II, s. 78(3)]
(j)[Repealed, 2017, c. 20, s. 8]
Marginal note:Part VI.1 tax
(k)the amount determined by multiplying the taxpayer’s tax payable under subsection 191.1(1) for the year by
(i)if the taxation year ends before 2010, 3,
(ii)if the taxation year ends after 2009 and before 2012, 3.2, and
(iii)if the taxation year ends after 2011, 3.5.
Marginal note:Election by particular qualifying person
(1.1)For the purpose of computing the taxable income of a taxpayer for a taxation year, paragraph (1)(d) shall be read without reference to its subparagraph (i) in respect of a right granted to the taxpayer under an agreement to sell or issue securities referred to in subsection 7(1) if
(a)the particular qualifying person elects in prescribed form that neither the particular qualifying person nor any person not dealing at arm’s length with the particular qualifying person will deduct in computing its income for a taxation year any amount (other than a designated amount described in subsection (1.2)) in respect of a payment to or for the benefit of a taxpayer for the taxpayer’s transfer or disposition of that right;
(b)the particular qualifying person files the election with the Minister;
(c)the particular qualifying person provides the taxpayer or, if the taxpayer is deceased, the graduated rate estate of the taxpayer, with evidence in writing of the election; and
(d)the taxpayer or, if the taxpayer is deceased, the graduated rate estate of the taxpayer, files the evidence with the Minister with the taxpayer’s return of income for the year in which a deduction under paragraph (1)(d) is claimed.
Marginal note:Designated amount
(1.2)For the purposes of subsections (1.1) and (1.44), an amount is a designated amount if the following conditions are met:
(a)the amount would otherwise be deductible in computing the income of the particular qualifying person in the absence of subsections (1.1) and (1.44);
(b)the amount is payable to a person
(i)with whom the particular qualifying person deals at arm’s length, and
(ii)who is neither an employee of the particular qualifying person nor of any person not dealing at arm’s length with the particular qualifying person; and
(c)the amount is payable in respect of an arrangement entered into for the purpose of managing the particular qualifying person’s financial risk associated with a potential increase in value of the securities under the agreement described in subsection (1.1) or (1.44).
Marginal note:Determination of non-qualified securities
(1.3)Subsection (1.31) applies to a taxpayer in respect of an agreement if
(a)a particular qualifying person agrees to sell or issue securities of the particular qualifying person (or another qualifying person that does not deal at arm’s length with the particular qualifying person) to the taxpayer under the agreement;
(b)at the time the agreement is entered into (in this subsection and subsection (1.31) referred to as the “relevant time”), the taxpayer is an employee of the particular qualifying person or of a qualifying person that does not deal at arm’s length with the particular qualifying person; and
(c)at the relevant time, any of the following persons is a specified person:
(i)the particular qualifying person,
(ii)the other qualifying person, if any, referred to in paragraph (a), or
(iii)the other qualifying person, if any, referred to in paragraph (b).
Marginal note:Annual vesting limit
(1.31)If this subsection applies to a taxpayer in respect of an agreement, the securities to be sold or issued under the agreement, for each vesting year of those securities, are deemed to be non-qualified securities for the purposes of this section in the proportion determined by the formula
A/B
where
C + D − $200,000
where
(a)$200,000, and
(b)the total of all amounts each of which is an amount determined for C in respect of securities that have that same vesting year under agreements (other than the agreement) entered into at or before the relevant time with the particular qualifying person referred to in subsection (1.3) (or another qualifying person that does not deal at arm’s length with the particular qualifying person), other than
(i)securities designated under subsection (1.4),
(ii)old securities (within the meaning of subsection 7(1.4)),
(iii)securities where the right to acquire those securities is an old right (within the meaning of subsection (1.7)), and
(iv)securities in respect of which
(A)the right to acquire those securities has expired, or has been cancelled, before the relevant time, and
(B)no amount is deductible under paragraph (1)(d) in computing the taxable income of the taxpayer for any year; and
Marginal note:Non-qualified security designation
(1.4)If subsection (1.31) applies to a taxpayer in respect of an agreement and the particular qualifying person referred to in paragraph (1.3)(a) designates one or more securities to be sold or issued under the agreement as non-qualified securities, the following rules apply:
(a)those securities are deemed to be non-qualified securities for the purposes of this section; and
(b)the particular qualifying person may not elect under subsection (1.1) in respect of a right to acquire those securities.
Marginal note:Ordering of acquisition of securities
(1.41)If a taxpayer acquires a security under an agreement and the acquired security could be a security that is not a non-qualified security, the security is to be considered a security that is not a non-qualified security for the purposes of this section.
Marginal note:Ordering of simultaneous agreements — subsection (1.31)
(1.42)If two or more agreements to sell or issue options are entered into at the same time and the particular qualifying person referred to in subsection (1.3) designates the order of the agreements, then the agreements are deemed to have been entered into in that order for the purposes of paragraph (b) of the description of D in subsection (1.31).
Marginal note:Application of subsection (1.44)
(1.43)Subsection (1.44) applies in respect of a taxpayer’s right to acquire a security under an agreement if
(a)subsection (1.31) applies to the taxpayer in respect of the agreement;
(b)the security is not a non-qualified security; and
(c)a payment is made to or for the benefit of the taxpayer for the taxpayer’s transfer or disposition of the right.
Marginal note:Cash-out — securities not designated as non-qualified
(1.44)If this subsection applies in respect of a taxpayer’s right to acquire a security under an agreement
(a)no qualifying person may deduct, in computing its income for a taxation year, an amount (other than a designated amount described in subsection (1.2)) in respect of the payment referred to in paragraph (1.43)(c); and
(b)paragraph (1)(d) shall, in respect of the right, be read without reference to its subparagraph (i).
Marginal note:Determination of amounts relating to employee security options
(1.5)For the purpose of paragraph (1)(d),
(a)the amount payable by a taxpayer to acquire a security under an agreement referred to in subsection 7(1) shall be determined without reference to any change in the value of a currency of a country other than Canada, relative to Canadian currency, occurring after the agreement was made;
(b)the fair market value of a security at the time an agreement in respect of the security was made shall be determined on the assumption that all specified events associated with the security that occurred after the agreement was made and before the sale or issue of the security or the disposition of the taxpayer’s rights under the agreement in respect of the security, as the case may be, had occurred immediately before the agreement was made; and
(c)in determining the amount that was included, in respect of a security that a qualifying person has agreed to sell or issue to a taxpayer, in the amount determined under subparagraph 7(1.4)(c)(ii) for the purpose of determining if the condition in paragraph 7(1.4)(c) was satisfied with respect to a particular disposition, an assumption shall be made that all specified events associated with the security that occurred after the particular disposition and before the sale or issue of the security or the taxpayer’s subsequent disposition of rights under the agreement in respect of the security, as the case may be, had occurred immediately before the particular disposition.
Marginal note:Meaning ofspecified event
(1.6)For the purpose of subsection (1.5), a specified event associated with a security is
(a)where the security is a share of the capital stock of a corporation,
(i)a subdivision or consolidation of shares of the capital stock of the corporation,
(ii)a reorganization of share capital of the corporation, and
(iii)a stock dividend of the corporation; and
(b)where the security is a unit of a mutual fund trust,
(i)a subdivision or consolidation of the units of the trust, and
(ii)an issuance of units of the trust as payment, or in satisfaction of a person’s right to enforce payment, out of the trust’s income (determined before the application of subsection 104(6)) or out of the trust’s capital gains.
Marginal note:Reduction in exercise price
(1.7)If the amount payable by a taxpayer to acquire securities under an agreement referred to in subsection 7(1) is reduced at any particular time and the conditions in subsection (1.8) are satisfied in respect of the reduction,
(a)the rights (referred to in this subsection and subsection (1.8) as the “old rights”) that the taxpayer had under the agreement immediately before the particular time are deemed to have been disposed of by the taxpayer immediately before the particular time;
(b)the rights (referred to in this subsection and subsection (1.8) as the “new rights”) that the taxpayer has under the agreement at the particular time are deemed to be acquired by the taxpayer at the particular time; and
(c)the taxpayer is deemed to receive the new rights as consideration for the disposition of the old rights.
Marginal note:Conditions for subsection (1.7) to apply
(1.8)The following are the conditions in respect of the reduction:
(a)that the taxpayer would not be entitled to a deduction under paragraph (1)(d) if the taxpayer acquired securities under the agreement immediately after the particular time and this section were read without reference to subsection (1.7); and
(b)that the taxpayer would be entitled to a deduction under paragraph (1)(d) if the taxpayer
(i)disposed of the old rights immediately before the particular time,
(ii)acquired the new rights at the particular time as consideration for the disposition, and
(iii)acquired securities under the agreement immediately after the particular time.
Marginal note:Notification — non-qualified security
(1.9)If a security to be issued or sold under an agreement between an employee and a qualifying person is a non-qualified security, the employer of the employee shall
(a)notify the employee in writing that the security is a non-qualified security no later than 30 days after the day that the agreement is entered into; and
(b)notify the Minister in prescribed form that the security is a non-qualified security on or before the filing-due date for the taxation year of the qualifying person that includes the time that the agreement is entered into.
Marginal note:Charitable gifts
(2)Where an individual is, during a taxation year, a member of a religious order and has, as such, taken a vow of perpetual poverty, the individual may deduct in computing the individual’s taxable income for the year an amount equal to the total of the individual’s superannuation or pension benefits and the individual’s earned income for the year (within the meaning assigned by section 63) if, of the individual’s income, that amount is paid in the year to the order.
