.  any amount, to the extent that it has become payable before 1 January 1988, paid to the taxpayer by the trust after 31 December 1971 and before the particular time as payment or distribution of capital, otherwise than as proceeds of disposition of the interest or part thereof,

i.1.  any amount that has become payable by the trust to the taxpayer after 31 December 1987 and before the particular time in respect of the interest, otherwise than as proceeds of disposition of the interest or part thereof, except that portion of the amount

(1)  that was included in computing the taxpayer’s income under section 663,

(1.1)  that is deemed to be a dividend received by the taxpayer under section 663.4,

(2)  from which tax was deducted under Part XIII of the Income Tax Act by reason of paragraph c of subsection 1 of section 212 of the said Act, or

(3)  where the trust was resident in Canada throughout its taxation year in which the amount became payable, that was designated by the trust to be payable to the taxpayer under section 667, that is, subject to section 257.4, equal to the amount designated by the trust to be payable to the taxpayer under section 668 or that is an assessable distribution, within the meaning of subsection 1 of section 218.3 of the Income Tax Act, to the taxpayer,

ii.  an amount equal to that portion of all prescribed amounts deducted in computing the tax payable by the taxpayer under a prescribed Act for his taxation years ending before the particular time that may reasonably be attributed to amounts added in respect of the trust under a prescribed provision of the said Act in computing a prescribed amount relating to the taxpayer,

iii.  any amount added pursuant to subsection 3 of section 127.2 of the Income Tax Act in computing his share purchase tax credit for a taxation year ending before or after that time,

iv.  an amount equal to 50% of the amount deemed to be designated pursuant to subsection 3 of section 127.3 of the Income Tax Act before that time in respect of each share, debt obligation or right acquired by the trust and deemed to have been acquired by the taxpayer under that subsection, and

v.  an amount equal to the amount of all assistance received by the taxpayer before that time that has resulted in a reduction of the capital cost of a depreciable property to the trust by virtue of section 101.4;

(o)  where the property is a capital interest in a trust not resident in Canada which the taxpayer purchased after 31 December 1971 and before the particular time from a person not resident in Canada, at a time, in this paragraph referred to as the “acquisition time”, when the property was not taxable Canadian property and the fair market value of the trust property referred to in section 258 was not less than 50% of the fair market value of all the trust property, the proportion of the amount by which such value of the property referred to in that section at the acquisition time exceeds the cost amounts to the trust at the acquisition time of the property that

i.  except where subparagraph ii applies, the fair market value at the acquisition time of the interest is of the fair market value at the acquisition time of all capital interests in the trust, or

ii.  in the case of a unit of a unit trust, the fair market value at the acquisition time of the unit is of the fair market value at the acquisition time of all the issued units of the trust;

(p)  where the property is a capital interest in a trust, any amount that is deducted under section 581 or 583 in computing the taxpayer’s income for a taxation year that ends at or before the particular time, in respect of the interest, or that could have been so deducted for such a taxation year but for sections 316.1, 456 to 458, 462.1 to 462.24.1 and 466 to 467.1;

(p.1)  where the property is a capital interest of the taxpayer in a designated trust, within the meaning of the first paragraph of section 671.5, the aggregate of all amounts each of which is an amount deducted, in respect of that interest, under section 772.15 in computing the tax payable under this Part by the taxpayer or, where the taxpayer is a partnership, by a member of the partnership, for a taxation year that ended before the particular time;

(q)  where the property is an interest in a segregated fund trust referred to in section 851.2:

i.  each amount in respect of that interest that is a capital loss deemed, under section 851.21, to have been allocated to the taxpayer before the particular time, and

ii.  each amount in respect of that interest that before the particular time was deemed by section 851.16 to have been a capital loss of the taxpayer;

(r)  (paragraph repealed).

1972, c. 23, s. 238; 1973, c. 17, s. 24; 1974, c. 18, s. 14; 1975, c. 22, s. 44; 1977, c. 26, s. 25; 1978, c. 26, s. 44; 1982, c. 5, s. 59; 1984, c. 15, s. 63; 1985, c. 25, s. 46; 1986, c. 19, s. 43; 1987, c. 67, s. 65; 1988, c. 4, s. 29; 1989, c. 77, s. 24; 1990, c. 59, s. 120; 1992, c. 1, s. 29; 1993, c. 16, s. 114; 1993, c. 64, s. 25; 1994, c. 22, s. 124; 1996, c. 39, s. 73; 1997, c. 3, s. 71; 1997, c. 14, s. 55; 1997, c. 31, s. 39; 1998, c. 16, s. 105; 2001, c. 7, s. 32; 2001, c. 53, s. 48; 2003, c. 2, s. 88; 2004, c. 8, s. 50; 2004, c. 21, s. 69; 2006, c. 13, s. 34; 2007, c. 12, s. 45; 2009, c. 5, s. 88; 2009, c. 15, s. 68; 2011, c. 6, s. 123; 2013, c. 10, s. 22; 2015, c. 21, s. 148; 2015, c. 24, s. 54; 2015, c. 36, s. 16.

2015-10-26

257. A taxpayer shall, in computing the adjusted cost base of a property at a particular time, deduct the following amounts:

MISCELLANEOUS CASES

(a)  in the case of a property which the taxpayer disposed of in part after 1971 and before the particular time, the amount established under section 254 for such taxpayer;

(b)  where sections 485 to 485.18 apply, the amount by which the adjusted cost base is required to be reduced before the particular time;

(b.1)  any amount required under paragraph c of section 259, paragraph a of any of sections 259.1 to 259.3 and 296.1, subparagraph b.1 of the first paragraph of section 301, subparagraph a of the first paragraph of section 543.2 or paragraph a of section 553.2 to be deducted in computing the adjusted cost base of the property or any amount by which that adjusted cost base is required to be reduced because of any of sections 485.9 to 485.11;

(c)  that part of the cost of the property which is deductible in computing the income, otherwise than because of this Title or of section 75.2.1 or 75.3, for any taxation year beginning before the particular time and ending after 31 December 1971;

(d)  where the property is acquired by the taxpayer after 31 December 1971, the aggregate of

i.  the amount by which any assistance, other than prescribed assistance, that the taxpayer has received or is entitled to receive before the particular time from a government, municipality or other public authority in respect of, or for the acquisition of, the property, whether as a grant, subsidy, forgivable loan, deduction from tax not otherwise provided for under this paragraph, investment allowance or as any other form of assistance, exceeds such part of the assistance as has been repaid by the taxpayer before that time in accordance with an obligation to repay all or any part of that assistance, and

ii.  the amounts, other than a prescribed amount, deducted by the taxpayer in respect of the property before the particular time under subsection 5 or 6 of section 127 of the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)) in computing his tax payable under the said Act;

(e)  where the property was received as consideration for a payment or loan referred to in section 383, as it read in respect of the payment or loan, which the taxpayer made or consented to before 20 April 1983 to a joint exploration corporation, within the meaning of section 382, as a shareholder corporation of such a corporation, in respect of Canadian exploration and development expenses, Canadian exploration expenses, Canadian development expenses or Canadian oil and gas property expenses incurred by the joint exploration corporation, or where the property was substituted for such a property, such portion of the payment or loan as may reasonably be considered to relate to an agreed portion referred to in section 381, 406, 417 or 418.13, as it read in respect of the agreed portion;

(f)  where the property is an indemnity within the meaning of sections 469 to 479, or is deemed to be such an indemnity under those sections, the amount required by subparagraph b of the first paragraph of section 471 to be deducted;

(f.1)  where the property is a debt owing to the taxpayer by a corporation, the amount required by section 511, or sections 517.1 to 517.6 as they applied before 23 May 1985, to be deducted before the particular time in computing the adjusted cost base of that debt;

(f.2)  the amount by which the amount elected by the taxpayer before the particular time under section 257.2 exceeds any repayment before that time by the taxpayer of an amount received by him as described in section 257.2 that may reasonably be considered to relate to the amount elected where the repayment is made pursuant to a legal obligation to repay all or any part of the amount so received;

(f.3)  where the property is property of a corporation control of which was acquired by a person or group of persons at or before that time, any amount required by subparagraph a of the second paragraph of section 736 to be deducted in computing the adjusted cost base of the property;

(f.4)  where the property is a right to acquire a share of the capital stock of a corporation or a unit of a mutual fund trust under an agreement, any amount required by paragraph b of section 1055.1 to be deducted;

(f.5)  where the property was at the end of 22 February 1994 a non-qualifying immovable property of the taxpayer within the meaning assigned by section 726.6.1 as that section applies to the taxation year 1994, any amount required by paragraph b of section 726.9.4 to be deducted in computing the adjusted cost base to the taxpayer of the property;

(f.6)  where the taxpayer elected under section 726.9.2 in respect of the property, any amount required by section 726.9.5 to be deducted in computing the adjusted cost base to the taxpayer of the property at the particular time;

(f.7)  where the property was acquired under a derivative forward agreement, any amount deductible in respect of the property under section 157.2.2 in computing the taxpayer’s income for a taxation year;

(f.8)  where the property is disposed of under a derivative forward agreement, any amount deductible in respect of the property under section 157.2.2 in computing the taxpayer’s income for the taxation year that includes the particular time;

SHARES OF A CORPORATION

(g)  where the property is a share of the capital stock of a corporation resident in Canada,

i.  any amount received by the taxpayer after 31 December 1971 and before the particular time as a dividend other than a taxable dividend or a dividend in respect of which the corporation has elected in accordance with section 502 or 502.1 and section 503 in respect of the full amount thereof,

ii.  any amount required by sections 517.1 to 517.6, as they applied before 23 May 1985, to be deducted before the particular time in computing the adjusted cost base of that share,

iii.  any amount received by the taxpayer after 1971 and before the particular time on a reduction of the paid-up capital of the corporation in respect of that share, except to the extent that that amount is deemed by section 508 to be a dividend received by him,

iv.  any amount, to the extent that such amount is not proceeds of disposition of a share, received by the taxpayer before that particular time that would, but for section 510.1, be deemed by section 508 to be a dividend received by him, and

v.  any amount required by section 280.6 to be deducted in computing the adjusted cost base to the taxpayer of the share;

(h)  where the property is a share of the capital stock of a joint exploration corporation, within the meaning of section 382, resident in Canada to which the taxpayer has, after 31 December 1971, made a contribution of capital otherwise than by way of a loan, which contribution was included in computing the adjusted cost base of the property by virtue of paragraph e of section 255, such portion of the contribution as may reasonably be considered to be part of an agreed portion referred to in section 381, 406, 417 or 418.13, as it read in respect of the agreed portion;

(h.1)  any amount required by section 419.2 to be deducted before that time in computing the adjusted cost base of the property;

(i)  where the property is a share, or an interest therein or a right thereto, of the capital stock of a corporation acquired before 1 August 1976, an amount equal to the expenses incurred by the taxpayer as consideration to acquire the property, to the extent that such expenses are for him Canadian exploration and development expenses under paragraph e of section 364, Canadian exploration expenses under paragraph e of section 395, Canadian development expenses under paragraph e of section 408 or Canadian oil and gas property expenses under paragraph c of section 418.2;

(j)  where the property is a share of the capital stock of a corporation not resident in Canada,

i.  if the corporation is a foreign affiliate of the taxpayer,

(1)  any amount required by subparagraph d of the first paragraph of section 477 or sections 585 to 588 to be deducted in computing the adjusted cost base to the taxpayer of the share, and

(2)  any amount received by the taxpayer before that time, on a reduction of the paid-up capital of the corporation in respect of the share, that is so received after 31 December 1971 and before 20 August 2011, or, where the reduction is a qualifying return of capital, within the meaning of section 577.3, in respect of the share, after 19 August 2011, or

ii.  in any other case, any amount received by the taxpayer after 31 December 1971 and before that time on a reduction of the paid-up capital of the corporation in respect of the share;

(j.1)  (paragraph repealed);

DEBT OBLIGATIONS

(k)  where the property is a debt obligation, any amount that was deductible by virtue of sections 167 and 168 for any taxation year commencing before that particular time;

INDEXED DEBT OBLIGATIONS

(k.1)  where the property is an indexed debt obligation,

i.  any amount referred to in paragraph b of section 125.0.1 in respect of the obligation and deductible in computing the income of the taxpayer for a taxation year beginning before the particular time, and

ii.  the amount of any payment that was received or that became receivable by the taxpayer at or before the particular time in respect of an amount that was added under paragraph h.0.1 of section 255 to the cost to the taxpayer of the obligation;

PARTNERSHIP

(l)  when the property is an interest in a partnership,

i.  subject to section 257.2.1, an amount in respect of each fiscal period of the partnership ending after 31 December 1971 and before the particular time, equal to the taxpayer’s share, other than a share under an agreement referred to in section 608, of any loss of the partnership from any source for that fiscal period, computed as if this Part were construed without reference to

(1)  the fraction “1/2” in section 105, as it applied to each fiscal period of the partnership ending before 1 April 1977, and without reference to that or another fraction in sections 107 and 231,

(2)  the reference to the fraction and the letter C in the formula provided for in the first paragraph of section 105.2, and

(3)  paragraph z.4 of section 87, sections 89 to 91, 144, 144.1, 145, 205 to 207, 235, 236.2 to 241, 264, 271, 273, 288, 293, 425, 638.1, 741.2 and 744.1, as it applied to dispositions of property that occurred before 27 April 1995, paragraph j of section 157, as it read before being struck out, Division XV of Chapter IV and paragraphs g and h of section 489, as they read before being struck out,

i.1.  an amount in respect of each fiscal period of the partnership ending before the particular time that is the taxpayer’s limited partnership loss in respect of the partnership for the taxation year in which that fiscal period ends to the extent that such loss was deducted by the taxpayer in computing his taxable income for any taxation year that commenced before the particular time,

i.2.  any amount deemed by section 261.2 to be a loss of the taxpayer,

i.3.  where at the particular time the property is not a tax shelter investment as defined in section 851.38 and the taxpayer would be a member described in section 261.1 of the partnership if the fiscal period of the partnership that includes that time ended at that time, the unpaid principal amount of any indebtedness of the taxpayer for which recourse is limited, either immediately or in the future and either absolutely or contingently, and that may reasonably be considered to have been used to acquire the property,

i.4.  unless the particular time immediately precedes a disposition of the interest, if the taxpayer is a member of the partnership and the taxpayer has been a specified member of the partnership at all times since becoming a member of the partnership, or the taxpayer is at the particular time a limited partner of the partnership for the purposes of section 261.1,

(1)  where the particular time is in the taxpayer’s first taxation year for which the taxpayer is eligible to deduct an amount in respect of the partnership under section 217.27, the portion of the amount deducted in computing the taxpayer’s income for the taxation year under section 217.27 in respect of the partnership that would be deductible if the definition of “qualifying transitional income” in the first paragraph of section 217.18 were read without reference to its paragraph b, and

(2)  where the particular time is in any other taxation year, the portion of the amount deducted under section 217.27 in computing the taxpayer’s income for the taxation year preceding that other taxation year in respect of the partnership that would be deductible if the definition of “qualifying transitional income” in the first paragraph of section 217.18 were read without reference to its paragraph b,

ii.  an amount with respect to each fiscal period of the partnership ending after 31 December 1971 and before the particular time, except a fiscal period subsequent to that in which the taxpayer ceased to be a member of the partnership, equal to the share of the taxpayer in the aggregate of Canadian exploration and development expenses, foreign resource pool expenses, Canadian exploration expenses, Canadian development expenses and Canadian oil and gas property expenses incurred by the partnership in the fiscal period and the amounts which, but for paragraph d of section 600, would be deductible in computing the income of the partnership for the fiscal period under the Act respecting the application of the Taxation Act (chapter I-4) in respect of exploration and development expenses,

ii.1.  where the taxpayer is a corporation or an individual, an amount in respect of each fiscal period of the partnership ending before the particular time, other than a fiscal period subsequent to that in which the taxpayer ceased to be a member of the partnership, equal to the taxpayer’s share of the aggregate of all amounts each of which would, but for section 134.2, be deductible in computing the partnership’s income for the fiscal period as dues described in subparagraph a or b of the first paragraph of that section or as a contribution described in subparagraph c of that paragraph,

iii.  any amount deemed, under section 714 or 752.0.10.11, to be the eligible amount of a gift made by the taxpayer as a member of the partnership at the end of any fiscal period of the partnership ending before that time, or in relation to another partnership of which the taxpayer is deemed to be a member under section 693.2 or the second paragraph of section 752.0.10.11 because the taxpayer is a member of the partnership at the end of such a fiscal period,

iv.  every amount received by the taxpayer, after 1971 and before the particular time, as a payment or distribution of his share in the profits or capital of the partnership other than a share under an agreement referred to in section 608,

v.  any amount required by sections 614 to 617 to be deducted before that particular time in computing the adjusted cost base to him of his interest in the partnership,

vi.  an amount equal to that portion of all prescribed amounts deducted in computing the tax otherwise payable by the taxpayer under a prescribed Act for his taxation years ending before that particular time that may reasonably be attributed to amounts added in respect of the partnership under a prescribed provision of the said Act in computing a prescribed amount relating to the taxpayer,

vii.  any amount added pursuant to subsection 4 of section 127.2 of the Income Tax Act in computing his share purchase tax credit for a taxation year ending before or after that time,

viii.  an amount equal to 50% of the amount deemed to be designated pursuant to subsection 4 of section 127.3 of the Income Tax Act before that time in respect of each share, debt obligation or right acquired by the partnership and deemed to have been acquired by the taxpayer under that subsection,

ix.  an amount equal to the amount of all assistance received by the taxpayer before that time that has resulted in a reduction of the capital cost of a depreciable property to the partnership by virtue of section 101.4,

x.  any amount deductible by the taxpayer under section 147.2 or 176.3 in respect of the partnership for a taxation year of the taxpayer ending at or after that time,

xi.  any amount added, before the particular time, to the issue base relating to certain issue expenses, within the meaning of section 726.4.17.11, of the taxpayer and determined by reference to an amount included in an amount referred to in subparagraph ii in respect of the taxpayer regarding the partnership, and

xii.  any amount required by subparagraph b of the first paragraph of section 726.9.6 to be deducted at that time in computing the adjusted cost base to the taxpayer of the interest;