Marginal note:Charitable donation — proceeds of disposition of employee option securities
(2.1)Where a taxpayer, in exercising a right to acquire a security that a particular qualifying person has agreed to sell or issue to the taxpayer under an agreement referred to in subsection 7(1), directs a broker or dealer appointed or approved by the particular qualifying person (or by a qualifying person that does not deal at arm’s length with the particular qualifying person) to immediately dispose of the security and pay all or a portion of the proceeds of disposition of the security to a qualified donee,
(a)if the payment is a gift, the taxpayer is deemed, for the purpose of paragraph (1)(d.01), to have disposed of the security by making a gift of the security to the qualified donee at the time the payment is made; and
(b)the amount deductible under paragraph (1)(d.01) by the taxpayer in respect of the disposition of the security is the amount determined by the formula
A × B/C
where
Marginal note:Deduction for gifts
110.1(1)For the purpose of computing the taxable income of a corporation for a taxation year, there may be deducted such of the following amounts as the corporation claims
Marginal note:Charitable gifts
(a)the total of all amounts each of which is the eligible amount of a gift (other than a gift described in paragraph (c) or (d)) made by the corporation in the year or in any of the five preceding taxation years to a qualified donee, not exceeding the lesser of the corporation’s income for the year and the amount determined by the formula
0.75A + 0.25(B + C + D)
where
(A)the amount included under subsection 13(1) in respect of the class in computing the corporation’s income for the year, and
(B)the total of all amounts each of which is determined in respect of a disposition that is the making of a gift of property of the class by the corporation in the year (in respect of which gift an eligible amount is described in this paragraph for the taxation year) equal to the lesser of
(I)that proportion, of the amount by which the proceeds of disposition of the property exceeds any outlays and expenses, to the extent that they were made or incurred by the corporation for the purpose of making the disposition, that the eligible amount of the gift is of the corporation’s proceeds of disposition in respect of the gift, and
(II)that proportion, of the capital cost to the corporation of the property, that the eligible amount of the gift is of the corporation’s proceeds of disposition in respect of the gift;
(a.1)[Repealed, 2017, c. 20, s. 9]
(b)[Repealed, 2014, c. 39, s. 29]
Marginal note:Gifts to institutions
(c)the total of all amounts each of which is the eligible amount of a gift (other than a gift described in paragraph (d)) of an object that the Canadian Cultural Property Export Review Board has determined meets the criterion set out in paragraph 29(3)(b) of theCultural Property Export and Import Act, which gift was made by the corporation in the year or in any of the five preceding taxation years to an institution or a public authority in Canada that was, at the time the gift was made, designated under subsection 32(2) of that Act either generally or for a specified purpose related to that object; and
Marginal note:Ecological gifts
(d)the total of all amounts each of which is the eligible amount of a gift of land (including a covenant or an easement to which land is subject or, in the case of land in the Province of Quebec, a personal servitude (the rights to which the land is subject and which has a term of not less than 100 years) or a real servitude) if
(i)the fair market value of the gift is certified by the Minister of the Environment,
(ii)the land is certified by that Minister, or by a person designated by that Minister, to be ecologically sensitive land, the conservation and protection of which is, in the opinion of that Minister or the designated person, important to the preservation of Canada’s environmental heritage, and
(iii)the gift was made by the corporation in the year or in any of the 10 preceding taxation years to a qualified donee that is
(A)Her Majesty in right of Canada or of a province,
(B)a municipality in Canada that is approved by that Minister or the designated person in respect of the gift,
(C)a municipal or public body performing a function of government in Canada that is approved by that Minister or the designated person in respect of the gift, or
(D)a registered charity (other than a private foundation) one of the main purposes of which is, in the opinion of that Minister, the conservation and protection of Canada’s environmental heritage, and that is approved by that Minister or the designated person in respect of the gift.
Marginal note:Limitation on deductibility
(1.1)For the purpose of determining the amount deductible under subsection 110.1(1) in computing a corporation’s taxable income for a taxation year,
(a)an amount in respect of a gift is deductible only to the extent that it exceeds amounts in respect of the gift deducted under that subsection in computing the corporation’s taxable income for preceding taxation years; and
(b)no amount in respect of a gift made in a particular taxation year is deductible under any of paragraphs 110.1(1)(a) to (d) until amounts deductible under that paragraph in respect of gifts made in taxation years preceding the particular year have been deducted.
Marginal note:Where control acquired
(1.2)Notwithstanding paragraph 88(1)(e.6), if control of a particular corporation is acquired at any time by a person or group of persons,
(a)no amount is deductible under any of paragraphs (1)(a) to (d) in computing any corporation’s taxable income for a taxation year that ends on or after that time in respect of a gift made by the particular corporation before that time; and
(b)no amount is deductible under any of paragraphs (1)(a) to (d) in computing any corporation’s taxable income for a taxation year that ends on or after that time in respect of a gift made by any corporation on or after that time if the property that is the subject of the gift was acquired by the particular corporation under an arrangement under which it was expected that control of the particular corporation would be so acquired by a person or group of persons, other than a qualified donee that received the gift, and the gift would be so made.
Marginal note:Proof of gift
(2)An eligible amount of a gift shall not be included for the purpose of determining a deduction under subsection (1) unless the making of the gift is evidenced by filing with the Minister
(a)a receipt for the gift that contains prescribed information;
(b)in the case of a gift described in paragraph (1)(c), the certificate issued under subsection 33(1) of theCultural Property Export and Import Act; and
(c)in the case of a gift described in paragraph (1)(d), both certificates referred to in that paragraph.
Marginal note:Where subsection (3) applies
(2.1)Subsection (3) applies in circumstances where
(a)a corporation makes a gift at any time of
(i)capital property to a qualified donee, or
(ii)in the case of a corporation not resident in Canada, real or immovable property situated in Canada to a prescribed donee who provides an undertaking, in a form satisfactory to the Minister, to the effect that the property will be held for use in the public interest; and
(b)the fair market value of the property otherwise determined at that time exceeds
(i)in the case of depreciable property of a prescribed class, the lesser of the undepreciated capital cost of that class at the end of the taxation year of the corporation that includes that time (determined without reference to the proceeds of disposition designated in respect of the property under subsection (3)) and the adjusted cost base to the corporation of the property immediately before that time, and
(ii)in any other case, the adjusted cost base to the corporation of the property immediately before that time.
Marginal note:Gifts of capital property
(3)If this subsection applies in respect of a gift by a corporation of property, and the corporation designates an amount in respect of the gift in its return of income under section 150 for the year in which the gift is made, the amount so designated is deemed to be its proceeds of disposition of the property and, for the purpose of subsection 248(31), the fair market value of the gift, but the amount so designated may not exceed the fair market value of the property otherwise determined and may not be less than the greater of
(a)in the case of a gift made after December 20, 2002, the amount of the advantage, if any, in respect of the gift, and
(b)the amount determined under subparagraph (2.1)(b)(i) or (ii), as the case may be, in respect of the property.
Marginal note:Gifts made by partnership
(4)If at the end of a fiscal period of a partnership a corporation is a member of the partnership, its share of any amount that would, if the partnership were a person, be the eligible amount of a gift made by the partnership to any donee is, for the purpose of this section, deemed to be the eligible amount of a gift made to that donee by the corporation in its taxation year in which the fiscal period of the partnership ends.
Marginal note:Ecological gifts
(5)For the purposes of applying subparagraph 69(1)(b)(ii), this section and section 207.31 in respect of a gift described in paragraph (1)(d) that is made by a taxpayer, the amount that is the fair market value (or, for the purpose of subsection (3), the fair market value otherwise determined) of the gift at the time the gift was made and, subject to subsection (3), the taxpayer’s proceeds of disposition of the gift, is deemed to be the amount determined by the Minister of the Environment to be
(a)where the gift is land, the fair market value of the gift; or
(b)where the gift is a covenant or an easement to which land is subject or, in the case of land in the Province of Quebec, a real or personal servitude, the greater of
(i)the fair market value otherwise determined of the gift, and
(ii)the amount by which the fair market value of the land is reduced as a result of the making of the gift.
Marginal note:Non-qualifying securities
(6)Subsections 118.1(13) to (14) and (16) to (20) apply to a corporation as if the references in those subsections to an individual were read as references to a corporation and as if a non-qualifying security of a corporation included a share (other than a share listed on a designated stock exchange) of the capital stock of the corporation.
Marginal note:Corporation ceasing to exist
(7)If, but for this subsection, a corporation (other than a corporation that was a predecessor corporation in an amalgamation to which subsection 87(1) applied or a corporation that was wound up in a winding-up to which subsection 88(1) applied) would be deemed by subsection 118.1(13) to have made a gift after the corporation ceased to exist, for the purpose of this section, the corporation is deemed to have made the gift in its last taxation year, except that the amount of interest payable under any provision of this Act is the amount that it would be if this subsection did not apply to the gift.
(8) and (9)[Repealed, 2017, c. 20, s. 9]
Marginal note:Options
(10)Subject to subsections (12) and (13), if a corporation has granted an option to a qualified donee in a taxation year, no amount in respect of the option is to be included in computing an amount under any of paragraphs (1)(a) to (d) in respect of the corporation for any year.
Marginal note:Application of subsection (12)
(11)Subsection (12) applies if
(a)an option to acquire a property of a corporation is granted to a qualified donee;
(b)the option is exercised so that the property is disposed of by the corporation and acquired by the qualified donee at a particular time; and
(c)either
(i)the amount that is 80% of the fair market value of the property at the particular time is greater than or equal to the total of
(A)the consideration received by the corporation from the qualified donee for the property, and
(B)the consideration received by the corporation from the qualified donee for the option, or
(ii)the corporation establishes to the satisfaction of the Minister that the granting of the option or the disposition of the property was made by the corporation with the intention to make a gift to the qualified donee.
Marginal note:Granting of an option
(12)If this subsection applies, notwithstanding subsection 49(3),
(a)the corporation is deemed to have received proceeds of disposition of the property equal to the property’s fair market value at the particular time; and
(b)there shall be included in the total referred to in paragraph (1)(a), for the corporation’s taxation year that includes the particular time, the amount by which the property’s fair market value exceeds the total described in subparagraph (11)(c)(i).
Marginal note:Disposition of an option
(13)If an option to acquire a particular property of a corporation is granted to a qualified donee and the option is disposed of by the qualified donee (otherwise than by the exercise of the option) at a particular time
(a)the corporation is deemed to have disposed of a property at the particular time
(i)the adjusted cost base of which to the corporation immediately before the particular time is equal to the consideration, if any, paid by the qualified donee for the option, and
(ii)the proceeds of disposition of which are equal to the lesser of the fair market value of the particular property at the particular time and the fair market value of any consideration (other than a non-qualifying security of any person) received by the qualified donee for the option; and
(b)there shall be included in the total referred to in paragraph (1)(a) for the corporation’s taxation year that includes the particular time the amount, if any, by which the proceeds of disposition as determined by paragraph (a) exceed the consideration, if any, paid by the qualified donee for the option.
Marginal note:Returned property
(14)Subsection (15) applies if a qualified donee has issued to a corporation a receipt referred to in subsection (2) in respect of a transfer of a property (in this subsection and subsection (15) referred to as the “original property”) and a particular property that is
(a)the original property is later transferred to the corporation (unless that later transfer is reasonable consideration or remuneration for property acquired by or services rendered to a person); or
(b)any other property that may reasonably be considered compensation for or a substitute for, in whole or in part, the original property, is later transferred to the corporation.
Marginal note:Returned property
(15)If this subsection applies, then
(a)irrespective of whether the transfer of the original property by the corporation to the qualified donee referred to in subsection (14) was a gift, the corporation is deemed not to have disposed of the original property at the time of that transfer nor to have made a gift;
(b)if the particular property is identical to the original property, the particular property is deemed to be the original property; and
(c)if the particular property is not the original property, then
(i)the corporation is deemed to have disposed of the original property at the time that the particular property is transferred to the corporation for proceeds of disposition equal to the greater of the fair market value of the particular property at that time and the fair market value of the original property at the time that it was transferred by the corporation to the donee, and
(ii)if the transfer of the original property by the corporation would be a gift if this section were read without reference to paragraph (a), the corporation is deemed to have, at the time of that transfer, transferred to the donee a property that is the subject of a gift having a fair market value equal to the amount, if any, by which the fair market value of the original property at the time of that transfer exceeds the fair market value of the particular property at the time that it is transferred to the corporation.
Marginal note:Information return
(16)If subsection (15) applies in respect of a transfer of property to a corporation and that property has a fair market value greater than $50, the transferor must file an information return containing prescribed information with the Minister not later than 90 days after the day on which the property was transferred and provide a copy of the return to the corporation.
Marginal note:Reassessment
(17)If subsection (15) applies in respect of a transfer of property to a corporation, the Minister may reassess a return of income of any person to the extent that the reassessment can reasonably be regarded as relating to the transfer.
Marginal note:Definitions
110.2(1)The definitions in this subsection apply in this section and section 120.31.
eligible taxation year, in respect of a qualifying amount received by an individual, means a taxation year
(a)that ended after 1977 and before the year in which the individual received the qualifying amount;
(b)throughout which the individual was resident in Canada;
(c)that did not end in a calendar year in which the individual became a bankrupt; and
(d)that was not included in an averaging period, within the meaning assigned by section 119 (as it read in its application to the 1987 taxation year), pursuant to an election that was made and not revoked by the individual under that section. (année d’imposition admissible)
qualifying amountreceived by an individual in a taxation year means an amount (other than the portion of the amount that can reasonably be considered to be received as, on account of, in lieu of payment of or in satisfaction of, interest) that is included in computing the individual’s income for the year and is
(a)an amount
(i)that is received pursuant to an order or judgment of a competent tribunal, an arbitration award or a contract by which the payor and the individual terminate a legal proceeding, and
(ii)that is
(A)included in computing the individual’s income from an office or employment, or
(B)received as, on account of, in lieu of payment of or in satisfaction of, damages in respect of the individual’s loss of an office or employment,
(b)a superannuation or pension benefit (other than a benefit referred to in clause 56(1)(a)(i)(B)) received on account of, in lieu of payment of or in satisfaction of, a series of periodic payments (other than payments that would have otherwise been made in the year or in a subsequent taxation year),
(c)an amount described in paragraph 6(1)(f) or (f.1), subparagraph 56(1)(a)(iv) or paragraph 56(1)(b), or
(d)a prescribed amount or benefit,
except to the extent that the individual may deduct for the year an amount under paragraph 8(1)(b), (n) or (n.1), 60(n) or (o.1) or 110(1)(f) in respect of the amount so included. (montant admissible)
specified portion, in relation to an eligible taxation year, of a qualifying amount received by an individual means the portion of the qualifying amount that relates to the year, to the extent that the individual’s eligibility to receive the portion existed in the year. (partie déterminée)
Marginal note:Deduction for lump-sum payments
(2)There may be deducted in computing the taxable income of an individual (other than a trust) for a particular taxation year the total of all amounts each of which is a specified portion of a qualifying amount received by the individual in the particular year, if that total is $3,000 or more.
110.4[Repealed, 2000, c. 19, s. 18]
Marginal note:Additions for foreign tax deductions
110.5There shall be added to a corporation’s taxable income otherwise determined for a taxation year such amount as the corporation may claim to the extent that the addition thereof
(a)increases any amount deductible by the corporation under subsection 126(1) or (2) for the year; and
(b)does not increase an amount deductible by the corporation under any of sections 125, 125.1, 127, 127.2 and 127.3 for the year.
Marginal note:Definitions
110.6(1)For the purposes of this section,
annual gains limitof an individual for a taxation year means the amount determined by the formula
A - B
where
(a)the amount determined in respect of the individual for the year under paragraph 3(b) in respect of capital gains and capital losses, and
(b)the amount that would be determined in respect of the individual for the year under paragraph 3(b) in respect of capital gains and losses if the only properties referred to in that paragraph were properties that, at the time they were disposed of, were qualified farm properties, qualified fishing properties, qualified farm or fishing properties and qualified small business corporation shares, and
(a)the amount, if any, by which
(i)the individual’s net capital losses for other taxation years deducted under paragraph 111(1)(b) in computing the individual’s taxable income for the year
exceeds
(ii)the amount, if any, by which the amount determined in respect of the individual for the year under paragraph 3(b) in respect of capital gains and capital losses exceeds the amount determined for A in respect of the individual for the year, and
(b)all of the individual’s allowable business investment losses for the year; (plafond annuel des gains)
childhas the meaning assigned by subsection 70(10); (enfant)
cumulative gains limitof an individual at the end of a taxation year means the amount, if any, by which
(a)the total of all amounts determined in respect of the individual for the year or preceding taxation years that end after 1984 for A in the definitionannual gains limit
exceeds the total of
(b)all amounts determined in respect of the individual for the year or preceding taxation years that end after 1984 for B in the definitionannual gains limit,
(c)the amount, if any, deducted under paragraph 3(e) in computing the individual’s income for the 1985 taxation year,
(d)all amounts deducted under this section in computing the individual’s taxable incomes for preceding taxation years, and
(e)the individual’s cumulative net investment loss at the end of the year; (plafond des gains cumulatifs)
cumulative net investment lossof an individual at the end of a taxation year means the amount, if any, by which
(a)the total of all amounts each of which is the investment expense of the individual for the year or a preceding taxation year ending after 1987
exceeds
(b)the total of all amounts each of which is the investment income of the individual for the year or a preceding taxation year ending after 1987; (perte nette cumulative sur placements)
eligible real property gain[Repealed, 1995, c. 3, s. 32]
eligible real property loss[Repealed, 1995, c. 3, s. 32]
interest in a family farm or fishing partnership, of an individual (other than a trust that is not a personal trust) at any time, means a partnership interest owned by the individual at that time if
(a)throughout any 24-month period ending before that time, more than 50% of the fair market value of the property of the partnership was attributable to
(i)property that was used principally in the course of carrying on a farming or fishing business in Canada in which the individual, a beneficiary referred to in clause (C) or a spouse, common-law partner, child or parent of the individual or of a beneficiary referred to in clause (C) was actively engaged on a regular and continuous basis, by
(A)the partnership,
(B)the individual,
(C)if the individual is a personal trust, a beneficiary of the trust,
(D)a spouse, common-law partner, child or parent of the individual or of a beneficiary referred to in clause (C),
(E)a corporation, a share of the capital stock of which was a share of the capital stock of a family farm or fishing corporation of the individual, a beneficiary referred to in clause (C) or a spouse, common-law partner, child or parent of the individual or of a beneficiary referred to in clause (C), or
(F)a partnership, a partnership interest in which was an interest in a family farm or fishing partnership of the individual, a beneficiary referred to in clause (C) or a spouse, common-law partner, child or parent of the individual or of a beneficiary referred to in clause (C),
(ii)shares of the capital stock or indebtedness of one or more corporations of which all or substantially all of the fair market value of the property was attributable to properties described in subparagraph (iv),
(iii)a partnership interest in or indebtedness of one or more partnerships of which all or substantially all of the fair market value of the property was attributable to properties described in subparagraph (iv), or
(iv)properties described in any of subparagraphs (i) to (iii), and
(b)at that time, all or substantially all of the fair market value of the property of the partnership was attributable to property described in subparagraph (a)(iv); (participation dans une société de personnes agricole ou de pêche familiale)
interest in a family farm partnership[Repealed, 2014, c. 39, s. 30]
interest in a family fishing partnership[Repealed, 2014, c. 39, s. 30]
investment expenseof an individual for a taxation year means the total of
(a)all amounts deducted in computing the individual’s income for the year from property (except to the extent that the amounts were otherwise taken into account in computing the individual’s investment expense or investment income for the year) other than any amounts deducted under
(i)paragraph 20(1)(c), 20(1)(d), 20(1)(e) or 20(1)(e.1) of this Act or paragraph 20(1)(k) of theIncome Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, in respect of borrowed money that was used by the individual, or that was used to acquire property that was used by the individual,
(A)to make a payment as consideration for an income-averaging annuity contract,
(B)to pay a premium under a registered retirement savings plan, or
(C)to make a contribution to a pooled registered pension plan, registered pension plan or deferred profit sharing plan, or
(ii)paragraph 20(1)(j) or subsection 65(1), 66(4), 66.1(3), 66.2(2), 66.21(4) or 66.4(2),
(b)the total of
(i)all amounts deducted under paragraph 20(1)(c), 20(1)(d), 20(1)(e), 20(1)(e.1), 20(1)(f) or 20(1)(bb) of this Act or paragraph 20(1)(k) of theIncome Tax Act, chapter 148 of the Revised Statutes of Canada, 1952 in computing the individual’s income for the year from a partnership of which the individual was a specified member in the fiscal period of the partnership ending in the year, and
(ii)all amounts deducted under subparagraph 20(1)(e)(vi) in computing the individual’s income for the year in respect of an expense incurred by a partnership of which the individual was a specified member in the fiscal period of the partnership ending immediately before it ceased to exist,
(c)the total of
(i)all amounts (other than allowable capital losses) deducted in computing the individual’s income for the year in respect of the individual’s share of the amount of any loss of a partnership of which the individual was a specified member in the partnership’s fiscal period ending in the year, and
(ii)all amounts each of which is an amount deducted under paragraph 111(1)(e) in computing the individual’s taxable income for the year,
(d)50% of the total of all amounts each of which is an amount deducted under subsection 66(4), 66.1(3), 66.2(2), 66.21(4) or 66.4(2) in computing the individual’s income for the year in respect of expenses
(i)incurred and renounced under subsection 66(12.6), (12.601), (12.62) or (12.64) by a corporation, or