(m)  where the property is an interest in a partnership to which section 636 or 645 applies, any amount received by the taxpayer in full or partial satisfaction of that interest;

TRUST

(n)  where the property is a capital interest of the taxpayer in a trust, other than an interest in a personal trust that has never been acquired for consideration or an interest in a trust referred to in subparagraphs a to d of the third paragraph of section 647,

i.  any amount, to the extent that it has become payable before 1 January 1988, paid to the taxpayer by the trust after 31 December 1971 and before the particular time as payment or distribution of capital, otherwise than as proceeds of disposition of the interest or part thereof,

i.1.  any amount that has become payable by the trust to the taxpayer after 31 December 1987 and before the particular time in respect of the interest, otherwise than as proceeds of disposition of the interest or part thereof, except that portion of the amount

(1)  that was included in computing the taxpayer’s income under section 663,

(1.1)  that is deemed to be a dividend received by the taxpayer under section 663.4,

(2)  from which tax was deducted under Part XIII of the Income Tax Act by reason of paragraph c of subsection 1 of section 212 of the said Act, or

(3)  where the trust was resident in Canada throughout its taxation year in which the amount became payable, that was designated by the trust to be payable to the taxpayer under section 667, that is, subject to section 257.4, equal to the amount designated by the trust to be payable to the taxpayer under section 668 or that is an assessable distribution, within the meaning of subsection 1 of section 218.3 of the Income Tax Act, to the taxpayer,

ii.  an amount equal to that portion of all prescribed amounts deducted in computing the tax payable by the taxpayer under a prescribed Act for his taxation years ending before the particular time that may reasonably be attributed to amounts added in respect of the trust under a prescribed provision of the said Act in computing a prescribed amount relating to the taxpayer,

iii.  any amount added pursuant to subsection 3 of section 127.2 of the Income Tax Act in computing his share purchase tax credit for a taxation year ending before or after that time,

iv.  an amount equal to 50% of the amount deemed to be designated pursuant to subsection 3 of section 127.3 of the Income Tax Act before that time in respect of each share, debt obligation or right acquired by the trust and deemed to have been acquired by the taxpayer under that subsection, and

v.  an amount equal to the amount of all assistance received by the taxpayer before that time that has resulted in a reduction of the capital cost of a depreciable property to the trust by virtue of section 101.4;

(o)  where the property is a capital interest in a trust not resident in Canada which the taxpayer purchased after 31 December 1971 and before the particular time from a person not resident in Canada, at a time, in this paragraph referred to as the “acquisition time”, when the property was not taxable Canadian property and the fair market value of the trust property referred to in section 258 was not less than 50% of the fair market value of all the trust property, the proportion of the amount by which such value of the property referred to in that section at the acquisition time exceeds the cost amounts to the trust at the acquisition time of the property that

i.  except where subparagraph ii applies, the fair market value at the acquisition time of the interest is of the fair market value at the acquisition time of all capital interests in the trust, or

ii.  in the case of a unit of a unit trust, the fair market value at the acquisition time of the unit is of the fair market value at the acquisition time of all the issued units of the trust;

(p)  where the property is a capital interest in a trust to which section 596 applies, any amount required by section 597 to be deducted;

(p.1)  where the property is a capital interest of the taxpayer in a designated trust, within the meaning of the first paragraph of section 671.5, the aggregate of all amounts each of which is an amount deducted, in respect of that interest, under section 772.15 in computing the tax payable under this Part by the taxpayer or, where the taxpayer is a partnership, by a member of the partnership, for a taxation year that ended before the particular time;

(q)  where the property is an interest in a segregated fund trust referred to in section 851.2:

i.  each amount in respect of that interest that is a capital loss deemed, under section 851.21, to have been allocated to the taxpayer before the particular time, and

ii.  each amount in respect of that interest that before the particular time was deemed by section 851.16 to have been a capital loss of the taxpayer;

(r)  (paragraph repealed).

1972, c. 23, s. 238; 1973, c. 17, s. 24; 1974, c. 18, s. 14; 1975, c. 22, s. 44; 1977, c. 26, s. 25; 1978, c. 26, s. 44; 1982, c. 5, s. 59; 1984, c. 15, s. 63; 1985, c. 25, s. 46; 1986, c. 19, s. 43; 1987, c. 67, s. 65; 1988, c. 4, s. 29; 1989, c. 77, s. 24; 1990, c. 59, s. 120; 1992, c. 1, s. 29; 1993, c. 16, s. 114; 1993, c. 64, s. 25; 1994, c. 22, s. 124; 1996, c. 39, s. 73; 1997, c. 3, s. 71; 1997, c. 14, s. 55; 1997, c. 31, s. 39; 1998, c. 16, s. 105; 2001, c. 7, s. 32; 2001, c. 53, s. 48; 2003, c. 2, s. 88; 2004, c. 8, s. 50; 2004, c. 21, s. 69; 2006, c. 13, s. 34; 2007, c. 12, s. 45; 2009, c. 5, s. 88; 2009, c. 15, s. 68; 2011, c. 6, s. 123; 2013, c. 10, s. 22; 2015, c. 21, s. 148; 2015, c. 24, s. 54.

2015-10-21

257. A taxpayer shall, in computing the adjusted cost base of a property at a particular time, deduct the following amounts:

MISCELLANEOUS CASES

(a)  in the case of a property which the taxpayer disposed of in part after 1971 and before the particular time, the amount established under section 254 for such taxpayer;

(b)  where sections 485 to 485.18 apply, the amount by which the adjusted cost base is required to be reduced before the particular time;

(b.1)  any amount required under paragraph c of section 259, paragraph a of any of sections 259.1 to 259.3 and 296.1, subparagraph b.1 of the first paragraph of section 301, subparagraph a of the first paragraph of section 543.2 or paragraph a of section 553.2 to be deducted in computing the adjusted cost base of the property or any amount by which that adjusted cost base is required to be reduced because of any of sections 485.9 to 485.11;

(c)  that part of the cost of the property which is deductible in computing the income, otherwise than because of this Title or of section 75.2.1 or 75.3, for any taxation year beginning before the particular time and ending after 31 December 1971;

(d)  where the property is acquired by the taxpayer after 31 December 1971, the aggregate of

i.  the amount by which any assistance, other than prescribed assistance, that the taxpayer has received or is entitled to receive before the particular time from a government, municipality or other public authority in respect of, or for the acquisition of, the property, whether as a grant, subsidy, forgivable loan, deduction from tax not otherwise provided for under this paragraph, investment allowance or as any other form of assistance, exceeds such part of the assistance as has been repaid by the taxpayer before that time in accordance with an obligation to repay all or any part of that assistance, and

ii.  the amounts, other than a prescribed amount, deducted by the taxpayer in respect of the property before the particular time under subsection 5 or 6 of section 127 of the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)) in computing his tax payable under the said Act;

(e)  where the property was received as consideration for a payment or loan referred to in section 383, as it read in respect of the payment or loan, which the taxpayer made or consented to before 20 April 1983 to a joint exploration corporation, within the meaning of section 382, as a shareholder corporation of such a corporation, in respect of Canadian exploration and development expenses, Canadian exploration expenses, Canadian development expenses or Canadian oil and gas property expenses incurred by the joint exploration corporation, or where the property was substituted for such a property, such portion of the payment or loan as may reasonably be considered to relate to an agreed portion referred to in section 381, 406, 417 or 418.13, as it read in respect of the agreed portion;

(f)  where the property is an indemnity within the meaning of sections 469 to 479, or is deemed to be such an indemnity under those sections, the amount required by subparagraph b of the first paragraph of section 471 to be deducted;

(f.1)  where the property is a debt owing to the taxpayer by a corporation, the amount required by section 511, or sections 517.1 to 517.6 as they applied before 23 May 1985, to be deducted before the particular time in computing the adjusted cost base of that debt;

(f.2)  the amount by which the amount elected by the taxpayer before the particular time under section 257.2 exceeds any repayment before that time by the taxpayer of an amount received by him as described in section 257.2 that may reasonably be considered to relate to the amount elected where the repayment is made pursuant to a legal obligation to repay all or any part of the amount so received;

(f.3)  where the property is property of a corporation control of which was acquired by a person or group of persons at or before that time, any amount required by subparagraph a of the second paragraph of section 736 to be deducted in computing the adjusted cost base of the property;

(f.4)  where the property is a right to acquire a share of the capital stock of a corporation or a unit of a mutual fund trust under an agreement, any amount required by paragraph b of section 1055.1 to be deducted;

(f.5)  where the property was at the end of 22 February 1994 a non-qualifying immovable property of the taxpayer within the meaning assigned by section 726.6.1 as that section applies to the taxation year 1994, any amount required by paragraph b of section 726.9.4 to be deducted in computing the adjusted cost base to the taxpayer of the property;

(f.6)  where the taxpayer elected under section 726.9.2 in respect of the property, any amount required by section 726.9.5 to be deducted in computing the adjusted cost base to the taxpayer of the property at the particular time;

SHARES OF A CORPORATION

(g)  where the property is a share of the capital stock of a corporation resident in Canada,

i.  any amount received by the taxpayer after 31 December 1971 and before the particular time as a dividend other than a taxable dividend or a dividend in respect of which the corporation has elected in accordance with section 502 or 502.1 and section 503 in respect of the full amount thereof,

ii.  any amount required by sections 517.1 to 517.6, as they applied before 23 May 1985, to be deducted before the particular time in computing the adjusted cost base of that share,

iii.  any amount received by the taxpayer after 1971 and before the particular time on a reduction of the paid-up capital of the corporation in respect of that share, except to the extent that that amount is deemed by section 508 to be a dividend received by him,

iv.  any amount, to the extent that such amount is not proceeds of disposition of a share, received by the taxpayer before that particular time that would, but for section 510.1, be deemed by section 508 to be a dividend received by him, and

v.  any amount required by section 280.6 to be deducted in computing the adjusted cost base to the taxpayer of the share;

(h)  where the property is a share of the capital stock of a joint exploration corporation, within the meaning of section 382, resident in Canada to which the taxpayer has, after 31 December 1971, made a contribution of capital otherwise than by way of a loan, which contribution was included in computing the adjusted cost base of the property by virtue of paragraph e of section 255, such portion of the contribution as may reasonably be considered to be part of an agreed portion referred to in section 381, 406, 417 or 418.13, as it read in respect of the agreed portion;

(h.1)  any amount required by section 419.2 to be deducted before that time in computing the adjusted cost base of the property;

(i)  where the property is a share, or an interest therein or a right thereto, of the capital stock of a corporation acquired before 1 August 1976, an amount equal to the expenses incurred by the taxpayer as consideration to acquire the property, to the extent that such expenses are for him Canadian exploration and development expenses under paragraph e of section 364, Canadian exploration expenses under paragraph e of section 395, Canadian development expenses under paragraph e of section 408 or Canadian oil and gas property expenses under paragraph c of section 418.2;

(j)  where the property is a share of the capital stock of a corporation not resident in Canada,

i.  if the corporation is a foreign affiliate of the taxpayer,

(1)  any amount required by subparagraph d of the first paragraph of section 477 or sections 585 to 588 to be deducted in computing the adjusted cost base to the taxpayer of the share, and

(2)  any amount received by the taxpayer before that time, on a reduction of the paid-up capital of the corporation in respect of the share, that is so received after 31 December 1971 and before 20 August 2011, or, where the reduction is a qualifying return of capital, within the meaning of section 577.3, in respect of the share, after 19 August 2011, or

ii.  in any other case, any amount received by the taxpayer after 31 December 1971 and before that time on a reduction of the paid-up capital of the corporation in respect of the share;

(j.1)  (paragraph repealed);

DEBT OBLIGATIONS

(k)  where the property is a debt obligation, any amount that was deductible by virtue of sections 167 and 168 for any taxation year commencing before that particular time;

INDEXED DEBT OBLIGATIONS

(k.1)  where the property is an indexed debt obligation,

i.  any amount referred to in paragraph b of section 125.0.1 in respect of the obligation and deductible in computing the income of the taxpayer for a taxation year beginning before the particular time, and

ii.  the amount of any payment that was received or that became receivable by the taxpayer at or before the particular time in respect of an amount that was added under paragraph h.0.1 of section 255 to the cost to the taxpayer of the obligation;

PARTNERSHIP

(l)  when the property is an interest in a partnership,

i.  subject to section 257.2.1, an amount in respect of each fiscal period of the partnership ending after 31 December 1971 and before the particular time, equal to the taxpayer’s share, other than a share under an agreement referred to in section 608, of any loss of the partnership from any source for that fiscal period, computed as if this Part were construed without reference to

(1)  the fraction “1/2” in section 105, as it applied to each fiscal period of the partnership ending before 1 April 1977, and without reference to that or another fraction in sections 107 and 231,

(2)  the reference to the fraction and the letter C in the formula provided for in the first paragraph of section 105.2, and

(3)  paragraph z.4 of section 87, sections 89 to 91, 144, 144.1, 145, 205 to 207, 235, 236.2 to 241, 264, 271, 273, 288, 293, 425, 638.1, 741.2 and 744.1, as it applied to dispositions of property that occurred before 27 April 1995, paragraph j of section 157, as it read before being struck out, Division XV of Chapter IV and paragraphs g and h of section 489, as they read before being struck out,

i.1.  an amount in respect of each fiscal period of the partnership ending before the particular time that is the taxpayer’s limited partnership loss in respect of the partnership for the taxation year in which that fiscal period ends to the extent that such loss was deducted by the taxpayer in computing his taxable income for any taxation year that commenced before the particular time,

i.2.  any amount deemed by section 261.2 to be a loss of the taxpayer,

i.3.  where at the particular time the property is not a tax shelter investment as defined in section 851.38 and the taxpayer would be a member described in section 261.1 of the partnership if the fiscal period of the partnership that includes that time ended at that time, the unpaid principal amount of any indebtedness of the taxpayer for which recourse is limited, either immediately or in the future and either absolutely or contingently, and that may reasonably be considered to have been used to acquire the property,

i.4.  unless the particular time immediately precedes a disposition of the interest, if the taxpayer is a member of the partnership and the taxpayer has been a specified member of the partnership at all times since becoming a member of the partnership, or the taxpayer is at the particular time a limited partner of the partnership for the purposes of section 261.1,

(1)  where the particular time is in the taxpayer’s first taxation year for which the taxpayer is eligible to deduct an amount in respect of the partnership under section 217.27, the portion of the amount deducted in computing the taxpayer’s income for the taxation year under section 217.27 in respect of the partnership that would be deductible if the definition of “qualifying transitional income” in the first paragraph of section 217.18 were read without reference to its paragraph b, and

(2)  where the particular time is in any other taxation year, the portion of the amount deducted under section 217.27 in computing the taxpayer’s income for the taxation year preceding that other taxation year in respect of the partnership that would be deductible if the definition of “qualifying transitional income” in the first paragraph of section 217.18 were read without reference to its paragraph b,

ii.  an amount with respect to each fiscal period of the partnership ending after 31 December 1971 and before the particular time, except a fiscal period subsequent to that in which the taxpayer ceased to be a member of the partnership, equal to the share of the taxpayer in the aggregate of Canadian exploration and development expenses, foreign resource pool expenses, Canadian exploration expenses, Canadian development expenses and Canadian oil and gas property expenses incurred by the partnership in the fiscal period and the amounts which, but for paragraph d of section 600, would be deductible in computing the income of the partnership for the fiscal period under the Act respecting the application of the Taxation Act (chapter I-4) in respect of exploration and development expenses,

ii.1.  where the taxpayer is a corporation or an individual, an amount in respect of each fiscal period of the partnership ending before the particular time, other than a fiscal period subsequent to that in which the taxpayer ceased to be a member of the partnership, equal to the taxpayer’s share of the aggregate of all amounts each of which would, but for section 134.2, be deductible in computing the partnership’s income for the fiscal period as dues described in subparagraph a or b of the first paragraph of that section or as a contribution described in subparagraph c of that paragraph,

iii.  any amount deemed, under section 714 or 752.0.10.11, to be the eligible amount of a gift made by the taxpayer as a member of the partnership at the end of any fiscal period of the partnership ending before that time, or in relation to another partnership of which the taxpayer is deemed to be a member under section 693.2 or the second paragraph of section 752.0.10.11 because the taxpayer is a member of the partnership at the end of such a fiscal period,

iv.  every amount received by the taxpayer, after 1971 and before the particular time, as a payment or distribution of his share in the profits or capital of the partnership other than a share under an agreement referred to in section 608,

v.  any amount required by sections 614 to 617 to be deducted before that particular time in computing the adjusted cost base to him of his interest in the partnership,

vi.  an amount equal to that portion of all prescribed amounts deducted in computing the tax otherwise payable by the taxpayer under a prescribed Act for his taxation years ending before that particular time that may reasonably be attributed to amounts added in respect of the partnership under a prescribed provision of the said Act in computing a prescribed amount relating to the taxpayer,

vii.  any amount added pursuant to subsection 4 of section 127.2 of the Income Tax Act in computing his share purchase tax credit for a taxation year ending before or after that time,

viii.  an amount equal to 50% of the amount deemed to be designated pursuant to subsection 4 of section 127.3 of the Income Tax Act before that time in respect of each share, debt obligation or right acquired by the partnership and deemed to have been acquired by the taxpayer under that subsection,

ix.  an amount equal to the amount of all assistance received by the taxpayer before that time that has resulted in a reduction of the capital cost of a depreciable property to the partnership by virtue of section 101.4,

x.  any amount deductible by the taxpayer under section 147.2 or 176.3 in respect of the partnership for a taxation year of the taxpayer ending at or after that time,

xi.  any amount added, before the particular time, to the issue base relating to certain issue expenses, within the meaning of section 726.4.17.11, of the taxpayer and determined by reference to an amount included in an amount referred to in subparagraph ii in respect of the taxpayer regarding the partnership, and

xii.  any amount required by subparagraph b of the first paragraph of section 726.9.6 to be deducted at that time in computing the adjusted cost base to the taxpayer of the interest;