(ii)incurred by a partnership of which the individual was a specified member in the fiscal period of the partnership in which the expense was incurred, and
(e)the total of all amounts each of which is the amount of the individual’s loss for the year from
(i)property, or
(ii)renting or leasing a rental property (within the meaning assigned by subsection 1100(14) of theIncome Tax Regulations) or a property described in Class 31 or 32 of Schedule II to theIncome Tax Regulations
owned by the individual or by a partnership of which the individual was a member, other than a partnership of which the individual was a specified member in the partnership’s fiscal period ending in the year, and
(f)the amount, if any, by which the total of the individual’s net capital losses for other taxation years deducted under paragraph 111(1)(b) in computing the individual’s taxable income for the year exceeds the amount determined in respect of the individual for the year under paragraph (a) of the description of B in the definitionannual gains limit; (frais de placement)
investment incomeof an individual for a taxation year means the total of
(a)all amounts included in computing the individual’s income for the year from property (other than an amount included under subsection 15(2) or paragraph 56(1)(d) of this Act or paragraph 56(1)(d.1) of theIncome Tax Act, chapter 148 of the Revised Statutes of Canada 1952), including, for greater certainty, any amount so included under subsection 13(1) in respect of a property any income from which would be income from property (except to the extent that the amount was otherwise taken into account in computing the individual’s investment income or investment expense for the year),
(b)all amounts (other than taxable capital gains) included in computing the individual’s income for the year in respect of the individual’s share of the income of a partnership of which the individual was a specified member in the partnership’s fiscal period ending in the year, including, for greater certainty, the individual’s share of all amounts included under subsection 13(1) in computing the income of the partnership,
(c)50% of all amounts included under subsection 59(3.2) in computing the individual’s income for the year,
(d)all amounts each of which is the amount of the individual’s income for the year from
(i)a property, or
(ii)renting or leasing a rental property (within the meaning assigned by subsection 1100(14) of theIncome Tax Regulations) or a property described in Class 31 or 32 of Schedule II to theIncome Tax Regulations
owned by the individual or by a partnership of which the individual was a member (other than a partnership of which the individual was a specified member in the partnership’s fiscal period ending in the year), including, for greater certainty, any amount included under subsection 13(1) in computing the individual’s income for the year in respect of a rental property of the individual or the partnership or in respect of a property any income from which would be income from property,
(e)the amount, if any, by which
(i)the total of all amounts (other than amounts in respect of income-averaging annuity contracts or annuity contracts purchased under deferred profit sharing plans or plans referred to in subsection 147(15) as revoked plans) included under paragraph 56(1)(d) of this Act or paragraph 56(1)(d.1) of theIncome Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, in computing the individual’s income for the year
exceeds
(ii)the total of all amounts deducted under paragraph 60(a) in computing the individual’s income for the year, and
(f)the amount, if any, by which the total of all amounts included under paragraph 3(b) in respect of capital gains and capital losses in computing the individual’s income for the year exceeds the amount determined in respect of the individual for the year for A in the definitionannual gains limit; (revenu de placements)
non-qualifying real property[Repealed, 1995, c. 3, s. 32]
qualified farm or fishing property, of an individual (other than a trust that is not a personal trust) at any time, means a property that is owned at that time by the individual, the spouse or common-law partner of the individual or a partnership, an interest in which is an interest in a family farm or fishing partnership of the individual or the individual’s spouse or common-law partner and that is
(a)real or immovable property or a fishing vessel that was used in the course of carrying on a farming or fishing business in Canada by,
(i)the individual,
(ii)if the individual is a personal trust, a beneficiary of the trust that is entitled to receive directly from the trust any income or capital of the trust,
(iii)a spouse, common-law partner, child or parent of an individual referred to in subparagraph (i) or (ii),
(iv)a corporation, a share of the capital stock of which is a share of the capital stock of a family farm or fishing corporation of an individual referred to in any of subparagraphs (i) to (iii), or
(v)a partnership, an interest in which is an interest in a family farm or fishing partnership of an individual referred to in any of subparagraphs (i) to (iii),
(b)a share of the capital stock of a family farm or fishing corporation of the individual or the individual’s spouse or common-law partner,
(c)an interest in a family farm or fishing partnership of the individual or the individual’s spouse or common-law partner, or
(d)a property included in Class 14.1 of Schedule II to theIncome Tax Regulations, used by a person or partnership referred to in any of subparagraphs (a)(i) to (v), or by a personal trust from which the individual acquired the property, in the course of carrying on a farming or fishing business in Canada; (bien agricole ou de pêche admissible)
qualified farm property[Repealed, 2014, c. 39, s. 30]
qualified fishing property[Repealed, 2014, c. 39, s. 30]
qualified small business corporation shareof an individual (other than a trust that is not a personal trust) at any time (in this definition referred to as the “determination time”) means a share of the capital stock of a corporation that,
(a)at the determination time, is a share of the capital stock of a small business corporation owned by the individual, the individual’s spouse or common-law partner or a partnership related to the individual,
(b)throughout the 24 months immediately preceding the determination time, was not owned by anyone other than the individual or a person or partnership related to the individual, and
(c)throughout that part of the 24 months immediately preceding the determination time while it was owned by the individual or a person or partnership related to the individual, was a share of the capital stock of a Canadian-controlled private corporation more than 50% of the fair market value of the assets of which was attributable to
(i)assets used principally in an active business carried on primarily in Canada by the corporation or by a corporation related to it,
(ii)shares of the capital stock or indebtedness of one or more other corporations that were connected (within the meaning of subsection 186(4) on the assumption that each of the other corporations was apayer corporationwithin the meaning of that subsection) with the corporation where
(A)throughout that part of the 24 months immediately preceding the determination time that ends at the time the corporation acquired such a share or indebtedness, the share or indebtedness was not owned by anyone other than the corporation, a person or partnership related to the corporation or a person or partnership related to such a person or partnership, and
(B)throughout that part of the 24 months immediately preceding the determination time while such a share or indebtedness was owned by the corporation, a person or partnership related to the corporation or a person or partnership related to such a person or partnership, it was a share or indebtedness of a Canadian-controlled private corporation more than 50% of the fair market value of the assets of which was attributable to assets described in subparagraph (iii), or
(iii)assets described in either of subparagraph (i) or (ii)
except that
(d)where, for any particular period of time in the 24-month period ending at the determination time, all or substantially all of the fair market value of the assets of a particular corporation that is the corporation or another corporation that was connected with the corporation cannot be attributed to assets described in subparagraph (i), shares or indebtedness of corporations described in clause (B), or any combination thereof, the reference in clause (B) to “more than 50%” shall, for the particular period of time, be read as a reference to “all or substantially all” in respect of each other corporation that was connected with the particular corporation and, for the purpose of this paragraph, a corporation is connected with another corporation only where
(i)the corporation is connected (within the meaning of subsection 186(4) on the assumption that the corporation was apayer corporationwithin the meaning of that subsection) with the other corporation, and
(ii)the other corporation owns shares of the capital stock of the corporation and, for the purpose of this subparagraph, the other corporation shall be deemed to own the shares of the capital stock of any corporation that are owned by a corporation any shares of the capital stock of which are owned or are deemed by this subparagraph to be owned by the other corporation,
(e)where, at any time in the 24-month period ending at the determination time, the share was substituted for another share, the share shall be considered to have met the requirements of this definition only where the other share
(i)was not owned by any person or partnership other than a person or partnership described in paragraph (b) throughout the period beginning 24 months before the determination time and ending at the time of substitution, and
(ii)was a share of the capital stock of a corporation described in paragraph (c) throughout that part of the period referred to in subparagraph (i) during which such share was owned by a person or partnership described in paragraph (b), and
(f)where, at any time in the 24-month period ending at the determination time, a share referred to in subparagraph (ii) is substituted for another share, that share shall be considered to meet the requirements of subparagraph (ii) only where the other share
(i)was not owned by any person or partnership other than a person or partnership described in clause (A) throughout the period beginning 24 months before the determination time and ending at the time of substitution, and
(ii)was a share of the capital stock of a corporation described in paragraph (c) throughout that part of the period referred to in subparagraph (i) during which the share was owned by a person or partnership described in clause (A); (action admissible de petite entreprise)
share of the capital stock of a family farm corporation[Repealed, 2014, c. 39, s. 30]
share of the capital stock of a family farm or fishing corporation, of an individual (other than a trust that is not a personal trust) at any time, means a share of the capital stock of a corporation owned by the individual at that time if
(a)throughout any 24-month period ending before that time, more than 50% of the fair market value of the property owned by the corporation was attributable to
(i)property that was used principally in the course of carrying on a farming or fishing business in Canada in which the individual, a beneficiary referred to in clause (C) or a spouse or common-law partner, child or parent of the individual or of a beneficiary referred to in clause (C), was actively engaged on a regular and continuous basis, by
(A)the corporation,
(B)the individual,
(C)if the individual is a personal trust, a beneficiary of the trust,
(D)a spouse, common-law partner, child or parent of the individual or of a beneficiary referred to in clause (C),
(E)another corporation that is related to the corporation and of which a share of the capital stock was a share of the capital stock of a family farm or fishing corporation of the individual, a beneficiary referred to in clause (C) or a spouse, common-law partner, child or parent of the individual or of a beneficiary referred to in clause (C), or
(F)a partnership, an interest in which was an interest in a family farm or fishing partnership of the individual, a beneficiary referred to in clause (C) or a spouse, common-law partner, child or parent of the individual or of such a beneficiary,
(ii)shares of the capital stock or indebtedness of one or more corporations of which all or substantially all of the fair market value of the property was attributable to property described in subparagraph (iv),
(iii)a partnership interest in or indebtedness of one or more partnerships of which all or substantially all of the fair market value of the property was attributable to properties described in subparagraph (iv), or
(iv)properties described in any of subparagraphs (i) to (iii), and
(b)at that time, all or substantially all of the fair market value of the property owned by the corporation was attributable to property described in subparagraph (a)(iv). (action du capital-actions d’une société agricole ou de pêche familiale)
share of the capital stock of a family fishing corporation[Repealed, 2014, c. 39, s. 30]
Marginal note:Value of NISA
(1.1)For the purposes of the definitionsqualified small business corporation shareandshare of the capital stock of a family farm or fishing corporationin subsection (1), the fair market value of a net income stabilization account is deemed to be nil.
(1.2)[Repealed, 2014, c. 39, s. 30]
Marginal note:Farming or fishing property — conditions
(1.3)For the purpose of applying the definitionqualified farm or fishing property, in subsection (1), of an individual, at any time, a property owned at that time by the individual, the spouse or common-law partner of the individual, or a partnership, an interest in which is an interest in a family farm or fishing partnership of the individual or of the individual’s spouse or common-law partner, will not be considered to have been used in the course of carrying on a farming or fishing business in Canada, unless
(a)the following apply in respect of the property or property for which the property was substituted (in this paragraph referred to as “the property”),
(i)the property was owned throughout the period of at least 24 months immediately preceding that time by one or more of
(A)the individual, or a spouse, common-law partner, child or parent of the individual,
(B)a partnership, an interest in which is an interest in a family farm or fishing partnership of the individual or of the individual’s spouse or common-law partner,
(C)if the individual is a personal trust, the individual from whom the trust acquired the property or a spouse, common-law partner, child or parent of that individual, or
(D)a personal trust from which the individual or a child or parent of the individual acquired the property, and
(ii)either
(A)in at least two years while the property was owned by one or more persons or partnerships referred to in subparagraph (i),
(I)the gross revenue of a person (in this subclause referred to as the “operator”) referred to in subparagraph (i) from the farming or fishing business referred to in subclause (II) for the period during which the property was owned by a person or partnership described in subparagraph (i) exceeded the income of the operator from all other sources for that period, and
(II)the property was used principally in a farming or fishing business carried on in Canada in which an individual referred to in subparagraph (i), or where the individual is a personal trust, a beneficiary of the trust, was actively engaged on a regular and continuous basis, or
(B)throughout a period of at least 24 months while the property was owned by one or more persons or partnerships referred to in subparagraph (i), the property was used by a corporation referred to in subparagraph (a)(iv) of the definitionqualified farm or fishing propertyin subsection (1) or by a partnership referred to in subparagraph (a)(v) of that definition in a farming or fishing business in which an individual referred to in any of subparagraphs (a)(i) to (iii) of that definition was actively engaged on a regular and continuous basis; or
(b)[Repealed, 2013, c. 34, s. 240]
(c)if the property or property for which the property was substituted was last acquired by the individual or partnership before June 18, 1987 or after June 17, 1987 under an agreement in writing entered into before that date,
(i)in the year the property was disposed of by the individual, the property was used principally in the course of carrying on the business of farming in Canada by
(A)the individual, or a spouse, common-law partner, child or parent of the individual,
(B)a beneficiary referred to in subparagraph (a)(ii) of the definitionqualified farm or fishing propertyin subsection (1) or a spouse, common-law partner, child or parent of that beneficiary,
(C)a corporation referred to in subparagraph (a)(iv) of the definitionqualified farm or fishing propertyin subsection (1),
(D)a partnership referred to in subparagraph (a)(v) of the definitionqualified farm or fishing propertyin subsection (1), or
(E)a personal trust from which the individual acquired the property, or
(ii)in at least five years during which the property was owned by a person described in any of clauses (A) to (E), the property was used principally in the course of carrying on the business of farming in Canada by
(A)the individual, or a spouse, common-law partner, child or parent of the individual,
(B)a beneficiary referred to in subparagraph (a)(ii) of the definitionqualified farm or fishing propertyin subsection (1) or a spouse, common-law partner, child or parent of that beneficiary,
(C)a corporation referred to in subparagraph (a)(iv) of the definitionqualified farm or fishing propertyin subsection (1),
(D)a partnership referred to in subparagraph (a)(v) of the definitionqualified farm or fishing propertyin subsection (1), or
(E)a personal trust from which the individual acquired the property.
Marginal note:Capital gains deduction — qualified farm or fishing property
(2)In computing the taxable income for a taxation year of an individual (other than a trust) who was resident in Canada throughout the year and who disposed of qualified farm or fishing property in the year or a preceding taxation year (or who disposed of before 2014 property that was qualified farm property or qualified fishing property at the time of disposition), there may be deducted such amount as the individual may claim not exceeding the least of
(a)the amount determined by the formula
[$400,000 – (A + B + C + D)] × E
where
(i)before 1988, or
(ii)after October 17, 2000,
(i)3/4 of an amount deducted under this section in computing the individual’s taxable income for a preceding taxation year that ended after 1987 and before 1990 (other than amounts deducted under this section for a taxation year in respect of an amount that was included in computing an individual’s income for that year because of subparagraph 14(1)(a)(v) as that subparagraph applied for taxation years that ended before February 28, 2000), or
(ii)3/4 of an amount deducted under this section in computing the individual’s taxable income for a preceding taxation year that began after February 27, 2000 and ended before October 18, 2000,
(i)for a preceding taxation year that ended after 1989 and before February 28, 2000, or
(ii)in respect of an amount that was included because of subparagraph 14(1)(a)(v) (as that subparagraph applied for taxation years that ended before February 28, 2000) in computing the individual’s income for a taxation year that began after 1987 and ended before 1990,
(i)in the case of a taxation year that includes February 28, 2000 or October 17, 2000, the amount determined by the formula
2 × (F + G)/H
where
(A)the amount deemed by subsection 14(1.1) to be a taxable capital gain of the taxpayer for the taxation year multiplied by
(I)where that amount is determined by reference to paragraph 14(1.1)(a), the reciprocal of the fraction obtained by multiplying the fraction 3/4 by the fraction in paragraph 14(1)(b) that applies to the taxpayer for the taxation year,
(II)where that amount is determined by reference to paragraph 14(1.1)(b), and the taxation year does not end after February 27, 2000 and before October 18, 2000, 2, and
(III)where that amount is determined by reference to paragraph 14(1.1)(b), and the taxation year ends after February 27, 2000 and before October 18, 2000, 3/2, and
(B)the amount determined for G multiplied by the reciprocal of the fraction in paragraph 38(a) that applies to the taxpayer for the taxation year, and
(ii)in any other case, 1,
(b)the individual’s cumulative gains limit at the end of the year,
(c)the individual’s annual gains limit for the year, and
(d)the amount that would be determined in respect of the individual for the year under paragraph 3(b) in respect of capital gains and capital losses if the only properties referred to in that paragraph were properties that, at the time they were disposed of, were qualified farm properties, qualified fishing properties or qualified farm or fishing properties.
Marginal note:Capital gains deduction — qualified small business corporation shares
(2.1)In computing the taxable income for a taxation year of an individual (other than a trust) who was resident in Canada throughout the year and who disposed of a share of a corporation in the year or a preceding taxation year and after June 17, 1987 that, at the time of disposition, was a qualified small business corporation share of the individual, there may be deducted such amount as the individual may claim not exceeding the least of
(a)the amount determined by the formula in paragraph (2)(a) in respect of the individual for the year,
(b)the amount, if any, by which the individual’s cumulative gains limit at the end of the year exceeds the amount deducted under subsection 110.6(2) in computing the individual’s taxable income for the year,
(c)the amount, if any, by which the individual’s annual gains limit for the year exceeds the amount deducted under subsection 110.6(2) in computing the individual’s taxable income for the year, and
(d)the amount that would be determined in respect of the individual for the year under paragraph 3(b) (to the extent that that amount is not included in computing the amount determined under paragraph (2)(d) in respect of the individual) in respect of capital gains and capital losses if the only properties referred to in paragraph 3(b) were qualified small business corporation shares of the individual.
Marginal note:Additional deduction — qualified farm or fishing property
(2.2)In computing the taxable income for a taxation year of an individual (other than a trust) who was resident in Canada throughout the year and who disposed of qualified farm or fishing property in the year or a preceding taxation year and after April 20, 2015, there may be deducted an amount claimed by the individual that does not exceed the least of
(a)the amount, if any, by which $500,000 exceeds the total of
(i)$400,000 adjusted for each year after 2014 in the manner set out by section 117.1, and
(ii)the total of all amounts each of which is an amount deducted under this subsection in computing the individual’s taxable income for a preceding taxation year that ended after 2014,
(b)the amount, if any, by which the individual’s cumulative gains limit at the end of the year exceeds the total of all amounts each of which is an amount deducted by the individual under subsection (2) or (2.1) in computing the individual’s taxable income for the year,
(c)the amount, if any, by which the individual’s annual gains limit for the year exceeds the total of all amounts each of which is an amount deducted by the individual under subsection (2) or (2.1) in computing the individual’s taxable income for the year, and
(d)the amount that would be determined in respect of the individual for the year under paragraph 3(b) in respect of capital gains and capital losses if the only properties referred to in that paragraph were qualified farm or fishing properties disposed of by the individual after April 20, 2015.
Marginal note:Additional deduction — ordering rule
(2.3)Subsection (2.2) does not apply in computing the taxable income for a taxation year of an individual unless the individual has claimed the maximum amount that could be claimed under subsections (2) and (2.1) for the taxation year.
(3)[Repealed, 1995, c. 3, s. 32]
Marginal note:Maximum capital gains deduction
(4)Notwithstanding subsections (2) and (2.1), the total amount that may be deducted under this section in computing an individual’s income for a taxation year shall not exceed the total of the amount determined by the formula in paragraph (2)(a) and the amount that may be deducted under subsection (2.2), in respect of the individual for the year.