(m)  where the property is an interest in a partnership to which section 636 or 645 applies, any amount received by the taxpayer in full or partial satisfaction of that interest;

TRUST

(n)  where the property is a capital interest of the taxpayer in a trust, other than an interest in a personal trust that has never been acquired for consideration or an interest in a trust referred to in subparagraphs a to d of the third paragraph of section 647,

i.  any amount, to the extent that it has become payable before 1 January 1988, paid to the taxpayer by the trust after 31 December 1971 and before the particular time as payment or distribution of capital, otherwise than as proceeds of disposition of the interest or part thereof,

i.1.  any amount that has become payable by the trust to the taxpayer after 31 December 1987 and before the particular time in respect of the interest, otherwise than as proceeds of disposition of the interest or part thereof, except that portion of the amount

(1)  that was included in computing the taxpayer’s income under section 663,

(1.1)  that is deemed to be a dividend received by the taxpayer under section 663.4,

(2)  from which tax was deducted under Part XIII of the Income Tax Act by reason of paragraph c of subsection 1 of section 212 of the said Act, or

(3)  where the trust was resident in Canada throughout its taxation year in which the amount became payable, that was designated by the trust to be payable to the beneficiary under section 667, that is, subject to section 257.4, equal to the amount designated by the trust to be payable to the beneficiary under section 668 or that is an assessable distribution within the meaning of subsection 1 of section 218.3 of the Income Tax Act;

ii.  an amount equal to that portion of all prescribed amounts deducted in computing the tax payable by the taxpayer under a prescribed Act for his taxation years ending before the particular time that may reasonably be attributed to amounts added in respect of the trust under a prescribed provision of the said Act in computing a prescribed amount relating to the taxpayer,

iii.  any amount added pursuant to subsection 3 of section 127.2 of the Income Tax Act in computing his share purchase tax credit for a taxation year ending before or after that time,

iv.  an amount equal to 50% of the amount deemed to be designated pursuant to subsection 3 of section 127.3 of the Income Tax Act before that time in respect of each share, debt obligation or right acquired by the trust and deemed to have been acquired by the taxpayer under that subsection, and

v.  an amount equal to the amount of all assistance received by the taxpayer before that time that has resulted in a reduction of the capital cost of a depreciable property to the trust by virtue of section 101.4;

(o)  where the property is a capital interest in a trust not resident in Canada which the taxpayer purchased after 31 December 1971 and before the particular time from a person not resident in Canada, at a time, in this paragraph referred to as the “acquisition time”, when the property was not taxable Canadian property and the fair market value of the trust property referred to in section 258 was not less than 50% of the fair market value of all the trust property, the proportion of the amount by which such value of the property referred to in that section at the acquisition time exceeds the cost amounts to the trust at the acquisition time of the property that

i.  except where subparagraph ii applies, the fair market value at the acquisition time of the interest is of the fair market value at the acquisition time of all capital interests in the trust, or

ii.  in the case of a unit of a unit trust, the fair market value at the acquisition time of the unit is of the fair market value at the acquisition time of all the issued units of the trust;

(p)  where the property is a capital interest in a trust to which section 596 applies, any amount required by section 597 to be deducted;

(p.1)  where the property is a capital interest of the taxpayer in a designated trust, within the meaning of the first paragraph of section 671.5, the aggregate of all amounts each of which is an amount deducted, in respect of that interest, under section 772.15 in computing the tax payable under this Part by the taxpayer or, where the taxpayer is a partnership, by a member of the partnership, for a taxation year that ended before the particular time;

(q)  where the property is an interest in a segregated fund trust referred to in section 851.2:

i.  each amount in respect of that interest that is a capital loss deemed, under section 851.21, to have been allocated to the taxpayer before the particular time, and

ii.  each amount in respect of that interest that before the particular time was deemed by section 851.16 to have been a capital loss of the taxpayer;

(r)  (paragraph repealed).

1972, c. 23, s. 238; 1973, c. 17, s. 24; 1974, c. 18, s. 14; 1975, c. 22, s. 44; 1977, c. 26, s. 25; 1978, c. 26, s. 44; 1982, c. 5, s. 59; 1984, c. 15, s. 63; 1985, c. 25, s. 46; 1986, c. 19, s. 43; 1987, c. 67, s. 65; 1988, c. 4, s. 29; 1989, c. 77, s. 24; 1990, c. 59, s. 120; 1992, c. 1, s. 29; 1993, c. 16, s. 114; 1993, c. 64, s. 25; 1994, c. 22, s. 124; 1996, c. 39, s. 73; 1997, c. 3, s. 71; 1997, c. 14, s. 55; 1997, c. 31, s. 39; 1998, c. 16, s. 105; 2001, c. 7, s. 32; 2001, c. 53, s. 48; 2003, c. 2, s. 88; 2004, c. 8, s. 50; 2004, c. 21, s. 69; 2006, c. 13, s. 34; 2007, c. 12, s. 45; 2009, c. 5, s. 88; 2009, c. 15, s. 68; 2011, c. 6, s. 123; 2013, c. 10, s. 22; 2015, c. 21, s. 148.

2013-06-05

257. A taxpayer shall, in computing the adjusted cost base of a property at a particular time, deduct the following amounts:

MISCELLANEOUS CASES

(a)  in the case of a property which the taxpayer disposed of in part after 1971 and before the particular time, the amount established under section 254 for such taxpayer;

(b)  where sections 485 to 485.18 apply, the amount by which the adjusted cost base is required to be reduced before the particular time;

(b.1)  any amount required under paragraph c of section 259, paragraph a of any of sections 259.1 to 259.3 and 296.1, subparagraph b.1 of the first paragraph of section 301, subparagraph a of the first paragraph of section 543.2 or paragraph a of section 553.2 to be deducted in computing the adjusted cost base of the property or any amount by which that adjusted cost base is required to be reduced because of any of sections 485.9 to 485.11;

(c)  that part of the cost of the property which is deductible in computing the income, otherwise than because of this Title or of section 75.2.1 or 75.3, for any taxation year beginning before the particular time and ending after 31 December 1971;

(d)  where the property is acquired by the taxpayer after 31 December 1971, the aggregate of

i.  the amount by which any assistance, other than prescribed assistance, that the taxpayer has received or is entitled to receive before the particular time from a government, municipality or other public authority in respect of, or for the acquisition of, the property, whether as a grant, subsidy, forgivable loan, deduction from tax not otherwise provided for under this paragraph, investment allowance or as any other form of assistance, exceeds such part of the assistance as has been repaid by the taxpayer before that time in accordance with an obligation to repay all or any part of that assistance, and

ii.  the amounts, other than a prescribed amount, deducted by the taxpayer in respect of the property before the particular time under subsection 5 or 6 of section 127 of the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)) in computing his tax payable under the said Act;

(e)  where the property was received as consideration for a payment or loan referred to in section 383, as it read in respect of the payment or loan, which the taxpayer made or consented to before 20 April 1983 to a joint exploration corporation, within the meaning of section 382, as a shareholder corporation of such a corporation, in respect of Canadian exploration and development expenses, Canadian exploration expenses, Canadian development expenses or Canadian oil and gas property expenses incurred by the joint exploration corporation, or where the property was substituted for such a property, such portion of the payment or loan as may reasonably be considered to relate to an agreed portion referred to in section 381, 406, 417 or 418.13, as it read in respect of the agreed portion;

(f)  where the property is an indemnity within the meaning of sections 469 to 479, or is deemed to be such an indemnity under those sections, the amount required by subparagraph b of the first paragraph of section 471 to be deducted;

(f.1)  where the property is a debt owing to the taxpayer by a corporation, the amount required by section 511, or sections 517.1 to 517.6 as they applied before 23 May 1985, to be deducted before the particular time in computing the adjusted cost base of that debt;

(f.2)  the amount by which the amount elected by the taxpayer before the particular time under section 257.2 exceeds any repayment before that time by the taxpayer of an amount received by him as described in section 257.2 that may reasonably be considered to relate to the amount elected where the repayment is made pursuant to a legal obligation to repay all or any part of the amount so received;

(f.3)  where the property is property of a corporation control of which was acquired by a person or group of persons at or before that time, any amount required by subparagraph a of the second paragraph of section 736 to be deducted in computing the adjusted cost base of the property;

(f.4)  where the property is a right to acquire a share of the capital stock of a corporation or a unit of a mutual fund trust under an agreement, any amount required by paragraph b of section 1055.1 to be deducted;

(f.5)  where the property was at the end of 22 February 1994 a non-qualifying immovable property of the taxpayer within the meaning assigned by section 726.6.1 as that section applies to the taxation year 1994, any amount required by paragraph b of section 726.9.4 to be deducted in computing the adjusted cost base to the taxpayer of the property;

(f.6)  where the taxpayer elected under section 726.9.2 in respect of the property, any amount required by section 726.9.5 to be deducted in computing the adjusted cost base to the taxpayer of the property at the particular time;

SHARES OF A CORPORATION

(g)  where the property is a share of the capital stock of a corporation resident in Canada,

i.  any amount received by the taxpayer after 31 December 1971 and before the particular time as a dividend other than a taxable dividend or a dividend in respect of which the corporation has elected in accordance with section 502 or 502.1 and section 503 in respect of the full amount thereof,

ii.  any amount required by sections 517.1 to 517.6, as they applied before 23 May 1985, to be deducted before the particular time in computing the adjusted cost base of that share,

iii.  any amount received by the taxpayer after 1971 and before the particular time on a reduction of the paid-up capital of the corporation in respect of that share, except to the extent that that amount is deemed by section 508 to be a dividend received by him,

iv.  any amount, to the extent that such amount is not proceeds of disposition of a share, received by the taxpayer before that particular time that would, but for section 510.1, be deemed by section 508 to be a dividend received by him, and

v.  any amount required by section 280.6 to be deducted in computing the adjusted cost base to the taxpayer of the share;

(h)  where the property is a share of the capital stock of a joint exploration corporation, within the meaning of section 382, resident in Canada to which the taxpayer has, after 31 December 1971, made a contribution of capital otherwise than by way of a loan, which contribution was included in computing the adjusted cost base of the property by virtue of paragraph e of section 255, such portion of the contribution as may reasonably be considered to be part of an agreed portion referred to in section 381, 406, 417 or 418.13, as it read in respect of the agreed portion;

(h.1)  any amount required by section 419.2 to be deducted before that time in computing the adjusted cost base of the property;

(i)  where the property is a share, or an interest therein or a right thereto, of the capital stock of a corporation acquired before 1 August 1976, an amount equal to the expenses incurred by the taxpayer as consideration to acquire the property, to the extent that such expenses are for him Canadian exploration and development expenses under paragraph e of section 364, Canadian exploration expenses under paragraph e of section 395, Canadian development expenses under paragraph e of section 408 or Canadian oil and gas property expenses under paragraph c of section 418.2;

(j)  where the property is a share of the capital stock of a corporation not resident in Canada,

i.  any amount required by subparagraph d of the first paragraph of section 477 and sections 585 to 588 to be deducted, and

ii.  any amount received by the taxpayer after 1971 and before that time on a reduction of the paid-up capital of the corporation in respect of the share;

(j.1)  (paragraph repealed);

DEBT OBLIGATIONS

(k)  where the property is a debt obligation, any amount that was deductible by virtue of sections 167 and 168 for any taxation year commencing before that particular time;

INDEXED DEBT OBLIGATIONS

(k.1)  where the property is an indexed debt obligation,

i.  any amount referred to in paragraph b of section 125.0.1 in respect of the obligation and deductible in computing the income of the taxpayer for a taxation year beginning before the particular time, and

ii.  the amount of any payment that was received or that became receivable by the taxpayer at or before the particular time in respect of an amount that was added under paragraph h.0.1 of section 255 to the cost to the taxpayer of the obligation;

PARTNERSHIP

(l)  when the property is an interest in a partnership,

i.  subject to section 257.2.1, an amount in respect of each fiscal period of the partnership ending after 31 December 1971 and before the particular time, equal to the taxpayer’s share, other than a share under an agreement referred to in section 608, of any loss of the partnership from any source for that fiscal period, computed as if this Part were construed without reference to

(1)  the fraction “1/2” in section 105, as it applied to each fiscal period of the partnership ending before 1 April 1977, and without reference to that or another fraction in sections 107 and 231,

(2)  the reference to the fraction and the letter C in the formula provided for in the first paragraph of section 105.2, and

(3)  paragraph z.4 of section 87, sections 89 to 91, 144, 144.1, 145, 205 to 207, 235, 236.2 to 241, 264, 271, 273, 288, 293, 425, 638.1, 741.2 and 744.1, as it applied to dispositions of property that occurred before 27 April 1995, paragraph j of section 157, as it read before being struck out, Division XV of Chapter IV and paragraphs g and h of section 489, as they read before being struck out,

i.1.  an amount in respect of each fiscal period of the partnership ending before the particular time that is the taxpayer’s limited partnership loss in respect of the partnership for the taxation year in which that fiscal period ends to the extent that such loss was deducted by the taxpayer in computing his taxable income for any taxation year that commenced before the particular time,

i.2.  any amount deemed by section 261.2 to be a loss of the taxpayer,

i.3.  where at the particular time the property is not a tax shelter investment as defined in section 851.38 and the taxpayer would be a member described in section 261.1 of the partnership if the fiscal period of the partnership that includes that time ended at that time, the unpaid principal amount of any indebtedness of the taxpayer for which recourse is limited, either immediately or in the future and either absolutely or contingently, and that may reasonably be considered to have been used to acquire the property,

i.4.  unless the particular time immediately precedes a disposition of the interest, if the taxpayer is a member of the partnership and the taxpayer has been a specified member of the partnership at all times since becoming a member of the partnership, or the taxpayer is at the particular time a limited partner of the partnership for the purposes of section 261.1,

(1)  where the particular time is in the taxpayer’s first taxation year for which the taxpayer is eligible to deduct an amount in respect of the partnership under section 217.27, the portion of the amount deducted in computing the taxpayer’s income for the taxation year under section 217.27 in respect of the partnership that would be deductible if the definition of “qualifying transitional income” in the first paragraph of section 217.18 were read without reference to its paragraph b, and

(2)  where the particular time is in any other taxation year, the portion of the amount deducted under section 217.27 in computing the taxpayer’s income for the taxation year preceding that other taxation year in respect of the partnership that would be deductible if the definition of “qualifying transitional income” in the first paragraph of section 217.18 were read without reference to its paragraph b,

ii.  an amount with respect to each fiscal period of the partnership ending after 31 December 1971 and before the particular time, except a fiscal period subsequent to that in which the taxpayer ceased to be a member of the partnership, equal to the share of the taxpayer in the aggregate of Canadian exploration and development expenses, foreign resource pool expenses, Canadian exploration expenses, Canadian development expenses and Canadian oil and gas property expenses incurred by the partnership in the fiscal period and the amounts which, but for paragraph d of section 600, would be deductible in computing the income of the partnership for the fiscal period under the Act respecting the application of the Taxation Act (chapter I-4) in respect of exploration and development expenses,

ii.1.  where the taxpayer is a corporation or an individual, an amount in respect of each fiscal period of the partnership ending before the particular time, other than a fiscal period subsequent to that in which the taxpayer ceased to be a member of the partnership, equal to the taxpayer’s share of the aggregate of all amounts each of which would, but for section 134.2, be deductible in computing the partnership’s income for the fiscal period as dues described in subparagraph a or b of the first paragraph of that section or as a contribution described in subparagraph c of that paragraph,

iii.  any amount deemed, under section 714 or 752.0.10.11, to be the eligible amount of a gift made by the taxpayer as a member of the partnership at the end of any fiscal period of the partnership ending before that time, or in relation to another partnership of which the taxpayer is deemed to be a member under section 693.2 or the second paragraph of section 752.0.10.11 because the taxpayer is a member of the partnership at the end of such a fiscal period,

iv.  every amount received by the taxpayer, after 1971 and before the particular time, as a payment or distribution of his share in the profits or capital of the partnership other than a share under an agreement referred to in section 608,

v.  any amount required by sections 614 to 617 to be deducted before that particular time in computing the adjusted cost base to him of his interest in the partnership,

vi.  an amount equal to that portion of all prescribed amounts deducted in computing the tax otherwise payable by the taxpayer under a prescribed Act for his taxation years ending before that particular time that may reasonably be attributed to amounts added in respect of the partnership under a prescribed provision of the said Act in computing a prescribed amount relating to the taxpayer,

vii.  any amount added pursuant to subsection 4 of section 127.2 of the Income Tax Act in computing his share purchase tax credit for a taxation year ending before or after that time,

viii.  an amount equal to 50% of the amount deemed to be designated pursuant to subsection 4 of section 127.3 of the Income Tax Act before that time in respect of each share, debt obligation or right acquired by the partnership and deemed to have been acquired by the taxpayer under that subsection,

ix.  an amount equal to the amount of all assistance received by the taxpayer before that time that has resulted in a reduction of the capital cost of a depreciable property to the partnership by virtue of section 101.4,

x.  any amount deductible by the taxpayer under section 147.2 or 176.3 in respect of the partnership for a taxation year of the taxpayer ending at or after that time,

xi.  any amount added, before the particular time, to the issue base relating to certain issue expenses, within the meaning of section 726.4.17.11, of the taxpayer and determined by reference to an amount included in an amount referred to in subparagraph ii in respect of the taxpayer regarding the partnership, and

xii.  any amount required by subparagraph b of the first paragraph of section 726.9.6 to be deducted at that time in computing the adjusted cost base to the taxpayer of the interest;