Marginal note:Deemed resident in Canada
(5)For the purposes of subsections (2) to (2.2), an individual is deemed to have been resident in Canada throughout a particular taxation year if
(a)the individual was resident in Canada at any time in the particular taxation year; and
(b)the individual was resident in Canada throughout the immediately preceding taxation year or throughout the immediately following taxation year.
Marginal note:Failure to report capital gain
(6)Notwithstanding subsections (2) to (2.2), no amount may be deducted under this section in respect of a capital gain of an individual for a particular taxation year in computing the individual’s taxable income for the particular taxation year or any subsequent year, if
(a)the individual knowingly or under circumstances amounting to gross negligence
(i)fails to file the individual’s return of income for the particular taxation year within one year after the taxpayer’s filing-due date for the particular taxation year, or
(ii)fails to report the capital gain in the individual’s return of income for the particular taxation year; and
(b)the Minister establishes the facts justifying the denial of such an amount under this section.
Marginal note:Deduction not permitted
(7)Notwithstanding subsections (2) to (2.2), no amount may be deducted under this section in computing an individual’s taxable income for a taxation year in respect of a capital gain of the individual for the taxation year if the capital gain is from a disposition of property which disposition is part of a series of transactions or events
(a)that includes a dividend received by a corporation to which dividend subsection 55(2) does not apply but would apply if this Act were read without reference to paragraph 55(3)(b); or
(b)in which any property is acquired by a corporation or partnership for consideration that is significantly less than the fair market value of the property at the time of acquisition (other than an acquisition as the result of an amalgamation or merger of corporations or the winding-up of a corporation or partnership or a distribution of property of a trust in satisfaction of all or part of a corporation’s capital interest in the trust).
Marginal note:Deduction not permitted
(8)Notwithstanding subsections (2) to (2.2), if an individual has a capital gain for a taxation year from the disposition of a property and it can reasonably be concluded, having regard to all the circumstances, that a significant part of the capital gain is attributable to the fact that dividends were not paid on a share (other than a prescribed share) or that dividends paid on such a share in the taxation year or in any preceding taxation year were less than 90% of the average annual rate of return on that share for that year, no amount in respect of that capital gain shall be deducted under this section in computing the individual’s taxable income for the year.
Marginal note:Average annual rate of return
(9)For the purpose of subsection 110.6(8), the average annual rate of return on a share (other than a prescribed share) of a corporation for a taxation year is the annual rate of return by way of dividends that a knowledgeable and prudent investor who purchased the share on the day it was issued would expect to receive in that year, other than the first year after the issue, in respect of the share if
(a)there was no delay or postponement of the payment of dividends and no failure to pay dividends in respect of the share;
(b)there was no variation from year to year in the amount of dividends payable in respect of the share (other than where the amount of dividends payable is expressed as an invariant percentage of or by reference to an invariant difference between the dividend expressed as a rate of interest and a generally quoted market interest rate); and
(c)the proceeds to be received by the investor on the disposition of the share are the same amount the corporation received as consideration on the issue of the share.
Marginal note:Where deduction not permitted
(11)Where it is reasonable to consider that one of the main reasons for an individual acquiring, holding or having an interest in a partnership or trust (other than an interest in a personal trust) or a share of an investment corporation, mortgage investment corporation or mutual fund corporation, or for the existence of any terms, conditions, rights or other attributes of the interest or share, is to enable the individual to receive or have allocated to the individual a percentage of any capital gain or taxable capital gain of the partnership, trust or corporation that is larger than the individual’s percentage of the income of the partnership, trust or corporation, as the case may be, notwithstanding any other provision of this Act,
(a)no amount may be deducted under this section by the individual in respect of any such gain allocated or distributed to the individual after November 21, 1985; and
(b)where the individual is a trust, any such gain allocated or distributed to it after November 21, 1985 shall not be included in computing its eligible taxable capital gain (within the meaning assigned by subsection 108(1)).
(12)[Repealed, 2014, c. 39, s. 30]
Marginal note:Determination under para. 3(b)
(13)For the purposes of this section, the amount determined under paragraph 3(b) in respect of an individual for a period throughout which the individual was not resident in Canada is nil.
Marginal note:Related persons, etc.
(14)For the purposes of the definitionqualified small business corporation sharein subsection 110.6(1),
(a)a taxpayer shall be deemed to have disposed of shares that are identical properties in the order in which the taxpayer acquired them;
(b)in determining whether a corporation is a small business corporation or a Canadian-controlled private corporation at any time, a right referred to in paragraph 251(5)(b) shall not include a right under a purchase and sale agreement relating to a share of the capital stock of a corporation;
(c)a personal trust shall be deemed
(i)to be related to a person or partnership for any period throughout which the person or partnership was a beneficiary of the trust, and
(ii)in respect of shares of the capital stock of a corporation, to be related to the person from whom it acquired those shares where, at the time the trust disposed of the shares, all of the beneficiaries (other than registered charities) of the trust were related to that person or would have been so related if that person were living at that time;
(d)a partnership shall be deemed to be related to a person for any period throughout which the person was a member of the partnership;
(d.1)a person who is a member of a partnership that is a member of another partnership is deemed to be a member of the other partnership;
(e)where a corporation acquires shares of a class of the capital stock of another corporation from any person, it shall be deemed in respect of those shares to be related to the person where all or substantially all the consideration received by that person from the corporation in respect of those shares was common shares of the capital stock of the corporation;
(f)shares issued after June 13, 1988 by a corporation to a particular person or partnership shall be deemed to have been owned immediately before their issue by a person who was not related to the particular person or partnership unless the shares were issued
(i)as consideration for other shares,
(ii)as part of a transaction or series of transactions in which the person or partnership disposed of property to the corporation that consisted of
(A)all or substantially all the assets used in an active business carried on by that person or the members of that partnership, or
(B)an interest in a partnership all or substantially all the assets of which were used in an active business carried on by the members of the partnership, or
(iii)as payment of a stock dividend; and
(g)where, immediately before the death of an individual, or, in the case of a deemed transfer under subsection 248(23), immediately before the time that is immediately before the death of an individual, a share would, but for paragraph (a) of the definitionqualified small business corporation sharein subsection 110.6(1), be a qualified small business corporation share of the individual, the share shall be deemed to be a qualified small business corporation share of the individual if it was a qualified small business corporation share of the individual at any time in the 12-month period immediately preceding the death of the individual.
Marginal note:Value of assets of corporations
(15)For the purposes of the definitionsqualified small business corporation shareandshare of the capital stock of a family farm or fishing corporationin subsection (1), the definitionshare of the capital stock of a family farm or fishing corporationin subsection 70(10) and the definitionsmall business corporationin subsection 248(1),
(a)where a person (in this subsection referred to as the “insured”), whose life was insured under an insurance policy owned by a particular corporation, owned shares of the capital stock (in this subsection referred to as the “subject shares”) of the particular corporation, any corporation connected with the particular corporation or with which the particular corporation is connected or any corporation connected with any such corporation or with which any such corporation is connected (within the meaning of subsection 186(4) on the assumption that the corporation referred to in this subsection was a payer corporation within the meaning of that subsection),
(i)the fair market value of the life insurance policy shall, at any time before the death of the insured, be deemed to be its cash surrender value (within the meaning assigned by subsection 148(9)) at that time, and
(ii)the total fair market value of assets — other than assets described in any of subparagraphs (c)(i) to (iii) of the definitionqualified small business corporation sharein subsection (1), any of subparagraphs (a)(i) to (iii) of the definitionshare of the capital stock of a family farm or fishing corporationin subsection (1) or any of paragraphs (a) to (c) of the definitionsmall business corporationin subsection 248(1), as the case may be — of any of those corporations that are
(A)the proceeds, the right to receive the proceeds or attributable to the proceeds, of the life insurance policy of which the particular corporation was a beneficiary, and
(B)used, directly or indirectly, within the 24-month period beginning at the time of the death of the insured or, where written application therefor is made by the particular corporation within that period, within such longer period as the Minister considers reasonable in the circumstances, to redeem, acquire or cancel the subject shares owned by the insured immediately before the death of the insured,
not in excess of the fair market value of the assets immediately after the death of the insured, shall, until the later of
(C)the redemption, acquisition or cancellation, and
(D)the day that is 60 days after the payment of the proceeds under the policy,
be deemed not to exceed the cash surrender value (within the meaning assigned by subsection 148(9)) of the policy immediately before the death of the insured; and
(b)the fair market value of an asset of a particular corporation that is a share of the capital stock or indebtedness of another corporation with which the particular corporation is connected shall be deemed to be nil and, for the purpose of this paragraph, a particular corporation is connected with another corporation only where
(i)the particular corporation is connected (within the meaning assigned by paragraph (d) of the definitionqualified small business corporation sharein subsection 110.6(1)) with the other corporation, and
(ii)the other corporation is not connected (within the meaning of subsection 186(4) as determined without reference to subsection 186(2) and on the assumption that the other corporation is a payer corporation within the meaning of subsection 186(4)) with the particular corporation,
except that this paragraph applies only in determining whether a share of the capital stock of another corporation with which the particular corporation is connected is a qualified small business corporation share or a share of the capital stock of a family farm or fishing corporation and in determining whether the other corporation is a small business corporation.
Marginal note:Personal trust
(16)For the purposes of the definitionqualified small business corporation sharein subsection 110.6(1) and of paragraph 110.6(14)(c), a personal trust shall be deemed to include a trust described in subsection 7(2).
Marginal note:Order of deduction
(17)For the purpose of clause 110.6(2)(a)(iii)(A), amounts deducted under this section in computing an individual’s taxable income for a taxation year that ended before 1990 shall be deemed to have first been deducted in respect of amounts that were included in computing the individual’s income under this Part for the year because of subparagraph 14(1)(a)(v) before being deducted in respect of any other amounts that were included in computing the individual’s income under this Part for the year.