(m)  where the property is an interest in a partnership to which section 636 or 645 applies, any amount received by the taxpayer in full or partial satisfaction of that interest;

TRUST

(n)  where the property is a capital interest of the taxpayer in a trust, other than an interest in a personal trust that has never been acquired for consideration or an interest in a trust referred to in subparagraphs a to d of the third paragraph of section 647,

i.  any amount, to the extent that it has become payable before 1 January 1988, paid to the taxpayer by the trust after 31 December 1971 and before the particular time as payment or distribution of capital, otherwise than as proceeds of disposition of the interest or part thereof,

i.1.  any amount that has become payable by the trust to the taxpayer after 31 December 1987 and before the particular time in respect of the interest, otherwise than as proceeds of disposition of the interest or part thereof, except that portion of the amount

(1)  that was included in computing the taxpayer’s income under section 663,

(1.1)  that is deemed to be a dividend received by the taxpayer under section 663.4,

(2)  from which tax was deducted under Part XIII of the Income Tax Act by reason of paragraph c of subsection 1 of section 212 of the said Act, or

(3)  where the trust was resident in Canada throughout its taxation year in which the amount became payable, that was designated by the trust to be payable to the beneficiary under section 667, that is, subject to section 257.4, equal to the amount designated by the trust to be payable to the beneficiary under section 668 or that is an assessable distribution within the meaning of subsection 1 of section 218.3 of the Income Tax Act;

ii.  an amount equal to that portion of all prescribed amounts deducted in computing the tax payable by the taxpayer under a prescribed Act for his taxation years ending before the particular time that may reasonably be attributed to amounts added in respect of the trust under a prescribed provision of the said Act in computing a prescribed amount relating to the taxpayer,

iii.  any amount added pursuant to subsection 3 of section 127.2 of the Income Tax Act in computing his share purchase tax credit for a taxation year ending before or after that time,

iv.  an amount equal to 50% of the amount deemed to be designated pursuant to subsection 3 of section 127.3 of the Income Tax Act before that time in respect of each share, debt obligation or right acquired by the trust and deemed to have been acquired by the taxpayer under that subsection, and

v.  an amount equal to the amount of all assistance received by the taxpayer before that time that has resulted in a reduction of the capital cost of a depreciable property to the trust by virtue of section 101.4;

(o)  where the property is a capital interest in a trust not resident in Canada which the taxpayer purchased after 31 December 1971 and before the particular time from a person not resident in Canada, at a time, in this paragraph referred to as the “acquisition time”, when the property was not taxable Canadian property and the fair market value of the trust property referred to in section 258 was not less than 50% of the fair market value of all the trust property, the proportion of the amount by which such value of the property referred to in that section at the acquisition time exceeds the cost amounts to the trust at the acquisition time of the property that

i.  except where subparagraph ii applies, the fair market value at the acquisition time of the interest is of the fair market value at the acquisition time of all capital interests in the trust, or

ii.  in the case of a unit of a unit trust, the fair market value at the acquisition time of the unit is of the fair market value at the acquisition time of all the issued units of the trust;

(p)  where the property is a capital interest in a trust to which section 596 applies, any amount required by section 597 to be deducted;

(p.1)  where the property is a capital interest of the taxpayer in a designated trust, within the meaning of the first paragraph of section 671.5, the aggregate of all amounts each of which is an amount deducted, in respect of that interest, under section 772.15 in computing the tax payable under this Part by the taxpayer or, where the taxpayer is a partnership, by a member of the partnership, for a taxation year that ended before the particular time;

(q)  where the property is an interest in a segregated fund trust referred to in section 851.2:

i.  each amount in respect of that interest that is a capital loss deemed, under section 851.21, to have been allocated to the taxpayer before the particular time, and

ii.  each amount in respect of that interest that before the particular time was deemed by section 851.16 to have been a capital loss of the taxpayer;

(r)  (paragraph repealed).

1972, c. 23, s. 238; 1973, c. 17, s. 24; 1974, c. 18, s. 14; 1975, c. 22, s. 44; 1977, c. 26, s. 25; 1978, c. 26, s. 44; 1982, c. 5, s. 59; 1984, c. 15, s. 63; 1985, c. 25, s. 46; 1986, c. 19, s. 43; 1987, c. 67, s. 65; 1988, c. 4, s. 29; 1989, c. 77, s. 24; 1990, c. 59, s. 120; 1992, c. 1, s. 29; 1993, c. 16, s. 114; 1993, c. 64, s. 25; 1994, c. 22, s. 124; 1996, c. 39, s. 73; 1997, c. 3, s. 71; 1997, c. 14, s. 55; 1997, c. 31, s. 39; 1998, c. 16, s. 105; 2001, c. 7, s. 32; 2001, c. 53, s. 48; 2003, c. 2, s. 88; 2004, c. 8, s. 50; 2004, c. 21, s. 69; 2006, c. 13, s. 34; 2007, c. 12, s. 45; 2009, c. 5, s. 88; 2009, c. 15, s. 68; 2011, c. 6, s. 123; 2013, c. 10, s. 22.

2011-06-06

257. A taxpayer shall, in computing the adjusted cost base of a property at a particular time, deduct the following amounts:

MISCELLANEOUS CASES

(a)  in the case of a property which the taxpayer disposed of in part after 1971 and before the particular time, the amount established under section 254 for such taxpayer;

(b)  where sections 485 to 485.18 apply, the amount by which the adjusted cost base is required to be reduced before the particular time;

(b.1)  any amount required under paragraph c of section 259, paragraph a of any of sections 259.1 to 259.3 and 296.1, subparagraph b.1 of the first paragraph of section 301, subparagraph a of the first paragraph of section 543.2 or paragraph a of section 553.2 to be deducted in computing the adjusted cost base of the property or any amount by which that adjusted cost base is required to be reduced because of any of sections 485.9 to 485.11;

(c)  that part of the cost of the property which is deductible in computing the income, otherwise than because of this Title or of section 75.2.1 or 75.3, for any taxation year beginning before the particular time and ending after 31 December 1971;

(d)  where the property is acquired by the taxpayer after 31 December 1971, the aggregate of

i.  the amount by which any assistance, other than prescribed assistance, that the taxpayer has received or is entitled to receive before the particular time from a government, municipality or other public authority in respect of, or for the acquisition of, the property, whether as a grant, subsidy, forgivable loan, deduction from tax not otherwise provided for under this paragraph, investment allowance or as any other form of assistance, exceeds such part of the assistance as has been repaid by the taxpayer before that time in accordance with an obligation to repay all or any part of that assistance, and

ii.  the amounts, other than a prescribed amount, deducted by the taxpayer in respect of the property before the particular time under subsection 5 or 6 of section 127 of the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)) in computing his tax payable under the said Act;

(e)  where the property was received as consideration for a payment or loan referred to in section 383, as it read in respect of the payment or loan, which the taxpayer made or consented to before 20 April 1983 to a joint exploration corporation, within the meaning of section 382, as a shareholder corporation of such a corporation, in respect of Canadian exploration and development expenses, Canadian exploration expenses, Canadian development expenses or Canadian oil and gas property expenses incurred by the joint exploration corporation, or where the property was substituted for such a property, such portion of the payment or loan as may reasonably be considered to relate to an agreed portion referred to in section 381, 406, 417 or 418.13, as it read in respect of the agreed portion;

(f)  where the property is an indemnity within the meaning of sections 469 to 479, or is deemed to be such an indemnity under those sections, the amount required by subparagraph b of the first paragraph of section 471 to be deducted;

(f.1)  where the property is a debt owing to the taxpayer by a corporation, the amount required by section 511, or sections 517.1 to 517.6 as they applied before 23 May 1985, to be deducted before the particular time in computing the adjusted cost base of that debt;

(f.2)  the amount by which the amount elected by the taxpayer before the particular time under section 257.2 exceeds any repayment before that time by the taxpayer of an amount received by him as described in section 257.2 that may reasonably be considered to relate to the amount elected where the repayment is made pursuant to a legal obligation to repay all or any part of the amount so received;

(f.3)  where the property is property of a corporation control of which was acquired by a person or group of persons at or before that time, any amount required by subparagraph a of the second paragraph of section 736 to be deducted in computing the adjusted cost base of the property;

(f.4)  where the property is a right to acquire a share of the capital stock of a corporation or a unit of a mutual fund trust under an agreement, any amount required by paragraph b of section 1055.1 to be deducted;

(f.5)  where the property was at the end of 22 February 1994 a non-qualifying immovable property of the taxpayer within the meaning assigned by section 726.6.1 as that section applies to the taxation year 1994, any amount required by paragraph b of section 726.9.4 to be deducted in computing the adjusted cost base to the taxpayer of the property;

(f.6)  where the taxpayer elected under section 726.9.2 in respect of the property, any amount required by section 726.9.5 to be deducted in computing the adjusted cost base to the taxpayer of the property at the particular time;

SHARES OF A CORPORATION

(g)  where the property is a share of the capital stock of a corporation resident in Canada,

i.  any amount received by the taxpayer after 31 December 1971 and before the particular time as a dividend other than a taxable dividend or a dividend in respect of which the corporation has elected in accordance with section 502 or 502.1 and section 503 in respect of the full amount thereof,

ii.  any amount required by sections 517.1 to 517.6, as they applied before 23 May 1985, to be deducted before the particular time in computing the adjusted cost base of that share,

iii.  any amount received by the taxpayer after 1971 and before the particular time on a reduction of the paid-up capital of the corporation in respect of that share, except to the extent that that amount is deemed by section 508 to be a dividend received by him,

iv.  any amount, to the extent that such amount is not proceeds of disposition of a share, received by the taxpayer before that particular time that would, but for section 510.1, be deemed by section 508 to be a dividend received by him, and

v.  any amount required by section 280.6 to be deducted in computing the adjusted cost base to the taxpayer of the share;

(h)  where the property is a share of the capital stock of a joint exploration corporation, within the meaning of section 382, resident in Canada to which the taxpayer has, after 31 December 1971, made a contribution of capital otherwise than by way of a loan, which contribution was included in computing the adjusted cost base of the property by virtue of paragraph e of section 255, such portion of the contribution as may reasonably be considered to be part of an agreed portion referred to in section 381, 406, 417 or 418.13, as it read in respect of the agreed portion;

(h.1)  any amount required by section 419.2 to be deducted before that time in computing the adjusted cost base of the property;

(i)  where the property is a share, or an interest therein or a right thereto, of the capital stock of a corporation acquired before 1 August 1976, an amount equal to the expenses incurred by the taxpayer as consideration to acquire the property, to the extent that such expenses are for him Canadian exploration and development expenses under paragraph e of section 364, Canadian exploration expenses under paragraph e of section 395, Canadian development expenses under paragraph e of section 408 or Canadian oil and gas property expenses under paragraph c of section 418.2;

(j)  where the property is a share of the capital stock of a corporation not resident in Canada,

i.  any amount required by subparagraph d of the first paragraph of section 477 and sections 585 to 588 to be deducted, and

ii.  any amount received by the taxpayer after 1971 and before that time on a reduction of the paid-up capital of the corporation in respect of the share;

(j.1)  (paragraph repealed);

DEBT OBLIGATIONS

(k)  where the property is a debt obligation, any amount that was deductible by virtue of sections 167 and 168 for any taxation year commencing before that particular time;

INDEXED DEBT OBLIGATIONS

(k.1)  where the property is an indexed debt obligation,

i.  any amount referred to in paragraph b of section 125.0.1 in respect of the obligation and deductible in computing the income of the taxpayer for a taxation year beginning before the particular time, and

ii.  the amount of any payment that was received or that became receivable by the taxpayer at or before the particular time in respect of an amount that was added under paragraph h.0.1 of section 255 to the cost to the taxpayer of the obligation;

PARTNERSHIP

(l)  when the property is an interest in a partnership,

i.  subject to section 257.2.1, an amount in respect of each fiscal period of the partnership ending after 31 December 1971 and before the particular time, equal to the taxpayer’s share, other than a share under an agreement referred to in section 608, of any loss of the partnership from any source for that fiscal period, computed as if this Part were construed without reference to

(1)  the fraction “1/2” in section 105, as it applied to each fiscal period of the partnership ending before 1 April 1977, and without reference to that or another fraction in sections 107 and 231,

(2)  the reference to the fraction and the letter C in the formula provided for in the first paragraph of section 105.2, and

(3)  paragraph z.4 of section 87, sections 89 to 91, 144, 144.1, 145, 205 to 207, 235, 236.2 to 241, 264, 271, 273, 288, 293, 425, 638.1, 741.2 and 744.1, as it applied to dispositions of property that occurred before 27 April 1995, paragraph j of section 157, as it read before being struck out, Division XV of Chapter IV and paragraphs g and h of section 489, as they read before being struck out,

i.1.  an amount in respect of each fiscal period of the partnership ending before the particular time that is the taxpayer’s limited partnership loss in respect of the partnership for the taxation year in which that fiscal period ends to the extent that such loss was deducted by the taxpayer in computing his taxable income for any taxation year that commenced before the particular time,

i.2.  any amount deemed by section 261.2 to be a loss of the taxpayer,

i.3.  where at the particular time the property is not a tax shelter investment as defined in section 851.38 and the taxpayer would be a member described in section 261.1 of the partnership if the fiscal period of the partnership that includes that time ended at that time, the unpaid principal amount of any indebtedness of the taxpayer for which recourse is limited, either immediately or in the future and either absolutely or contingently, and that may reasonably be considered to have been used to acquire the property,

i.4.  if the taxpayer is a member of the partnership who was a specified member of the partnership at all times since becoming a member of the partnership or the taxpayer is at the particular time a limited partner of the partnership for the purposes of section 261.1, the amount

(1)  deducted under section 217.13 in computing the taxpayer’s income for the taxation year in respect of the interest, where the particular time is in the taxpayer’s first taxation year in which a qualifying fiscal period, within the meaning of the first paragraph of section 217.10, of the business carried on by the taxpayer as a member of the partnership ends and is after the end of that period, and

(2)  where the particular time is in any other taxation year, deducted under section 217.13 in respect of the interest in computing the taxpayer’s income for the taxation year preceding that other year,

ii.  an amount with respect to each fiscal period of the partnership ending after 31 December 1971 and before the particular time, except a fiscal period subsequent to that in which the taxpayer ceased to be a member of the partnership, equal to the share of the taxpayer in the aggregate of Canadian exploration and development expenses, foreign resource pool expenses, Canadian exploration expenses, Canadian development expenses and Canadian oil and gas property expenses incurred by the partnership in the fiscal period and the amounts which, but for paragraph d of section 600, would be deductible in computing the income of the partnership for the fiscal period under the Act respecting the application of the Taxation Act (chapter I-4) in respect of exploration and development expenses,

ii.1.  where the taxpayer is a corporation or an individual, an amount in respect of each fiscal period of the partnership ending before the particular time, other than a fiscal period subsequent to that in which the taxpayer ceased to be a member of the partnership, equal to the taxpayer’s share of the aggregate of all amounts each of which would, but for section 134.2, be deductible in computing the partnership’s income for the fiscal period as dues described in subparagraph a or b of the first paragraph of that section or as a contribution described in subparagraph c of that paragraph,

iii.  any amount deemed, under section 714 or 752.0.10.11, to be the eligible amount of a gift made by the taxpayer as a member of the partnership at the end of any fiscal period of the partnership ending before that time, or in relation to another partnership of which the taxpayer is deemed to be a member under section 693.2 or the second paragraph of section 752.0.10.11 because the taxpayer is a member of the partnership at the end of such a fiscal period,

iv.  every amount received by the taxpayer, after 1971 and before the particular time, as a payment or distribution of his share in the profits or capital of the partnership other than a share under an agreement referred to in section 608,

v.  any amount required by sections 614 to 617 to be deducted before that particular time in computing the adjusted cost base to him of his interest in the partnership,

vi.  an amount equal to that portion of all prescribed amounts deducted in computing the tax otherwise payable by the taxpayer under a prescribed Act for his taxation years ending before that particular time that may reasonably be attributed to amounts added in respect of the partnership under a prescribed provision of the said Act in computing a prescribed amount relating to the taxpayer,

vii.  any amount added pursuant to subsection 4 of section 127.2 of the Income Tax Act in computing his share purchase tax credit for a taxation year ending before or after that time,

viii.  an amount equal to 50% of the amount deemed to be designated pursuant to subsection 4 of section 127.3 of the Income Tax Act before that time in respect of each share, debt obligation or right acquired by the partnership and deemed to have been acquired by the taxpayer under that subsection,

ix.  an amount equal to the amount of all assistance received by the taxpayer before that time that has resulted in a reduction of the capital cost of a depreciable property to the partnership by virtue of section 101.4,

x.  any amount deductible by the taxpayer under section 147.2 or 176.3 in respect of the partnership for a taxation year of the taxpayer ending at or after that time,

xi.  any amount added, before the particular time, to the issue base relating to certain issue expenses, within the meaning of section 726.4.17.11, of the taxpayer and determined by reference to an amount included in an amount referred to in subparagraph ii in respect of the taxpayer regarding the partnership, and

xii.  any amount required by subparagraph b of the first paragraph of section 726.9.6 to be deducted at that time in computing the adjusted cost base to the taxpayer of the interest;

(m)  where the property is an interest in a partnership to which section 636 or 645 applies, any amount received by the taxpayer in full or partial satisfaction of that interest;

TRUST

(n)  where the property is a capital interest of the taxpayer in a trust, other than an interest in a personal trust that has never been acquired for consideration or an interest in a trust referred to in subparagraphs a to d of the third paragraph of section 647,

i.  any amount, to the extent that it has become payable before 1 January 1988, paid to the taxpayer by the trust after 31 December 1971 and before the particular time as payment or distribution of capital, otherwise than as proceeds of disposition of the interest or part thereof,

i.1.  any amount that has become payable by the trust to the taxpayer after 31 December 1987 and before the particular time in respect of the interest, otherwise than as proceeds of disposition of the interest or part thereof, except that portion of the amount

(1)  that was included in computing the taxpayer’s income under section 663,

(1.1)  that is deemed to be a dividend received by the taxpayer under section 663.4,

(2)  from which tax was deducted under Part XIII of the Income Tax Act by reason of paragraph c of subsection 1 of section 212 of the said Act, or

(3)  where the trust was resident in Canada throughout its taxation year in which the amount became payable, that was designated by the trust to be payable to the beneficiary under section 667, that is, subject to section 257.4, equal to the amount designated by the trust to be payable to the beneficiary under section 668 or that is an assessable distribution within the meaning of subsection 1 of section 218.3 of the Income Tax Act;

ii.  an amount equal to that portion of all prescribed amounts deducted in computing the tax payable by the taxpayer under a prescribed Act for his taxation years ending before the particular time that may reasonably be attributed to amounts added in respect of the trust under a prescribed provision of the said Act in computing a prescribed amount relating to the taxpayer,

iii.  any amount added pursuant to subsection 3 of section 127.2 of the Income Tax Act in computing his share purchase tax credit for a taxation year ending before or after that time,

iv.  an amount equal to 50% of the amount deemed to be designated pursuant to subsection 3 of section 127.3 of the Income Tax Act before that time in respect of each share, debt obligation or right acquired by the trust and deemed to have been acquired by the taxpayer under that subsection, and

v.  an amount equal to the amount of all assistance received by the taxpayer before that time that has resulted in a reduction of the capital cost of a depreciable property to the trust by virtue of section 101.4;

(o)  where the property is a capital interest in a trust not resident in Canada which the taxpayer purchased after 31 December 1971 and before the particular time from a person not resident in Canada, at a time, in this paragraph referred to as the “acquisition time”, when the property was not taxable Canadian property and the fair market value of the trust property referred to in section 258 was not less than 50% of the fair market value of all the trust property, the proportion of the amount by which such value of the property referred to in that section at the acquisition time exceeds the cost amounts to the trust at the acquisition time of the property that

i.  except where subparagraph ii applies, the fair market value at the acquisition time of the interest is of the fair market value at the acquisition time of all capital interests in the trust, or

ii.  in the case of a unit of a unit trust, the fair market value at the acquisition time of the unit is of the fair market value at the acquisition time of all the issued units of the trust;

(p)  where the property is a capital interest in a trust to which section 596 applies, any amount required by section 597 to be deducted;

(p.1)  where the property is a capital interest of the taxpayer in a designated trust, within the meaning of the first paragraph of section 671.5, the aggregate of all amounts each of which is an amount deducted, in respect of that interest, under section 772.15 in computing the tax payable under this Part by the taxpayer or, where the taxpayer is a partnership, by a member of the partnership, for a taxation year that ended before the particular time;

(q)  where the property is an interest in a segregated fund trust referred to in section 851.2:

i.  each amount in respect of that interest that is a capital loss deemed, under section 851.21, to have been allocated to the taxpayer before the particular time, and

ii.  each amount in respect of that interest that before the particular time was deemed by section 851.16 to have been a capital loss of the taxpayer;

(r)  (paragraph repealed).

1972, c. 23, s. 238; 1973, c. 17, s. 24; 1974, c. 18, s. 14; 1975, c. 22, s. 44; 1977, c. 26, s. 25; 1978, c. 26, s. 44; 1982, c. 5, s. 59; 1984, c. 15, s. 63; 1985, c. 25, s. 46; 1986, c. 19, s. 43; 1987, c. 67, s. 65; 1988, c. 4, s. 29; 1989, c. 77, s. 24; 1990, c. 59, s. 120; 1992, c. 1, s. 29; 1993, c. 16, s. 114; 1993, c. 64, a. 25; 1994, c. 22, s. 124; 1996, c. 39, s. 73; 1997, c. 3, s. 71; 1997, c. 14, s. 55; 1997, c. 31, s. 39; 1998, c. 16, s. 105; 2001, c. 7, s. 32; 2001, c. 53, s. 48; 2003, c. 2, s. 88; 2004, c. 8, s. 50; 2004, c. 21, s. 69; 2006, c. 13, s. 34; 2007, c. 12, s. 45; 2009, c. 5, s. 88; 2009, c. 15, s. 68; 2011, c. 6, s. 123.

2009-06-04

257. A taxpayer shall, in computing the adjusted cost base of a property at a particular time, deduct the following amounts:

MISCELLANEOUS CASES

(a)  in the case of a property which the taxpayer disposed of in part after 1971 and before the particular time, the amount established under section 254 for such taxpayer;

(b)  where sections 485 to 485.18 apply, the amount by which the adjusted cost base is required to be reduced before the particular time;

(b.1)  any amount required under paragraph c of section 259, paragraph a of any of sections 259.1 to 259.3 and 296.1, subparagraph b.1 of the first paragraph of section 301, subparagraph a of the first paragraph of section 543.2 or paragraph a of section 553.2 to be deducted in computing the adjusted cost base of the property or any amount by which that adjusted cost base is required to be reduced because of any of sections 485.9 to 485.11;

(c)  that part of the cost of the property which is deductible in computing the income, otherwise than because of this Title or of section 75.2.1 or 75.3, for any taxation year beginning before the particular time and ending after 31 December 1971;

(d)  where the property is acquired by the taxpayer after 31 December 1971, the aggregate of

i.  the amount by which any assistance, other than prescribed assistance, that the taxpayer has received or is entitled to receive before the particular time from a government, municipality or other public authority in respect of, or for the acquisition of, the property, whether as a grant, subsidy, forgivable loan, deduction from tax not otherwise provided for under this paragraph, investment allowance or as any other form of assistance, exceeds such part of the assistance as has been repaid by the taxpayer before that time in accordance with an obligation to repay all or any part of that assistance, and

ii.  the amounts, other than a prescribed amount, deducted by the taxpayer in respect of the property before the particular time under subsection 5 or 6 of section 127 of the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)) in computing his tax payable under the said Act;

(e)  where the property was received as consideration for a payment or loan referred to in section 383, as it read in respect of the payment or loan, which the taxpayer made or consented to before 20 April 1983 to a joint exploration corporation, within the meaning of section 382, as a shareholder corporation of such a corporation, in respect of Canadian exploration and development expenses, Canadian exploration expenses, Canadian development expenses or Canadian oil and gas property expenses incurred by the joint exploration corporation, or where the property was substituted for such a property, such portion of the payment or loan as may reasonably be considered to relate to an agreed portion referred to in section 381, 406, 417 or 418.13, as it read in respect of the agreed portion;

(f)  where the property is an indemnity within the meaning of sections 469 to 479, or is deemed to be such an indemnity under those sections, the amount required by subparagraph b of the first paragraph of section 471 to be deducted;

(f.1)  where the property is a debt owing to the taxpayer by a corporation, the amount required by section 511, or sections 517.1 to 517.6 as they applied before 23 May 1985, to be deducted before the particular time in computing the adjusted cost base of that debt;

(f.2)  the amount by which the amount elected by the taxpayer before the particular time under section 257.2 exceeds any repayment before that time by the taxpayer of an amount received by him as described in section 257.2 that may reasonably be considered to relate to the amount elected where the repayment is made pursuant to a legal obligation to repay all or any part of the amount so received;

(f.3)  where the property is property of a corporation control of which was acquired by a person or group of persons at or before that time, any amount required by subparagraph a of the second paragraph of section 736 to be deducted in computing the adjusted cost base of the property;

(f.4)  where the property is a right to acquire a share of the capital stock of a corporation or a unit of a mutual fund trust under an agreement, any amount required by paragraph b of section 1055.1 to be deducted;

(f.5)  where the property was at the end of 22 February 1994 a non-qualifying immovable property of the taxpayer within the meaning assigned by section 726.6.1 as that section applies to the taxation year 1994, any amount required by paragraph b of section 726.9.4 to be deducted in computing the adjusted cost base to the taxpayer of the property;

(f.6)  where the taxpayer elected under section 726.9.2 in respect of the property, any amount required by section 726.9.5 to be deducted in computing the adjusted cost base to the taxpayer of the property at the particular time;

SHARES OF A CORPORATION

(g)  where the property is a share of the capital stock of a corporation resident in Canada,

i.  any amount received by the taxpayer after 31 December 1971 and before the particular time as a dividend other than a taxable dividend or a dividend in respect of which the corporation has elected in accordance with section 502 or 502.1 and section 503 in respect of the full amount thereof,

ii.  any amount required by sections 517.1 to 517.6, as they applied before 23 May 1985, to be deducted before the particular time in computing the adjusted cost base of that share,

iii.  any amount received by the taxpayer after 1971 and before the particular time on a reduction of the paid-up capital of the corporation in respect of that share, except to the extent that that amount is deemed by section 508 to be a dividend received by him,

iv.  any amount, to the extent that such amount is not proceeds of disposition of a share, received by the taxpayer before that particular time that would, but for section 510.1, be deemed by section 508 to be a dividend received by him, and

v.  any amount required by section 280.6 to be deducted in computing the adjusted cost base to the taxpayer of the share;

(h)  where the property is a share of the capital stock of a joint exploration corporation, within the meaning of section 382, resident in Canada to which the taxpayer has, after 31 December 1971, made a contribution of capital otherwise than by way of a loan, which contribution was included in computing the adjusted cost base of the property by virtue of paragraph e of section 255, such portion of the contribution as may reasonably be considered to be part of an agreed portion referred to in section 381, 406, 417 or 418.13, as it read in respect of the agreed portion;

(h.1)  any amount required by section 419.2 to be deducted before that time in computing the adjusted cost base of the property;

(i)  where the property is a share, or an interest therein or a right thereto, of the capital stock of a corporation acquired before 1 August 1976, an amount equal to the expenses incurred by the taxpayer as consideration to acquire the property, to the extent that such expenses are for him Canadian exploration and development expenses under paragraph e of section 364, Canadian exploration expenses under paragraph e of section 395, Canadian development expenses under paragraph e of section 408 or Canadian oil and gas property expenses under paragraph c of section 418.2;

(j)  where the property is a share of the capital stock of a corporation not resident in Canada,

i.  any amount required by subparagraph d of the first paragraph of section 477 and sections 585 to 588 to be deducted, and

ii.  any amount received by the taxpayer after 1971 and before that time on a reduction of the paid-up capital of the corporation in respect of the share;

(j.1)  (paragraph repealed);

DEBT OBLIGATIONS

(k)  where the property is a debt obligation, any amount that was deductible by virtue of sections 167 and 168 for any taxation year commencing before that particular time;

INDEXED DEBT OBLIGATIONS

(k.1)  where the property is an indexed debt obligation,

i.  any amount referred to in paragraph b of section 125.0.1 in respect of the obligation and deductible in computing the income of the taxpayer for a taxation year beginning before the particular time, and

ii.  the amount of any payment that was received or that became receivable by the taxpayer at or before the particular time in respect of an amount that was added under paragraph h.0.1 of section 255 to the cost to the taxpayer of the obligation;

PARTNERSHIP

(l)  when the property is an interest in a partnership,

i.  subject to section 257.2.1, an amount in respect of each fiscal period of the partnership ending after 31 December 1971 and before the particular time, equal to the taxpayer’s share, other than a share under an agreement referred to in section 608, of any loss of the partnership from any source for that fiscal period, computed as if this Part were construed without reference to

(1)  the fraction “1/2” in section 105, as it applied to each fiscal period of the partnership ending before 1 April 1977, and without reference to that or another fraction in sections 107 and 231,

(2)  the reference to the fraction and the letter C in the formula provided for in the first paragraph of section 105.2, and

(3)  paragraph z.4 of section 87, sections 89 to 91, 144, 144.1, 145, 205 to 207, 235, 236.2 to 241, 264, 271, 273, 288, 293, 425, 638.1, 741.2 and 744.1, as it applied to dispositions of property that occurred before 27 April 1995, paragraph j of section 157, as it read before being struck out, Division XV of Chapter IV and paragraphs g and h of section 489, as they read before being struck out,

i.1.  an amount in respect of each fiscal period of the partnership ending before the particular time that is the taxpayer’s limited partnership loss in respect of the partnership for the taxation year in which that fiscal period ends to the extent that such loss was deducted by the taxpayer in computing his taxable income for any taxation year that commenced before the particular time,

i.2.  any amount deemed by section 261.2 to be a loss of the taxpayer,

i.3.  where at the particular time the property is not a tax shelter investment as defined in section 851.38 and the taxpayer would be a member described in section 261.1 of the partnership if the fiscal period of the partnership that includes that time ended at that time, the unpaid principal amount of any indebtedness of the taxpayer for which recourse is limited, either immediately or in the future and either absolutely or contingently, and that may reasonably be considered to have been used to acquire the property,

i.4.  if the taxpayer is a member of the partnership who was a specified member of the partnership at all times since becoming a member of the partnership or the taxpayer is at the particular time a limited partner of the partnership for the purposes of section 261.1, the amount

(1)  deducted under section 217.13 in computing the taxpayer’s income for the taxation year in respect of the interest, where the particular time is in the taxpayer’s first taxation year in which a qualifying fiscal period, within the meaning of the first paragraph of section 217.10, of the business carried on by the taxpayer as a member of the partnership ends and is after the end of that period, and

(2)  where the particular time is in any other taxation year, deducted under section 217.13 in respect of the interest in computing the taxpayer’s income for the taxation year preceding that other year,

ii.  an amount with respect to each fiscal period of the partnership ending after 31 December 1971 and before the particular time, except a fiscal period subsequent to that in which the taxpayer ceased to be a member of the partnership, equal to the share of the taxpayer in the aggregate of Canadian exploration and development expenses, foreign resource pool expenses, Canadian exploration expenses, Canadian development expenses and Canadian oil and gas property expenses incurred by the partnership in the fiscal period and the amounts which, but for paragraph d of section 600, would be deductible in computing the income of the partnership for the fiscal period under the Act respecting the application of the Taxation Act (chapter I-4) in respect of exploration and development expenses,

ii.1.  where the taxpayer is a corporation or an individual, an amount in respect of each fiscal period of the partnership ending before the particular time, other than a fiscal period subsequent to that in which the taxpayer ceased to be a member of the partnership, equal to the taxpayer’s share of the aggregate of all amounts each of which would, but for section 134.2, be deductible in computing the partnership’s income for the fiscal period as dues described in subparagraph a or b of the first paragraph of that section or as a contribution described in subparagraph c of that paragraph,

iii.  any amount deemed, under section 714 or 752.0.10.11, to be the eligible amount of a gift made by the taxpayer as a member of the partnership at the end of any fiscal period of the partnership ending before that time, or in relation to another partnership of which the taxpayer is deemed to be a member under section 693.2 or the second paragraph of section 752.0.10.11 because the taxpayer is a member of the partnership at the end of such a fiscal period,

iv.  every amount received by the taxpayer, after 1971 and before the particular time, as a payment or distribution of his share in the profits or capital of the partnership other than a share under an agreement referred to in section 608,

v.  any amount required by sections 614 to 617 to be deducted before that particular time in computing the adjusted cost base to him of his interest in the partnership,

vi.  an amount equal to that portion of all prescribed amounts deducted in computing the tax otherwise payable by the taxpayer under a prescribed Act for his taxation years ending before that particular time that may reasonably be attributed to amounts added in respect of the partnership under a prescribed provision of the said Act in computing a prescribed amount relating to the taxpayer,

vii.  any amount added pursuant to subsection 4 of section 127.2 of the Income Tax Act in computing his share purchase tax credit for a taxation year ending before or after that time,

viii.  an amount equal to 50% of the amount deemed to be designated pursuant to subsection 4 of section 127.3 of the Income Tax Act before that time in respect of each share, debt obligation or right acquired by the partnership and deemed to have been acquired by the taxpayer under that subsection,

ix.  an amount equal to the amount of all assistance received by the taxpayer before that time that has resulted in a reduction of the capital cost of a depreciable property to the partnership by virtue of section 101.4,

x.  any amount deductible by the taxpayer under section 147.2 or 176.3 in respect of the partnership for a taxation year of the taxpayer ending at or after that time,

xi.  any amount added, before the particular time, to the issue base relating to certain issue expenses, within the meaning of section 726.4.17.11, of the taxpayer and determined by reference to an amount included in an amount referred to in subparagraph ii in respect of the taxpayer regarding the partnership, and

xii.  any amount required by subparagraph b of the first paragraph of section 726.9.6 to be deducted at that time in computing the adjusted cost base to the taxpayer of the interest;

(m)  where the property is an interest in a partnership to which section 636 or 645 applies, any amount received by the taxpayer in full or partial satisfaction of that interest;

TRUST

(n)  where the property is a capital interest of the taxpayer in a trust, other than an interest in a personal trust that has never been acquired for consideration or an interest in a trust referred to in subparagraphs a to d of the third paragraph of section 647,

i.  any amount, to the extent that it has become payable before 1 January 1988, paid to the taxpayer by the trust after 31 December 1971 and before the particular time as payment or distribution of capital, otherwise than as proceeds of disposition of the interest or part thereof,

i.1.  any amount that has become payable by the trust to the taxpayer after 31 December 1987 and before the particular time in respect of the interest, otherwise than as proceeds of disposition of the interest or part thereof, except that portion of the amount

(1)  that was included in computing the taxpayer’s income under section 663,

(1.1)  that is deemed to be a dividend received by the taxpayer under section 663.4,

(2)  from which tax was deducted under Part XIII of the Income Tax Act by reason of paragraph c of subsection 1 of section 212 of the said Act, or

(3)  where the trust was resident in Canada throughout its taxation year in which the amount became payable, that was designated by the trust to be payable to the beneficiary under section 667, that is, subject to section 257.4, equal to the amount designated by the trust to be payable to the beneficiary under section 668 or that is an assessable distribution within the meaning of subsection 1 of section 218.3 of the Income Tax Act;

ii.  an amount equal to that portion of all prescribed amounts deducted in computing the tax payable by the taxpayer under a prescribed Act for his taxation years ending before the particular time that may reasonably be attributed to amounts added in respect of the trust under a prescribed provision of the said Act in computing a prescribed amount relating to the taxpayer,

iii.  any amount added pursuant to subsection 3 of section 127.2 of the Income Tax Act in computing his share purchase tax credit for a taxation year ending before or after that time,

iv.  an amount equal to 50% of the amount deemed to be designated pursuant to subsection 3 of section 127.3 of the Income Tax Act before that time in respect of each share, debt obligation or right acquired by the trust and deemed to have been acquired by the taxpayer under that subsection, and

v.  an amount equal to the amount of all assistance received by the taxpayer before that time that has resulted in a reduction of the capital cost of a depreciable property to the trust by virtue of section 101.4;

(o)  where the property is a capital interest in a trust not resident in Canada which the taxpayer purchased after 31 December 1971 and before the particular time from a person not resident in Canada, at a time, in this paragraph referred to as the “acquisition time”, when the property was not taxable Canadian property and the fair market value of the trust property referred to in section 258 was not less than 50% of the fair market value of all the trust property, the proportion of the amount by which such value of the property referred to in that section at the acquisition time exceeds the cost amounts to the trust at the acquisition time of the property that

i.  except where subparagraph ii applies, the fair market value at the acquisition time of the interest is of the fair market value at the acquisition time of all capital interests in the trust, or

ii.  in the case of a unit of a unit trust, the fair market value at the acquisition time of the unit is of the fair market value at the acquisition time of all the issued units of the trust;

(p)  where the property is a capital interest in a trust to which section 596 applies, any amount required by section 597 to be deducted;

(p.1)  where the property is a capital interest of the taxpayer in a designated trust, within the meaning of section 671.5, the aggregate of all amounts each of which is an amount deducted, in respect of that interest, under section 772.15 in computing the tax payable under this Part by the taxpayer or, where the taxpayer is a partnership, by a member of the partnership, for a taxation year that ended before the particular time;

(q)  where the property is an interest in a segregated fund trust referred to in section 851.2:

i.  each amount in respect of that interest that is a capital loss deemed, under section 851.21, to have been allocated to the taxpayer before the particular time, and

ii.  each amount in respect of that interest that before the particular time was deemed by section 851.16 to have been a capital loss of the taxpayer;

(r)  (paragraph repealed).