(18)[Repealed, 1995, c. 3, s. 32]
Marginal note:Election for property owned on February 22, 1994
(19)Subject to subsection 110.6(20), where an individual (other than a trust) or a personal trust (each of which is referred to in this subsection and subsections 110.6(20) to 110.6(29) as the “elector”), elects in prescribed form to have the provisions of this subsection apply in respect of
(a)a capital property (other than an interest in a trust referred to in any of paragraphs (f) to (j) of the definitionflow-through entityin subsection 39.1(1)) owned at the end of February 22, 1994 by the elector, the property shall be deemed, except for the purposes of sections 7 and 35 and subparagraph 110(1)(d.1)(ii),
(i)to have been disposed of by the elector at that time for proceeds of disposition equal to the greater of
(A)the amount determined by the formula
A - B
where
(B)the adjusted cost base to the elector of the property immediately before the disposition, and
(ii)to have been reacquired by the elector immediately after that time at a cost equal to
(A)where the property is an interest in or a share of the capital stock of a flow-through entity (within the meaning assigned by subsection 39.1(1)) of the elector, the cost to the elector of the property immediately before the disposition referred to in subparagraph 110.6(19)(a)(i),
(B)where an amount would, if the disposition referred to in subparagraph 110.6(19)(a)(i) were a disposition for the purpose of section 7 or 35, be included under that section as a result of the disposition in computing the income of the elector, the lesser of
(I)the elector’s proceeds of disposition of the property determined under subparagraph 110.6(19)(a)(i), and
(II)the amount determined by the formula
A - B
where
(C)in any other case, the lesser of
(I)the designated amount, and
(II)the amount, if any, by which the fair market value of the property at that time exceeds the amount determined by the formula
A - 1.1B
where
(b)a business carried on by the elector (otherwise than as a member of a partnership) on February 22, 1994,
(i)the amount that would be determined under subparagraph 14(1)(a)(v) at the end of that day in respect of the elector if
(A)all the eligible capital property owned at that time by the elector in respect of the business were disposed of by the elector immediately before that time for proceeds of disposition equal to the amount designated in the election in respect of the business, and
(B)the fiscal period of the business ended at that time
shall be deemed to be a taxable capital gain of the elector for the taxation year in which the fiscal period of the business that includes that time ends from the disposition of a particular property and, for the purposes of this section, the particular property shall be deemed to have been disposed of by the elector at that time, and
(ii)for the purpose of paragraph 14(3)(b), the amount of the taxable capital gain determined under subparagraph 110.6(19)(b)(i) shall be deemed to have been claimed, by a person who does not deal at arm’s length with each person or partnership that does not deal at arm’s length with the elector, as a deduction under this section in respect of a disposition at that time of the eligible capital property; and
(c)an interest owned at the end of February 22, 1994 by the elector in a trust referred to in any of paragraphs (f) to (j) of the definitionflow-through entityin subsection 39.1(1), the elector shall be deemed to have a capital gain for the year from the disposition on February 22, 1994 of property equal to the lesser of
(i)the total of amounts designated in elections made under this subsection by the elector in respect of interests in the trust, and
(ii)4/3 of the amount that would, if all of the trust’s capital properties were disposed of at the end of February 22, 1994 for proceeds of disposition equal to their fair market value at that time and that portion of the trust’s capital gains and capital losses or its net taxable capital gains, as the case may be, arising from the dispositions as can reasonably be considered to represent the elector’s share thereof were allocated to or designated in respect of the elector, be the increase in the annual gains limit of the elector for the 1994 taxation year as a result of the dispositions.
Marginal note:Application of subsection (19)
(20)Subsection 110.6(19) applies to a property or to a business, as the case may be, of an elector only if
(a)where the elector is an individual (other than a trust),
(i)its application to all of the properties in respect of which elections were made under that subsection by the elector or a spouse or common-law partner of the elector and to all the businesses in respect of which elections were made under that subsection by the elector
(A)would result in an increase in the amount deductible under subsection 110.6(3) in computing the taxable income of the elector or a spouse or common-law partner of the elector, and
(B)in respect of each of the 1994 and 1995 taxation years,
(I)where no part of the taxable capital gain resulting from an election by the elector is included in computing the income of a spouse of the elector, would not result in the amount determined under paragraph 110.6(3)(a) for the year in respect of the elector being exceeded by the lesser of the amounts determined under paragraphs 110.6(3)(b) and 110.6(3)(c) for the year in respect of the elector, and
(II)where no part of the taxable capital gain resulting from an election by the elector is included in computing the income of the elector, would not result in the amount determined under paragraph 110.6(3)(a) for the year in respect of a spouse or common-law partner of the elector being exceeded by the lesser of the amounts determined under paragraphs 110.6(3)(b) and 110.6(3)(c) for the year in respect of the spouse or common-law partner,
(ii)the amount designated in the election in respect of the property exceeds 11/10 of its fair market value at the end of February 22, 1994, or
(iii)the amount designated in the election in respect of the business is $1.00 or exceeds 11/10 of the fair market value at the end of February 22, 1994 of all the eligible capital property owned at that time by the elector in respect of the business; and
(b)where the elector is a personal trust, its application to all of the properties in respect of which an election was made under that subsection by the elector would result in
(i)an increase in the amount deemed by subsection 104(21.2) to be a taxable capital gain of an individual (other than a trust) who was a beneficiary under the trust at the end of February 22, 1994 and resident in Canada at any time in the individual’s taxation year in which the trust’s taxation year that includes that day ends, or
(ii)where subsection 110.6(12) applies to the trust for the trust’s taxation year that includes that day, an increase in the amount deductible under that subsection in computing the trust’s taxable income for that year.
Marginal note:Effect of election on non-qualifying real property
(21)Where an elector is deemed by subsection 110.6(19) to have disposed of a non-qualifying real property,
(a)in computing the elector’s taxable capital gain from the disposition, there shall be deducted the amount determined by the formula
0.75(A - B)
where
(b)in determining at any time after the disposition the capital cost to the elector of the property where it is a depreciable property and the adjusted cost base to the elector of the property in any other case (other than where the property was at the end of February 22, 1994 an interest in or a share of the capital stock of a flow-through entity within the meaning assigned by subsection 39.1(1)), there shall be deducted 4/3 of the amount determined under paragraph 110.6(21)(a) in respect of the property.
Marginal note:Adjusted cost base
(22)Where an elector is deemed by paragraph 110.6(19)(a) to have reacquired a property, there shall be deducted in computing the adjusted cost base to the elector of the property at any time after the reacquisition the amount, if any, by which
(a)the amount determined by the formula
A - 1.1B
where
exceeds
(b)where the property is an interest in or a share of the capital stock of a flow-through entity (within the meaning assigned by subsection 39.1(1)), 4/3 of the axable capital gain that would have resulted from the election if the amount designated in the election were equal to the fair market value of the property at the end of February 22, 1994 and, in any other case, the fair market value of the property at the end of February 22, 1994.
Marginal note:Disposition of partnership interest
(23)Where an elector is deemed by subsection 110.6(19) to have disposed of an interest in a partnership, in computing the adjusted cost base to the elector of the interest immediately before the disposition
(a)there shall be added the amount determined by the formula
(A - B) × C/D + E
where
(b)there shall be deducted the amount that would be determined under paragraph 110.6(23)(a) if the formula in that paragraph were read as
“(B - A) × C/D - E”
Marginal note:Time for election
(24)An election made under subsection 110.6(19) shall be filed with the Minister
(a)where the elector is an individual (other than a trust),
(i)if the election is in respect of a business of the elector, on or before the individual’s filing-due date for the taxation year in which the fiscal period of the business that includes February 22, 1994 ends, and
(ii)in any other case, on or before the individual’s balance-due day for the 1994 taxation year; and
(b)where the elector is a personal trust, on or before March 31 of the calendar year following the calendar year in which the taxation year of the trust that includes February 22, 1994 ends.
Marginal note:Revocation of election
(25)Subject to subsection 110.6(28), an elector may revoke an election made under subsection 110.6(19) by filing a written notice of the revocation with the Minister before 1998.
Marginal note:Late election
(26)Where an election made under subsection 110.6(19) is filed with the Minister after the day (referred to in this subsection and subsections 110.6(27) and 110.6(29) as the “election filing date”) on or before which the election is required by subsection 110.6(24) to have been filed and on or before the day that is 2 years after the election filing date, the election shall be deemed for the purposes of this section (other than subsection 110.6(29)) to have been filed on the election filing date if an estimate of the penalty in respect of the election is paid by the elector when the election is filed with the Minister.
Marginal note:Amended election
(27)Subject to subsection 110.6(28), an election under subsection 110.6(19) in respect of a property or a business is deemed to be amended and the election, as amended, is deemed for the purpose of this section (other than subsection 110.6(29)) to have been filed on the election filing date if
(a)an amended election in prescribed form in respect of the property or the business is filed with the Minister before 1998; and
(b)an estimate of the penalty, if any, in respect of the amended election is paid by the elector when the amended election is filed with the Minister.
Marginal note:Election that cannot be revoked or amended
(28)An election under subsection 110.6(19) cannot be revoked or amended where the amount designated in the election exceeds 11/10 of
(a)if the election is in respect of a property other than an interest in a partnership, the fair market value of the property at the end of February 22, 1994;
(b)if the election is in respect of an interest in a partnership, the greater of $1 and the fair market value of the property at the end of February 22, 1994; and
(c)if the election is in respect of a business, the greater of $1 and the fair market value at the end of February 22, 1994 of all the eligible capital property owned at that time by the elector in respect of the business.
Marginal note:Amount of penalty
(29)The penalty in respect of an election to which subsection 110.6(26) or 110.6(27) applies is the amount determined by the formula
(A × B)/300
where
Marginal note:Unpaid balance of penalty
(30)The Minister shall, with all due dispatch, examine each election to which subsection 110.6(26) or 110.6(27) applies, assess the penalty payable and send a notice of assessment to the elector who made the election, and the elector shall pay forthwith to the Receiver General the amount, if any, by which the penalty so assessed exceeds the total of all amounts previously paid on account of that penalty.