1972, c. 23, s. 238; 1973, c. 17, s. 24; 1974, c. 18, s. 14; 1975, c. 22, s. 44; 1977, c. 26, s. 25; 1978, c. 26, s. 44; 1982, c. 5, s. 59; 1984, c. 15, s. 63; 1985, c. 25, s. 46; 1986, c. 19, s. 43; 1987, c. 67, s. 65; 1988, c. 4, s. 29; 1989, c. 77, s. 24; 1990, c. 59, s. 120; 1992, c. 1, s. 29; 1993, c. 16, s. 114; 1993, c. 64, a. 25; 1994, c. 22, s. 124; 1996, c. 39, s. 73; 1997, c. 3, s. 71; 1997, c. 14, s. 55; 1997, c. 31, s. 39; 1998, c. 16, s. 105; 2001, c. 7, s. 32; 2001, c. 53, s. 48; 2003, c. 2, s. 88; 2004, c. 8, s. 50; 2004, c. 21, s. 69; 2006, c. 13, s. 34; 2007, c. 12, s. 45; 2009, c. 5, s. 88; 2009, c. 15, s. 68.

2006-06-13

257. A taxpayer shall, in computing the adjusted cost base of a property at a particular time, deduct the following amounts:

MISCELLANEOUS CASES

(a)  in the case of a property which the taxpayer disposed of in part after 1971 and before the particular time, the amount established under section 254 for such taxpayer;

(b)  where sections 485 to 485.18 apply, the amount by which the adjusted cost base is required to be reduced before the particular time;

(b.1)  any amount required under paragraph c of section 259, paragraph a of any of sections 259.1 to 259.3 and 296.1, subparagraph b.1 of the first paragraph of section 301, subparagraph a of the first paragraph of section 543.2 or paragraph a of section 553.2 to be deducted in computing the adjusted cost base of the property or any amount by which that adjusted cost base is required to be reduced because of any of sections 485.9 to 485.11;

(c)  that part of the cost of the property which is deductible in computing the income, otherwise than because of this Title or section 75.3, for any taxation year beginning before the particular time and ending after 31 December 1971;

(d)  where the property is acquired by the taxpayer after 31 December 1971, the aggregate of

i.  the amount by which any assistance, other than prescribed assistance, that the taxpayer has received or is entitled to receive before the particular time from a government, municipality or other public authority in respect of, or for the acquisition of, the property, whether as a grant, subsidy, forgivable loan, deduction from tax not otherwise provided for under this paragraph, investment allowance or as any other form of assistance, exceeds such part of the assistance as has been repaid by the taxpayer before that time in accordance with an obligation to repay all or any part of that assistance, and

ii.  the amounts, other than a prescribed amount, deducted by the taxpayer in respect of the property before the particular time under subsection 5 or 6 of section 127 of the Income Tax Act (Revised Statutes of Canada, 1985, chapter 1, 5th Supplement) in computing his tax payable under the said Act;

(e)  where the property was received as consideration for a payment or loan referred to in section 383, as it read in respect of the payment or loan, which the taxpayer made or consented to before 20 April 1983 to a joint exploration corporation, within the meaning of section 382, as a shareholder corporation of such a corporation, in respect of Canadian exploration and development expenses, Canadian exploration expenses, Canadian development expenses or Canadian oil and gas property expenses incurred by the joint exploration corporation, or where the property was substituted for such a property, such portion of the payment or loan as may reasonably be considered to relate to an agreed portion referred to in section 381, 406, 417 or 418.13, as it read in respect of the agreed portion;

(f)  where the property is an indemnity within the meaning of sections 469 to 479, or is deemed to be such an indemnity under such sections, the amount to be deducted in the adjusted cost base of that property under paragraph b of section 471;

(f.1)  where the property is a debt owing to the taxpayer by a corporation, the amount required by section 511, or sections 517.1 to 517.6 as they applied before 23 May 1985, to be deducted before the particular time in computing the adjusted cost base of that debt;

(f.2)  the amount by which the amount elected by the taxpayer before the particular time under section 257.2 exceeds any repayment before that time by the taxpayer of an amount received by him as described in section 257.2 that may reasonably be considered to relate to the amount elected where the repayment is made pursuant to a legal obligation to repay all or any part of the amount so received;

(f.3)  where the property is property of a corporation control of which was acquired by a person or group of persons at or before that time, any amount required by subparagraph a of the second paragraph of section 736 to be deducted in computing the adjusted cost base of the property;

(f.4)  where the property is a right to acquire a share of the capital stock of a corporation or a unit of a mutual fund trust under an agreement, any amount required by paragraph b of section 1055.1 to be deducted;

(f.5)  where the property was at the end of 22 February 1994 a non-qualifying immovable property of the taxpayer within the meaning assigned by section 726.6.1 as that section applies to the taxation year 1994, any amount required by paragraph b of section 726.9.4 to be deducted in computing the adjusted cost base to the taxpayer of the property;

(f.6)  where the taxpayer elected under section 726.9.2 in respect of the property, any amount required by section 726.9.5 to be deducted in computing the adjusted cost base to the taxpayer of the property at the particular time;

SHARES OF A CORPORATION

(g)  where the property is a share of the capital stock of a corporation resident in Canada,

i.  any amount received by the taxpayer after 31 December 1971 and before the particular time as a dividend other than a taxable dividend or a dividend in respect of which the corporation has elected in accordance with section 502 or 502.1 and section 503 in respect of the full amount thereof,

ii.  any amount required by sections 517.1 to 517.6, as they applied before 23 May 1985, to be deducted before the particular time in computing the adjusted cost base of that share,

iii.  any amount received by the taxpayer after 1971 and before the particular time on a reduction of the paid-up capital of the corporation in respect of that share, except to the extent that that amount is deemed by section 508 to be a dividend received by him,

iv.  any amount, to the extent that such amount is not proceeds of disposition of a share, received by the taxpayer before that particular time that would, but for section 510.1, be deemed by section 508 to be a dividend received by him, and

v.  any amount required by section 280.6 to be deducted in computing the adjusted cost base to the taxpayer of the share;

(h)  where the property is a share of the capital stock of a joint exploration corporation, within the meaning of section 382, resident in Canada to which the taxpayer has, after 31 December 1971, made a contribution of capital otherwise than by way of a loan, which contribution was included in computing the adjusted cost base of the property by virtue of paragraph e of section 255, such portion of the contribution as may reasonably be considered to be part of an agreed portion referred to in section 381, 406, 417 or 418.13, as it read in respect of the agreed portion;

(h.1)  any amount required by section 419.2 to be deducted before that time in computing the adjusted cost base of the property;

(i)  where the property is a share, or an interest therein or a right thereto, of the capital stock of a corporation acquired before 1 August 1976, an amount equal to the expenses incurred by the taxpayer as consideration to acquire the property, to the extent that such expenses are for him Canadian exploration and development expenses under paragraph e of section 364, Canadian exploration expenses under paragraph e of section 395, Canadian development expenses under paragraph e of section 408 or Canadian oil and gas property expenses under paragraph c of section 418.2;

(j)  where the property is a share of the capital stock of a corporation not resident in Canada,

i.  any amount required by paragraph d of section 477 and sections 585 to 588 to be deducted, and

ii.  any amount received by the taxpayer after 1971 and before that time on a reduction of the paid-up capital of the corporation in respect of the share;

(j.1)  (paragraph repealed);

DEBT OBLIGATIONS

(k)  where the property is a debt obligation, any amount that was deductible by virtue of sections 167 and 168 for any taxation year commencing before that particular time;

INDEXED DEBT OBLIGATIONS

(k.1)  where the property is an indexed debt obligation,

i.  any amount referred to in paragraph b of section 125.0.1 in respect of the obligation and deductible in computing the income of the taxpayer for a taxation year beginning before the particular time, and

ii.  the amount of any payment that was received or that became receivable by the taxpayer at or before the particular time in respect of an amount that was added under paragraph h.0.1 of section 255 to the cost to the taxpayer of the obligation;

PARTNERSHIP

(l)  when the property is an interest in a partnership,

i.  subject to section 257.2.1, an amount in respect of each fiscal period of the partnership ending after 31 December 1971 and before the particular time, equal to the taxpayer’s share, other than a share under an agreement referred to in section 608, of any loss of the partnership from any source for that fiscal period, computed as if this Part were construed without reference to

(1)  the fraction “1/2” in section 105, as it applied to each fiscal period of the partnership ending before 1 April 1977, and without reference to that or another fraction in sections 107 and 231,

(2)  the reference to the fraction and the letter C in the formula provided for in the first paragraph of section 105.2, and

(3)  paragraph z.4 of section 87, sections 89 to 91, 144, 144.1, 145, 205 to 207, 235, 236.2 to 241, 264, 271, 273, 288, 293, 425, 638.1, 741.2 and 744.1, as it applied to dispositions of property that occurred before 27 April 1995, paragraph j of section 157, as it read before being struck out, Division XV of Chapter IV and paragraphs g and h of section 489, as they read before being struck out,

i.1.  an amount in respect of each fiscal period of the partnership ending before the particular time that is the taxpayer’s limited partnership loss in respect of the partnership for the taxation year in which that fiscal period ends to the extent that such loss was deducted by the taxpayer in computing his taxable income for any taxation year that commenced before the particular time,

i.2.  any amount deemed by section 261.2 to be a loss of the taxpayer,

i.3.  where at the particular time the property is not a tax shelter investment as defined in section 851.38 and the taxpayer would be a member described in section 261.1 of the partnership if the fiscal period of the partnership that includes that time ended at that time, the unpaid principal amount of any indebtedness of the taxpayer for which recourse is limited, either immediately or in the future and either absolutely or contingently, and that may reasonably be considered to have been used to acquire the property,

i.4.  if the taxpayer is a member of the partnership who was a specified member of the partnership at all times since becoming a member of the partnership or the taxpayer is at the particular time a limited partner of the partnership for the purposes of section 261.1, the amount

(1)  deducted under section 217.13 in computing the taxpayer’s income for the taxation year in respect of the interest, where the particular time is in the taxpayer’s first taxation year in which a qualifying fiscal period, within the meaning of the first paragraph of section 217.10, of the business carried on by the taxpayer as a member of the partnership ends and is after the end of that period, and

(2)  where the particular time is in any other taxation year, deducted under section 217.13 in respect of the interest in computing the taxpayer’s income for the taxation year preceding that other year,

ii.  an amount with respect to each fiscal period of the partnership ending after 31 December 1971 and before the particular time, except a fiscal period subsequent to that in which the taxpayer ceased to be a member of the partnership, equal to the share of the taxpayer in the aggregate of Canadian exploration and development expenses, foreign resource pool expenses, Canadian exploration expenses, Canadian development expenses and Canadian oil and gas property expenses incurred by the partnership in the fiscal period and the amounts which, but for paragraph d of section 600, would be deductible in computing the income of the partnership for the fiscal period under the Act respecting the application of the Taxation Act (chapter I-4) in respect of exploration and development expenses,

ii.1.  where the taxpayer is a corporation or an individual, an amount in respect of each fiscal period of the partnership ending before the particular time, other than a fiscal period subsequent to that in which the taxpayer ceased to be a member of the partnership, equal to the taxpayer’s share of the aggregate of all amounts each of which would, but for section 134.2, be deductible in computing the partnership’s income for the fiscal period as dues described in subparagraph a or b of the first paragraph of that section or as a contribution described in subparagraph c of that paragraph,

iii.  every amount deemed, under section 714 or 752.0.10.11, to be a gift by the taxpayer as a member of the partnership at the end of any fiscal period of the partnership ending before that time,

iv.  every amount received by the taxpayer, after 1971 and before the particular time, as a payment or distribution of his share in the profits or capital of the partnership other than a share under an agreement referred to in section 608,

v.  any amount required by sections 614 to 617 to be deducted before that particular time in computing the adjusted cost base to him of his interest in the partnership,

vi.  an amount equal to that portion of all prescribed amounts deducted in computing the tax otherwise payable by the taxpayer under a prescribed Act for his taxation years ending before that particular time that may reasonably be attributed to amounts added in respect of the partnership under a prescribed provision of the said Act in computing a prescribed amount relating to the taxpayer,

vii.  any amount added pursuant to subsection 4 of section 127.2 of the Income Tax Act in computing his share purchase tax credit for a taxation year ending before or after that time,

viii.  an amount equal to 50% of the amount deemed to be designated pursuant to subsection 4 of section 127.3 of the Income Tax Act before that time in respect of each share, debt obligation or right acquired by the partnership and deemed to have been acquired by the taxpayer under that subsection,

ix.  an amount equal to the amount of all assistance received by the taxpayer before that time that has resulted in a reduction of the capital cost of a depreciable property to the partnership by virtue of section 101.4,

x.  any amount deductible by the taxpayer under section 147.2 or 176.3 in respect of the partnership for a taxation year of the taxpayer ending at or after that time,

xi.  any amount added, before the particular time, to the issue base relating to certain issue expenses, within the meaning of section 726.4.17.11, of the taxpayer and determined by reference to an amount included in an amount referred to in subparagraph ii in respect of the taxpayer regarding the partnership, and

xii.  any amount required by subparagraph b of the first paragraph of section 726.9.6 to be deducted at that time in computing the adjusted cost base to the taxpayer of the interest;

(m)  where the property is an interest in a partnership to which section 636 or 645 applies, any amount received by the taxpayer in full or partial satisfaction of that interest;

TRUST

(n)  where the property is a capital interest of the taxpayer in a trust, other than an interest in a personal trust that has never been acquired for consideration or an interest in a trust referred to in subparagraphs a to d of the third paragraph of section 647,

i.  any amount, to the extent that it has become payable before 1 January 1988, paid to the taxpayer by the trust after 31 December 1971 and before the particular time as payment or distribution of capital, otherwise than as proceeds of disposition of the interest or part thereof,

i.1.  any amount that has become payable by the trust to the taxpayer after 31 December 1987 and before the particular time in respect of the interest, otherwise than as proceeds of disposition of the interest or part thereof, except that portion of the amount

(1)  that was included in computing the taxpayer’s income under section 663,

(2)  from which tax was deducted under Part XIII of the Income Tax Act by reason of paragraph c of subsection 1 of section 212 of the said Act, or

(3)  where the trust was resident in Canada throughout its taxation year in which the amount became payable, that was designated by the trust to be payable to the beneficiary under section 667, that is, subject to section 257.4, equal to the amount designated by the trust to be payable to the beneficiary under section 668 or that is an assessable distribution within the meaning of subsection 1 of section 218.3 of the Income Tax Act;

ii.  an amount equal to that portion of all prescribed amounts deducted in computing the tax payable by the taxpayer under a prescribed Act for his taxation years ending before the particular time that may reasonably be attributed to amounts added in respect of the trust under a prescribed provision of the said Act in computing a prescribed amount relating to the taxpayer,

iii.  any amount added pursuant to subsection 3 of section 127.2 of the Income Tax Act in computing his share purchase tax credit for a taxation year ending before or after that time,

iv.  an amount equal to 50% of the amount deemed to be designated pursuant to subsection 3 of section 127.3 of the Income Tax Act before that time in respect of each share, debt obligation or right acquired by the trust and deemed to have been acquired by the taxpayer under that subsection, and

v.  an amount equal to the amount of all assistance received by the taxpayer before that time that has resulted in a reduction of the capital cost of a depreciable property to the trust by virtue of section 101.4;

(o)  where the property is a capital interest in a trust not resident in Canada which the taxpayer purchased after 31 December 1971 and before the particular time from a person not resident in Canada, at a time, in this paragraph referred to as the “acquisition time”, when the property was not taxable Canadian property and the fair market value of the trust property referred to in section 258 was not less than 50% of the fair market value of all the trust property, the proportion of the amount by which such value of the property referred to in that section at the acquisition time exceeds the cost amounts to the trust at the acquisition time of the property that

i.  except where subparagraph ii applies, the fair market value at the acquisition time of the interest is of the fair market value at the acquisition time of all capital interests in the trust, or

ii.  in the case of a unit of a unit trust, the fair market value at the acquisition time of the unit is of the fair market value at the acquisition time of all the issued units of the trust;

(p)  where the property is a capital interest in a trust to which section 596 applies, any amount required by section 597 to be deducted;

(p.1)  where the property is a capital interest of the taxpayer in a designated trust, within the meaning of section 671.5, the aggregate of all amounts each of which is an amount deducted, in respect of that interest, under section 772.15 in computing the tax payable under this Part by the taxpayer or, where the taxpayer is a partnership, by a member of the partnership, for a taxation year that ended before the particular time;

(q)  where the property is an interest in a segregated fund trust referred to in section 851.2:

i.  each amount in respect of that interest that is a capital loss deemed, under section 851.21, to have been allocated to the taxpayer before the particular time, and

ii.  each amount in respect of that interest that before the particular time was deemed by section 851.16 to have been a capital loss of the taxpayer;

(r)  (paragraph repealed).

1972, c. 23, s. 238; 1973, c. 17, s. 24; 1974, c. 18, s. 14; 1975, c. 22, s. 44; 1977, c. 26, s. 25; 1978, c. 26, s. 44; 1982, c. 5, s. 59; 1984, c. 15, s. 63; 1985, c. 25, s. 46; 1986, c. 19, s. 43; 1987, c. 67, s. 65; 1988, c. 4, s. 29; 1989, c. 77, s. 24; 1990, c. 59, s. 120; 1992, c. 1, s. 29; 1993, c. 16, s. 114; 1993, c. 64, a. 25; 1994, c. 22, s. 124; 1996, c. 39, s. 73; 1997, c. 3, s. 71; 1997, c. 14, s. 55; 1997, c. 31, s. 39; 1998, c. 16, s. 105; 2001, c. 7, s. 32; 2001, c. 53, s. 48; 2003, c. 2, s. 88; 2004, c. 8, s. 50; 2004, c. 21, s. 69; 2006, c. 13, s. 34.

2005-05-15

257. A taxpayer shall, in computing the adjusted cost base of a property at a particular time, deduct the following amounts:

MISCELLANEOUS CASES

(a)  in the case of a property which the taxpayer disposed of in part after 1971 and before the particular time, the amount established under section 254 for such taxpayer;

(b)  where sections 485 to 485.18 apply, the amount by which the adjusted cost base is required to be reduced before the particular time;

(b.1)  any amount required under paragraph c of section 259, paragraph a of any of sections 259.1 to 259.3 and 296.1, subparagraph b.1 of the first paragraph of section 301, subparagraph a of the first paragraph of section 543.2 or paragraph a of section 553.2 to be deducted in computing the adjusted cost base of the property or any amount by which that adjusted cost base is required to be reduced because of any of sections 485.9 to 485.11;

(c)  that part of the cost of the property which is deductible in computing the income, otherwise than because of this Title or section 75.3, for any taxation year beginning before the particular time and ending after 31 December 1971;

(d)  where the property is acquired by the taxpayer after 31 December 1971, the aggregate of

i.  the amount by which any assistance, other than prescribed assistance, that the taxpayer has received or is entitled to receive before the particular time from a government, municipality or other public authority in respect of, or for the acquisition of, the property, whether as a grant, subsidy, forgivable loan, deduction from tax not otherwise provided for under this paragraph, investment allowance or as any other form of assistance, exceeds such part of the assistance as has been repaid by the taxpayer before that time in accordance with an obligation to repay all or any part of that assistance, and

ii.  the amounts, other than a prescribed amount, deducted by the taxpayer in respect of the property before the particular time under subsection 5 or 6 of section 127 of the Income Tax Act (Revised Statutes of Canada, 1985, chapter 1, 5th Supplement) in computing his tax payable under the said Act;

(e)  where the property was received as consideration for a payment or loan referred to in section 383, as it read in respect of the payment or loan, which the taxpayer made or consented to before 20 April 1983 to a joint exploration corporation, within the meaning of section 382, as a shareholder corporation of such a corporation, in respect of Canadian exploration and development expenses, Canadian exploration expenses, Canadian development expenses or Canadian oil and gas property expenses incurred by the joint exploration corporation, or where the property was substituted for such a property, such portion of the payment or loan as may reasonably be considered to relate to an agreed portion referred to in section 381, 406, 417 or 418.13, as it read in respect of the agreed portion;

(f)  where the property is an indemnity within the meaning of sections 469 to 479, or is deemed to be such an indemnity under such sections, the amount to be deducted in the adjusted cost base of that property under paragraph b of section 471;

(f.1)  where the property is a debt owing to the taxpayer by a corporation, the amount required by section 511, or sections 517.1 to 517.6 as they applied before 23 May 1985, to be deducted before the particular time in computing the adjusted cost base of that debt;

(f.2)  the amount by which the amount elected by the taxpayer before the particular time under section 257.2 exceeds any repayment before that time by the taxpayer of an amount received by him as described in section 257.2 that may reasonably be considered to relate to the amount elected where the repayment is made pursuant to a legal obligation to repay all or any part of the amount so received;

(f.3)  where the property is property of a corporation control of which was acquired by a person or group of persons at or before that time, any amount required by subparagraph a of the second paragraph of section 736 to be deducted in computing the adjusted cost base of the property;

(f.4)  where the property is a right to acquire a share of the capital stock of a corporation or a unit of a mutual fund trust under an agreement, any amount required by paragraph b of section 1055.1 to be deducted;

(f.5)  where the property was at the end of 22 February 1994 a non-qualifying immovable property of the taxpayer within the meaning assigned by section 726.6.1 as that section applies to the taxation year 1994, any amount required by paragraph b of section 726.9.4 to be deducted in computing the adjusted cost base to the taxpayer of the property;

(f.6)  where the taxpayer elected under section 726.9.2 in respect of the property, any amount required by section 726.9.5 to be deducted in computing the adjusted cost base to the taxpayer of the property at the particular time;

SHARES OF A CORPORATION

(g)  where the property is a share of the capital stock of a corporation resident in Canada,

i.  any amount received by the taxpayer after 31 December 1971 and before the particular time as a dividend other than a taxable dividend or a dividend in respect of which the corporation has elected in accordance with section 502 or 502.1 and section 503 in respect of the full amount thereof,

ii.  any amount required by sections 517.1 to 517.6, as they applied before 23 May 1985, to be deducted before the particular time in computing the adjusted cost base of that share,

iii.  any amount received by the taxpayer after 1971 and before the particular time on a reduction of the paid-up capital of the corporation in respect of that share, except to the extent that that amount is deemed by section 508 to be a dividend received by him,

iv.  any amount, to the extent that such amount is not proceeds of disposition of a share, received by the taxpayer before that particular time that would, but for section 510.1, be deemed by section 508 to be a dividend received by him, and

v.  any amount required by section 280.6 to be deducted in computing the adjusted cost base to the taxpayer of the share;

(h)  where the property is a share of the capital stock of a joint exploration corporation, within the meaning of section 382, resident in Canada to which the taxpayer has, after 31 December 1971, made a contribution of capital otherwise than by way of a loan, which contribution was included in computing the adjusted cost base of the property by virtue of paragraph e of section 255, such portion of the contribution as may reasonably be considered to be part of an agreed portion referred to in section 381, 406, 417 or 418.13, as it read in respect of the agreed portion;

(h.1)  any amount required by section 419.2 to be deducted before that time in computing the adjusted cost base of the property;

(i)  where the property is a share, or an interest therein or a right thereto, of the capital stock of a corporation acquired before 1 August 1976, an amount equal to the expenses incurred by the taxpayer as consideration to acquire the property, to the extent that such expenses are for him Canadian exploration and development expenses under paragraph e of section 364, Canadian exploration expenses under paragraph e of section 395, Canadian development expenses under paragraph e of section 408 or Canadian oil and gas property expenses under paragraph c of section 418.2;

(j)  where the property is a share of the capital stock of a corporation not resident in Canada,

i.  any amount required by paragraph d of section 477 and sections 585 to 588 to be deducted, and

ii.  any amount received by the taxpayer after 1971 and before that time on a reduction of the paid-up capital of the corporation in respect of the share;

(j.1)  (paragraph repealed);

DEBT OBLIGATIONS

(k)  where the property is a debt obligation, any amount that was deductible by virtue of sections 167 and 168 for any taxation year commencing before that particular time;

INDEXED DEBT OBLIGATIONS

(k.1)  where the property is an indexed debt obligation,

i.  any amount referred to in paragraph b of section 125.0.1 in respect of the obligation and deductible in computing the income of the taxpayer for a taxation year beginning before the particular time, and

ii.  the amount of any payment that was received or that became receivable by the taxpayer at or before the particular time in respect of an amount that was added under paragraph h.0.1 of section 255 to the cost to the taxpayer of the obligation;

PARTNERSHIP

(l)  when the property is an interest in a partnership,

i.  subject to section 257.2.1, an amount in respect of each fiscal period of the partnership ending after 31 December 1971 and before the particular time, equal to the taxpayer’s share, other than a share under an agreement referred to in section 608, of any loss of the partnership from any source for that fiscal period, computed as if this Part were construed without reference to

(1)  the fraction "1/2" in section 105, as it applied to each fiscal period of the partnership ending before 1 April 1977, and without reference to that or another fraction in sections 107 and 231,

(2)  the reference to the fraction and the letter C in the formula provided for in the first paragraph of section 105.2, and

(3)  paragraph z.4 of section 87, sections 89 to 91, 144, 144.1, 145, 205 to 207, 235, 236.2 to 241, 264, 271, 273, 288, 293, 425, 638.1, 741.2 and 744.1, as it applied to dispositions of property that occurred before 27 April 1995, paragraph j of section 157, as it read before being struck out, Division XV of Chapter IV and paragraphs g and h of section 489, as they read before being struck out,

i.1.  an amount in respect of each fiscal period of the partnership ending before the particular time that is the taxpayer’s limited partnership loss in respect of the partnership for the taxation year in which that fiscal period ends to the extent that such loss was deducted by the taxpayer in computing his taxable income for any taxation year that commenced before the particular time,

i.2.  any amount deemed by section 261.2 to be a loss of the taxpayer,

i.3.  where at the particular time the property is not a tax shelter investment as defined in section 851.38 and the taxpayer would be a member described in section 261.1 of the partnership if the fiscal period of the partnership that includes that time ended at that time, the unpaid principal amount of any indebtedness of the taxpayer for which recourse is limited, either immediately or in the future and either absolutely or contingently, and that may reasonably be considered to have been used to acquire the property,

i.4.  if the taxpayer is a member of the partnership who was a specified member of the partnership at all times since becoming a member of the partnership or the taxpayer is at the particular time a limited partner of the partnership for the purposes of section 261.1, the amount

(1)  deducted under section 217.13 in computing the taxpayer’s income for the taxation year in respect of the interest, where the particular time is in the taxpayer’s first taxation year in which a qualifying fiscal period, within the meaning of the first paragraph of section 217.10, of the business carried on by the taxpayer as a member of the partnership ends and is after the end of that period, and

(2)  where the particular time is in any other taxation year, deducted under section 217.13 in respect of the interest in computing the taxpayer’s income for the taxation year preceding that other year,

ii.  an amount with respect to each fiscal period of the partnership ending after 31 December 1971 and before the particular time, except a fiscal period subsequent to that in which the taxpayer ceased to be a member of the partnership, equal to the share of the taxpayer in the aggregate of Canadian exploration and development expenses, foreign resource pool expenses, Canadian exploration expenses, Canadian development expenses and Canadian oil and gas property expenses incurred by the partnership in the fiscal period and the amounts which, but for paragraph d of section 600, would be deductible in computing the income of the partnership for the fiscal period under the Act respecting the application of the Taxation Act (chapter I-4) in respect of exploration and development expenses,

ii.1.  where the taxpayer is a corporation or an individual, an amount in respect of each fiscal period of the partnership ending before the particular time, other than a fiscal period subsequent to that in which the taxpayer ceased to be a member of the partnership, equal to the taxpayer’s share of the aggregate of all amounts each of which would, but for section 134.2, be deductible in computing the partnership’s income for the fiscal period as dues described in subparagraph a or b of the first paragraph of that section or as a contribution described in subparagraph c of that paragraph,

iii.  every amount deemed, under section 714 or 752.0.10.11, to be a gift by the taxpayer as a member of the partnership at the end of any fiscal period of the partnership ending before that time,

iv.  every amount received by the taxpayer, after 1971 and before the particular time, as a payment or distribution of his share in the profits or capital of the partnership other than a share under an agreement referred to in section 608,

v.  any amount required by sections 614 to 617 to be deducted before that particular time in computing the adjusted cost base to him of his interest in the partnership,

vi.  an amount equal to that portion of all prescribed amounts deducted in computing the tax otherwise payable by the taxpayer under a prescribed Act for his taxation years ending before that particular time that may reasonably be attributed to amounts added in respect of the partnership under a prescribed provision of the said Act in computing a prescribed amount relating to the taxpayer,

vii.  any amount added pursuant to subsection 4 of section 127.2 of the Income Tax Act in computing his share purchase tax credit for a taxation year ending before or after that time,

viii.  an amount equal to 50% of the amount deemed to be designated pursuant to subsection 4 of section 127.3 of the Income Tax Act before that time in respect of each share, debt obligation or right acquired by the partnership and deemed to have been acquired by the taxpayer under that subsection,

ix.  an amount equal to the amount of all assistance received by the taxpayer before that time that has resulted in a reduction of the capital cost of a depreciable property to the partnership by virtue of section 101.4,

x.  any amount deductible by the taxpayer under section 147.2 or 176.3 in respect of the partnership for a taxation year of the taxpayer ending at or after that time,

xi.  any amount added, before the particular time, to the issue base relating to certain issue expenses, within the meaning of section 726.4.17.11, of the taxpayer and determined by reference to an amount included in an amount referred to in subparagraph ii in respect of the taxpayer regarding the partnership, and

xii.  any amount required by subparagraph b of the first paragraph of section 726.9.6 to be deducted at that time in computing the adjusted cost base to the taxpayer of the interest;

(m)  where the property is an interest in a partnership to which section 636 or 645 applies, any amount received by the taxpayer in full or partial satisfaction of that interest;

TRUST

(n)  where the property is a capital interest of the taxpayer in a trust, other than an interest in a personal trust that has never been acquired for consideration or an interest in a trust referred to in subparagraphs a to d of the third paragraph of section 647,

i.  any amount, to the extent that it has become payable before 1 January 1988, paid to the taxpayer by the trust after 31 December 1971 and before the particular time as payment or distribution of capital, otherwise than as proceeds of disposition of the interest or part thereof,

i.1.  any amount that has become payable by the trust to the taxpayer after 31 December 1987 and before the particular time in respect of the interest, otherwise than as proceeds of disposition of the interest or part thereof, except that portion of the amount

(1)  that was included in computing the taxpayer’s income under section 663,

(2)  from which tax was deducted under Part XIII of the Income Tax Act by reason of paragraph c of subsection 1 of section 212 of the said Act, or

(3)  where the trust was resident in Canada throughout its taxation year in which the amount became payable, that was designated by the trust to be payable to the beneficiary under section 667 or is, subject to section 257.4, equal to the amount designated by the trust to be payable to the beneficiary under section 668,

ii.  an amount equal to that portion of all prescribed amounts deducted in computing the tax payable by the taxpayer under a prescribed Act for his taxation years ending before the particular time that may reasonably be attributed to amounts added in respect of the trust under a prescribed provision of the said Act in computing a prescribed amount relating to the taxpayer,

iii.  any amount added pursuant to subsection 3 of section 127.2 of the Income Tax Act in computing his share purchase tax credit for a taxation year ending before or after that time,

iv.  an amount equal to 50% of the amount deemed to be designated pursuant to subsection 3 of section 127.3 of the Income Tax Act before that time in respect of each share, debt obligation or right acquired by the trust and deemed to have been acquired by the taxpayer under that subsection, and

v.  an amount equal to the amount of all assistance received by the taxpayer before that time that has resulted in a reduction of the capital cost of a depreciable property to the trust by virtue of section 101.4;

(o)  where the property is a capital interest in a trust not resident in Canada which the taxpayer purchased after 31 December 1971 and before the particular time from a person not resident in Canada, at a time, in this paragraph referred to as the "acquisition time", when the property was not taxable Canadian property and the fair market value of the trust property referred to in section 258 was not less than 50% of the fair market value of all the trust property, the proportion of the amount by which such value of the property referred to in that section at the acquisition time exceeds the cost amounts to the trust at the acquisition time of the property that

i.  except where subparagraph ii applies, the fair market value at the acquisition time of the interest is of the fair market value at the acquisition time of all capital interests in the trust, or

ii.  in the case of a unit of a unit trust, the fair market value at the acquisition time of the unit is of the fair market value at the acquisition time of all the issued units of the trust;

(p)  where the property is a capital interest in a trust to which section 596 applies, any amount required by section 597 to be deducted;

(p.1)  where the property is a capital interest of the taxpayer in a designated trust, within the meaning of section 671.5, the aggregate of all amounts each of which is an amount deducted, in respect of that interest, under section 772.15 in computing the tax payable under this Part by the taxpayer or, where the taxpayer is a partnership, by a member of the partnership, for a taxation year that ended before the particular time;

(q)  where the property is an interest in a segregated fund trust referred to in section 851.2:

i.  each amount in respect of that interest that is a capital loss deemed, under section 851.21, to have been allocated to the taxpayer before the particular time, and

ii.  each amount in respect of that interest that before the particular time was deemed by section 851.16 to have been a capital loss of the taxpayer;

(r)  (paragraph repealed).

1972, c. 23, s. 238; 1973, c. 17, s. 24; 1974, c. 18, s. 14; 1975, c. 22, s. 44; 1977, c. 26, s. 25; 1978, c. 26, s. 44; 1982, c. 5, s. 59; 1984, c. 15, s. 63; 1985, c. 25, s. 46; 1986, c. 19, s. 43; 1987, c. 67, s. 65; 1988, c. 4, s. 29; 1989, c. 77, s. 24; 1990, c. 59, s. 120; 1992, c. 1, s. 29; 1993, c. 16, s. 114; 1993, c. 64, a. 25; 1994, c. 22, s. 124; 1996, c. 39, s. 73; 1997, c. 3, s. 71; 1997, c. 14, s. 55; 1997, c. 31, s. 39; 1998, c. 16, s. 105; 2001, c. 7, s. 32; 2001, c. 53, s. 48; 2003, c. 2, s. 88; 2004, c. 8, s. 50; 2004, c. 21, s. 69.

2005-05-15

257. A taxpayer shall, in computing the adjusted cost base of a property at a particular time, deduct the following amounts:

MISCELLANEOUS CASES

(a)  in the case of a property which the taxpayer disposed of in part after 1971 and before the particular time, the amount established under section 254 for such taxpayer;

(b)  where sections 485 to 485.18 apply, the amount by which the adjusted cost base is required to be reduced before the particular time;

(b.1)  any amount required under paragraph c of section 259, paragraph a of any of sections 259.1 to 259.3 and 296.1, subparagraph b.1 of the first paragraph of section 301, subparagraph a of the first paragraph of section 543.2 or paragraph a of section 553.2 to be deducted in computing the adjusted cost base of the property or any amount by which that adjusted cost base is required to be reduced because of any of sections 485.9 to 485.11;

(c)  that part of the cost of the property which is deductible in computing the income, otherwise than because of this Title or of section 75.2.1 or 75.3, for any taxation year beginning before the particular time and ending after 31 December 1971;

(d)  where the property is acquired by the taxpayer after 31 December 1971, the aggregate of

i.  the amount by which any assistance, other than prescribed assistance, that the taxpayer has received or is entitled to receive before the particular time from a government, municipality or other public authority in respect of, or for the acquisition of, the property, whether as a grant, subsidy, forgivable loan, deduction from tax not otherwise provided for under this paragraph, investment allowance or as any other form of assistance, exceeds such part of the assistance as has been repaid by the taxpayer before that time in accordance with an obligation to repay all or any part of that assistance, and

ii.  the amounts, other than a prescribed amount, deducted by the taxpayer in respect of the property before the particular time under subsection 5 or 6 of section 127 of the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)) in computing his tax payable under the said Act;

(e)  where the property was received as consideration for a payment or loan referred to in section 383, as it read in respect of the payment or loan, which the taxpayer made or consented to before 20 April 1983 to a joint exploration corporation, within the meaning of section 382, as a shareholder corporation of such a corporation, in respect of Canadian exploration and development expenses, Canadian exploration expenses, Canadian development expenses or Canadian oil and gas property expenses incurred by the joint exploration corporation, or where the property was substituted for such a property, such portion of the payment or loan as may reasonably be considered to relate to an agreed portion referred to in section 381, 406, 417 or 418.13, as it read in respect of the agreed portion;

(f)  where the property is an indemnity within the meaning of sections 469 to 479, or is deemed to be such an indemnity under those sections, the amount required by subparagraph b of the first paragraph of section 471 to be deducted;

(f.1)  where the property is a debt owing to the taxpayer by a corporation, the amount required by section 511, or sections 517.1 to 517.6 as they applied before 23 May 1985, to be deducted before the particular time in computing the adjusted cost base of that debt;

(f.2)  the amount by which the amount elected by the taxpayer before the particular time under section 257.2 exceeds any repayment before that time by the taxpayer of an amount received by him as described in section 257.2 that may reasonably be considered to relate to the amount elected where the repayment is made pursuant to a legal obligation to repay all or any part of the amount so received;

(f.3)  where the property is property of a corporation control of which was acquired by a person or group of persons at or before that time, any amount required by subparagraph a of the second paragraph of section 736 to be deducted in computing the adjusted cost base of the property;

(f.4)  where the property is a right to acquire a share of the capital stock of a corporation or a unit of a mutual fund trust under an agreement, any amount required by paragraph b of section 1055.1 to be deducted;

(f.5)  where the property was at the end of 22 February 1994 a non-qualifying immovable property of the taxpayer within the meaning assigned by section 726.6.1 as that section applies to the taxation year 1994, any amount required by paragraph b of section 726.9.4 to be deducted in computing the adjusted cost base to the taxpayer of the property;

(f.6)  where the taxpayer elected under section 726.9.2 in respect of the property, any amount required by section 726.9.5 to be deducted in computing the adjusted cost base to the taxpayer of the property at the particular time;

SHARES OF A CORPORATION

(g)  where the property is a share of the capital stock of a corporation resident in Canada,

i.  any amount received by the taxpayer after 31 December 1971 and before the particular time as a dividend other than a taxable dividend or a dividend in respect of which the corporation has elected in accordance with section 502 or 502.1 and section 503 in respect of the full amount thereof,

ii.  any amount required by sections 517.1 to 517.6, as they applied before 23 May 1985, to be deducted before the particular time in computing the adjusted cost base of that share,

iii.  any amount received by the taxpayer after 1971 and before the particular time on a reduction of the paid-up capital of the corporation in respect of that share, except to the extent that that amount is deemed by section 508 to be a dividend received by him,

iv.  any amount, to the extent that such amount is not proceeds of disposition of a share, received by the taxpayer before that particular time that would, but for section 510.1, be deemed by section 508 to be a dividend received by him, and

v.  any amount required by section 280.6 to be deducted in computing the adjusted cost base to the taxpayer of the share;

(h)  where the property is a share of the capital stock of a joint exploration corporation, within the meaning of section 382, resident in Canada to which the taxpayer has, after 31 December 1971, made a contribution of capital otherwise than by way of a loan, which contribution was included in computing the adjusted cost base of the property by virtue of paragraph e of section 255, such portion of the contribution as may reasonably be considered to be part of an agreed portion referred to in section 381, 406, 417 or 418.13, as it read in respect of the agreed portion;

(h.1)  any amount required by section 419.2 to be deducted before that time in computing the adjusted cost base of the property;

(i)  where the property is a share, or an interest therein or a right thereto, of the capital stock of a corporation acquired before 1 August 1976, an amount equal to the expenses incurred by the taxpayer as consideration to acquire the property, to the extent that such expenses are for him Canadian exploration and development expenses under paragraph e of section 364, Canadian exploration expenses under paragraph e of section 395, Canadian development expenses under paragraph e of section 408 or Canadian oil and gas property expenses under paragraph c of section 418.2;

(j)  where the property is a share of the capital stock of a corporation not resident in Canada,

i.  any amount required by subparagraph d of the first paragraph of section 477 and sections 585 to 588 to be deducted, and

ii.  any amount received by the taxpayer after 1971 and before that time on a reduction of the paid-up capital of the corporation in respect of the share;

(j.1)  (paragraph repealed);

DEBT OBLIGATIONS

(k)  where the property is a debt obligation, any amount that was deductible by virtue of sections 167 and 168 for any taxation year commencing before that particular time;

INDEXED DEBT OBLIGATIONS

(k.1)  where the property is an indexed debt obligation,

i.  any amount referred to in paragraph b of section 125.0.1 in respect of the obligation and deductible in computing the income of the taxpayer for a taxation year beginning before the particular time, and

ii.  the amount of any payment that was received or that became receivable by the taxpayer at or before the particular time in respect of an amount that was added under paragraph h.0.1 of section 255 to the cost to the taxpayer of the obligation;

PARTNERSHIP

(l)  when the property is an interest in a partnership,

i.  subject to section 257.2.1, an amount in respect of each fiscal period of the partnership ending after 31 December 1971 and before the particular time, equal to the taxpayer’s share, other than a share under an agreement referred to in section 608, of any loss of the partnership from any source for that fiscal period, computed as if this Part were construed without reference to

(1)  the fraction “1/2” in section 105, as it applied to each fiscal period of the partnership ending before 1 April 1977, and without reference to that or another fraction in sections 107 and 231,

(2)  the reference to the fraction and the letter C in the formula provided for in the first paragraph of section 105.2, and

(3)  paragraph z.4 of section 87, sections 89 to 91, 144, 144.1, 145, 205 to 207, 235, 236.2 to 241, 264, 271, 273, 288, 293, 425, 638.1, 741.2 and 744.1, as it applied to dispositions of property that occurred before 27 April 1995, paragraph j of section 157, as it read before being struck out, Division XV of Chapter IV and paragraphs g and h of section 489, as they read before being struck out,

i.1.  an amount in respect of each fiscal period of the partnership ending before the particular time that is the taxpayer’s limited partnership loss in respect of the partnership for the taxation year in which that fiscal period ends to the extent that such loss was deducted by the taxpayer in computing his taxable income for any taxation year that commenced before the particular time,

i.2.  any amount deemed by section 261.2 to be a loss of the taxpayer,

i.3.  where at the particular time the property is not a tax shelter investment as defined in section 851.38 and the taxpayer would be a member described in section 261.1 of the partnership if the fiscal period of the partnership that includes that time ended at that time, the unpaid principal amount of any indebtedness of the taxpayer for which recourse is limited, either immediately or in the future and either absolutely or contingently, and that may reasonably be considered to have been used to acquire the property,

i.4.  if the taxpayer is a member of the partnership who was a specified member of the partnership at all times since becoming a member of the partnership or the taxpayer is at the particular time a limited partner of the partnership for the purposes of section 261.1, the amount

(1)  deducted under section 217.13 in computing the taxpayer’s income for the taxation year in respect of the interest, where the particular time is in the taxpayer’s first taxation year in which a qualifying fiscal period, within the meaning of the first paragraph of section 217.10, of the business carried on by the taxpayer as a member of the partnership ends and is after the end of that period, and

(2)  where the particular time is in any other taxation year, deducted under section 217.13 in respect of the interest in computing the taxpayer’s income for the taxation year preceding that other year,

ii.  an amount with respect to each fiscal period of the partnership ending after 31 December 1971 and before the particular time, except a fiscal period subsequent to that in which the taxpayer ceased to be a member of the partnership, equal to the share of the taxpayer in the aggregate of Canadian exploration and development expenses, foreign resource pool expenses, Canadian exploration expenses, Canadian development expenses and Canadian oil and gas property expenses incurred by the partnership in the fiscal period and the amounts which, but for paragraph d of section 600, would be deductible in computing the income of the partnership for the fiscal period under the Act respecting the application of the Taxation Act (chapter I-4) in respect of exploration and development expenses,

ii.1.  where the taxpayer is a corporation or an individual, an amount in respect of each fiscal period of the partnership ending before the particular time, other than a fiscal period subsequent to that in which the taxpayer ceased to be a member of the partnership, equal to the taxpayer’s share of the aggregate of all amounts each of which would, but for section 134.2, be deductible in computing the partnership’s income for the fiscal period as dues described in subparagraph a or b of the first paragraph of that section or as a contribution described in subparagraph c of that paragraph,

iii.  any amount deemed, under section 714 or 752.0.10.11, to be the eligible amount of a gift made by the taxpayer as a member of the partnership at the end of any fiscal period of the partnership ending before that time,

iv.  every amount received by the taxpayer, after 1971 and before the particular time, as a payment or distribution of his share in the profits or capital of the partnership other than a share under an agreement referred to in section 608,

v.  any amount required by sections 614 to 617 to be deducted before that particular time in computing the adjusted cost base to him of his interest in the partnership,

vi.  an amount equal to that portion of all prescribed amounts deducted in computing the tax otherwise payable by the taxpayer under a prescribed Act for his taxation years ending before that particular time that may reasonably be attributed to amounts added in respect of the partnership under a prescribed provision of the said Act in computing a prescribed amount relating to the taxpayer,

vii.  any amount added pursuant to subsection 4 of section 127.2 of the Income Tax Act in computing his share purchase tax credit for a taxation year ending before or after that time,

viii.  an amount equal to 50% of the amount deemed to be designated pursuant to subsection 4 of section 127.3 of the Income Tax Act before that time in respect of each share, debt obligation or right acquired by the partnership and deemed to have been acquired by the taxpayer under that subsection,

ix.  an amount equal to the amount of all assistance received by the taxpayer before that time that has resulted in a reduction of the capital cost of a depreciable property to the partnership by virtue of section 101.4,

x.  any amount deductible by the taxpayer under section 147.2 or 176.3 in respect of the partnership for a taxation year of the taxpayer ending at or after that time,

xi.  any amount added, before the particular time, to the issue base relating to certain issue expenses, within the meaning of section 726.4.17.11, of the taxpayer and determined by reference to an amount included in an amount referred to in subparagraph ii in respect of the taxpayer regarding the partnership, and

xii.  any amount required by subparagraph b of the first paragraph of section 726.9.6 to be deducted at that time in computing the adjusted cost base to the taxpayer of the interest;

(m)  where the property is an interest in a partnership to which section 636 or 645 applies, any amount received by the taxpayer in full or partial satisfaction of that interest;

TRUST

(n)  where the property is a capital interest of the taxpayer in a trust, other than an interest in a personal trust that has never been acquired for consideration or an interest in a trust referred to in subparagraphs a to d of the third paragraph of section 647,

i.  any amount, to the extent that it has become payable before 1 January 1988, paid to the taxpayer by the trust after 31 December 1971 and before the particular time as payment or distribution of capital, otherwise than as proceeds of disposition of the interest or part thereof,

i.1.  any amount that has become payable by the trust to the taxpayer after 31 December 1987 and before the particular time in respect of the interest, otherwise than as proceeds of disposition of the interest or part thereof, except that portion of the amount

(1)  that was included in computing the taxpayer’s income under section 663,

(1.1)  that is deemed to be a dividend received by the taxpayer under section 663.4,

(2)  from which tax was deducted under Part XIII of the Income Tax Act by reason of paragraph c of subsection 1 of section 212 of the said Act, or

(3)  where the trust was resident in Canada throughout its taxation year in which the amount became payable, that was designated by the trust to be payable to the beneficiary under section 667, that is, subject to section 257.4, equal to the amount designated by the trust to be payable to the beneficiary under section 668 or that is an assessable distribution within the meaning of subsection 1 of section 218.3 of the Income Tax Act;

ii.  an amount equal to that portion of all prescribed amounts deducted in computing the tax payable by the taxpayer under a prescribed Act for his taxation years ending before the particular time that may reasonably be attributed to amounts added in respect of the trust under a prescribed provision of the said Act in computing a prescribed amount relating to the taxpayer,

iii.  any amount added pursuant to subsection 3 of section 127.2 of the Income Tax Act in computing his share purchase tax credit for a taxation year ending before or after that time,

iv.  an amount equal to 50% of the amount deemed to be designated pursuant to subsection 3 of section 127.3 of the Income Tax Act before that time in respect of each share, debt obligation or right acquired by the trust and deemed to have been acquired by the taxpayer under that subsection, and

v.  an amount equal to the amount of all assistance received by the taxpayer before that time that has resulted in a reduction of the capital cost of a depreciable property to the trust by virtue of section 101.4;

(o)  where the property is a capital interest in a trust not resident in Canada which the taxpayer purchased after 31 December 1971 and before the particular time from a person not resident in Canada, at a time, in this paragraph referred to as the “acquisition time”, when the property was not taxable Canadian property and the fair market value of the trust property referred to in section 258 was not less than 50% of the fair market value of all the trust property, the proportion of the amount by which such value of the property referred to in that section at the acquisition time exceeds the cost amounts to the trust at the acquisition time of the property that

i.  except where subparagraph ii applies, the fair market value at the acquisition time of the interest is of the fair market value at the acquisition time of all capital interests in the trust, or

ii.  in the case of a unit of a unit trust, the fair market value at the acquisition time of the unit is of the fair market value at the acquisition time of all the issued units of the trust;

(p)  where the property is a capital interest in a trust to which section 596 applies, any amount required by section 597 to be deducted;

(p.1)  where the property is a capital interest of the taxpayer in a designated trust, within the meaning of section 671.5, the aggregate of all amounts each of which is an amount deducted, in respect of that interest, under section 772.15 in computing the tax payable under this Part by the taxpayer or, where the taxpayer is a partnership, by a member of the partnership, for a taxation year that ended before the particular time;

(q)  where the property is an interest in a segregated fund trust referred to in section 851.2:

i.  each amount in respect of that interest that is a capital loss deemed, under section 851.21, to have been allocated to the taxpayer before the particular time, and

ii.  each amount in respect of that interest that before the particular time was deemed by section 851.16 to have been a capital loss of the taxpayer;

(r)  (paragraph repealed).

1972, c. 23, s. 238; 1973, c. 17, s. 24; 1974, c. 18, s. 14; 1975, c. 22, s. 44; 1977, c. 26, s. 25; 1978, c. 26, s. 44; 1982, c. 5, s. 59; 1984, c. 15, s. 63; 1985, c. 25, s. 46; 1986, c. 19, s. 43; 1987, c. 67, s. 65; 1988, c. 4, s. 29; 1989, c. 77, s. 24; 1990, c. 59, s. 120; 1992, c. 1, s. 29; 1993, c. 16, s. 114; 1993, c. 64, a. 25; 1994, c. 22, s. 124; 1996, c. 39, s. 73; 1997, c. 3, s. 71; 1997, c. 14, s. 55; 1997, c. 31, s. 39; 1998, c. 16, s. 105; 2001, c. 7, s. 32; 2001, c. 53, s. 48; 2003, c. 2, s. 88; 2004, c. 8, s. 50; 2004, c. 21, s. 69; 2006, c. 13, s. 34; 2007, c. 12, s. 45; 2009, c. 5, s. 88.