Marginal note:Reserve limit
(31)If an amount is included in an individual’s income for a particular taxation year because of subparagraph 40(1)(a)(ii) in respect of a disposition of property in a preceding taxation year that, at the time of the disposition, is qualified farm or fishing property, a qualified small business corporation share, qualified farm property or qualified fishing property, the total of all amounts deductible by the individual for the particular year under this section is reduced by the amount, if any, determined by the formula
A – B
where
(32)[Repealed, 2013, c. 40, s. 46]
Marginal note:Residing in prescribed zone
110.7(1)Where, throughout a period (in this section referred to as the “qualifying period”) of not less than 6 consecutive months beginning or ending in a taxation year, a taxpayer who is an individual has resided in one or more particular areas each of which is a prescribed northern zone or prescribed intermediate zone for the year and files for the year a claim in prescribed form, there may be deducted in computing the taxpayer’s taxable income for the year
(a)the total of all amounts each of which is the amount, in respect of a particular period during the taxation year, determined by the formula
A × B
where
(b)the lesser of
(i)20% of the taxpayer’s income for the year, and
(ii)the total of all amounts each of which is the product obtained by multiplying the specified percentage for a particular area for the year in which the taxpayer so resided by the total of
(A)$11.00 multiplied by the number of days in the year included in the qualifying period in which the taxpayer resided in the particular area, and
(B)$11.00 multiplied by the number of days in the year included in that portion of the qualifying period throughout which the taxpayer maintained and resided in a self-contained domestic establishment in the particular area (except any day included in computing a deduction claimed under this paragraph by another person who resided on that day in the establishment).
Marginal note:Specified percentage
(2)For the purpose of subsection 110.7(1), the specified percentage for a particular area for a taxation year is
(a)where the area is a prescribed northern zone for the year, 100%; and
(b)where the area is a prescribed intermediate zone for the year, 50%.
Marginal note:Restriction
(3)The total of all amounts determined under paragraph (1)(a) for all taxpayers in a taxation year in respect of an individual shall not be in respect of more than two trips made by the individual that begin in the year (other than trips to obtain medical services that are not available in the locality in which the taxpayer resided).
Marginal note:Additional restrictions
(3.1)For the purpose of paragraph (1)(a), an amount may only be included in the amount determined for B for a particular area for a taxation year if
(a)the amount is not otherwise deducted in computing the income for any taxation year of any individual (except by an employer under section 9 if it is included in an employee’s income);
(b)the amount is not included in determining an amount deducted under subsection 118.2(1) for any taxation year;
(c)the amount is in respect of trips made by the taxpayer or an eligible family member of the taxpayer that begin during the part of the year in which the taxpayer resided in the particular area; and
(d)neither the taxpayer nor an eligible family member of the taxpayer is at any time entitled to a reimbursement or any form of assistance (other than a reimbursement or assistance included in computing the income of the taxpayer or the eligible family member) in respect of trips to which paragraph (c) applies.
Marginal note:Additional restriction
(3.2)If all amounts determined under paragraph 7304(2)(a) of theIncome Tax Regulationsare nil in respect of trips (beginning in the taxation year) made by an individual, the total of all amounts determined for B in paragraph (1)(a) in the taxation year for all taxpayers in respect of the individual must not exceed the standard amount for the individual for the taxation year.
Marginal note:Deemed standard amount
(3.3)If an employer-provided travel benefit was claimed by a taxpayer in respect of an individual in respect of the taxation year, the standard amount for the individual is deemed to be nil for the taxation year.
Marginal note:Board and lodging allowances, etc.
(4)The amount determined under subparagraph (1)(b)(ii) for a particular area for a taxpayer for a taxation year shall not exceed the amount by which the amount otherwise determined under that subparagraph for the particular area for the year exceeds the value of, or an allowance in respect of expenses incurred by the taxpayer for, the taxpayer’s board and lodging in the particular area (other than at a work site described in paragraph 67.1(2)(e)) that
(a)would, but for subparagraph 6(6)(a)(i), be included in computing the taxpayer’s income for the year; and
(b)can reasonably be considered to be attributable to that portion of the qualifying period that is in the year and during which the taxpayer maintained a self-contained domestic establishment as the taxpayer’s principal place of residence in an area other than a prescribed northern zone or a prescribed intermediate zone for the year.
Marginal note:Idem
(5)Where on any day an individual resides in more than one particular area referred to in subsection 110.7(1), for the purpose of that subsection, the individual shall be deemed to reside in only one such area on that day.
Marginal note:Definitions
(6)The following definitions apply in this section.
eligible family memberof a taxpayer, at any time, means a member of the taxpayer’s household who is at that time
(a)the taxpayer’s spouse or common-law partner;
(b)a child of the taxpayer (including a child of the taxpayer’s spouse or common-law partner) under the age of 18; or
(c)another individual who is
(i)related to the taxpayer,
(ii)wholly dependent for support on the taxpayer, the taxpayer’s spouse or common-law partner, or both of them, and
(iii)except in the case of a parent or grandparent of the taxpayer, so dependent by reason of mental or physical infirmity. (membre de la famille admissible)
employer-provided travel benefits, to a taxpayer in respect of a trip made by the taxpayer or their eligible family member, means the total amount of
(a)the value of travel assistance, if any, provided to the taxpayer in respect of the taxpayer’s employment in respect of travel expenses for the trip; and
(b)the amount, if any, received by the taxpayer in respect of the taxpayer’s employment in respect of travel expenses for the trip. (avantages relatifs aux voyages tirés de l’emploi)
standard amount, for an individual for a taxation year and subject to subsection (3.3), means $1,200. (montant forfaitaire)
trip costhas the meaning prescribed by regulation. (frais de voyage)
Marginal note:Losses deductible
111(1)For the purpose of computing the taxable income of a taxpayer for a taxation year, there may be deducted such portion as the taxpayer may claim of the taxpayer’s
Marginal note:Non-capital losses
(a)non-capital losses for the 20 taxation years immediately preceding and the 3 taxation years immediately following the year;
Marginal note:Net capital losses
(b)net capital losses for taxation years preceding and the three taxation years immediately following the year;
Marginal note:Restricted farm losses
(c)restricted farm losses for the 20 taxation years immediately preceding and the 3 taxation years immediately following the year, but no amount is deductible for the year in respect of restricted farm losses except to the extent of the taxpayer’s incomes for the year from all farming businesses carried on by the taxpayer;
Marginal note:Farm losses
(d)farm losses for the 20 taxation years immediately preceding and the 3 taxation years immediately following the year; and
Marginal note:Limited partnership losses
(e)limited partnership losses in respect of a partnership for taxation years preceding the year, but no amount is deductible for the year in respect of a limited partnership loss except to the extent of the amount by which
(i)the taxpayer’s at-risk amount in respect of the partnership (within the meaning assigned by subsection 96(2.2)) at the end of the last fiscal period of the partnership ending in the taxation year
exceeds
(ii)the total of all amounts each of which is
(A)the amount required by subsection 127(8) in respect of the partnership to be added in computing the investment tax credit of the taxpayer for the taxation year,
(B)the taxpayer’s share of any losses of the partnership for that fiscal period from a business or property, or
(C)the taxpayer’s share of
(I)the foreign resource pool expenses, if any, incurred by the partnership in that fiscal period,
(II)the Canadian exploration expense, if any, incurred by the partnership in that fiscal period,
(III)the Canadian development expense, if any, incurred by the partnership in that fiscal period, and
(IV)the Canadian oil and gas property expense, if any, incurred by the partnership in that fiscal period.
Marginal note:Net capital losses
(1.1)Notwithstanding paragraph 111(1)(b), the amount that may be deducted under that paragraph in computing a taxpayer’s taxable income for a particular taxation year is the total of
(a)the lesser of
(i)the amount, if any, determined under paragraph 3(b) in respect of the taxpayer for the particular year, and
(ii)the total of all amounts each of which is an amount determined by the formula
A × B/C
where
(b)where the taxpayer is an individual, the least of
(i)$2,000,
(ii)the taxpayer’s pre-1986 capital loss balance for the particular year, and
(iii)the amount, if any, by which
(A)the amount claimed under paragraph 111(1)(b) in respect of the taxpayer’s net capital losses for the particular year
exceeds
(B)the total of the amounts in respect of the taxpayer’s net capital losses that, using the formula in subparagraph 111(1.1)(a)(ii), would be required to be claimed under paragraph 111(1)(b) for the particular year to produce the amount determined under paragraph 111(1.1)(a) for the particular year; and
(c)the amount, if any, that the Minister determines to be reasonable in the circumstances for the particular year and after considering the application to the taxpayer of subsections 104(21.6), 130.1(4), 131(1) and 138.1(3.2) as they read in their application to the taxpayer’s last taxation year that began before November 2011.
Marginal note:Year of death
(2)Where a taxpayer dies in a taxation year, for the purpose of computing the taxpayer’s taxable income for that year and the immediately preceding taxation year, the following rules apply:
(a)paragraph 111(1)(b) shall be read as follows:
“111(1)(b)the taxpayer’s net capital losses for all taxation years not claimed for the purpose of computing the taxpayer’s taxable income for any other taxation year;”; and
(b)paragraph 111(1.1)(b) shall be read as follows:
“111(1.1)(b)the amount, if any, by which
(i)the amount claimed under paragraph 111(1)(b) in respect of the taxpayer’s net capital losses for the particular year
exceeds the total of
(ii)all amounts in respect of the taxpayer’s net capital losses that, using the formula in subparagraph 111(2)(a)(ii), would be required to be claimed under paragraph 111(1)(b) for the particular year to produce the amount determined under paragraph 111(2)(a) for the particular year, and
(iii)all amounts each of which is an amount deducted under section 110.6 in computing the taxpayer’s taxable income for a taxation year, except to the extent that, where the particular year is the year in which the taxpayer died, the amount, if any, by which the amount determined under subparagraph 111(2)(b)(i) in respect of the taxpayer for the immediately preceding taxation year exceeds the amount so determined under subparagraph 111(2)(b)(ii).”
Marginal note:Limitation on deductibility
(3)For the purposes of subsection 111(1),
(a)an amount in respect of a non-capital loss, restricted farm loss, farm loss or limited partnership loss, as the case may be, for a taxation year is deductible, and an amount in respect of a net capital loss for a taxation year may be claimed, in computing the taxable income of a taxpayer for a particular taxation year only to the extent that it exceeds the total of
(i)amounts deducted under this section in respect of that non-capital loss, restricted farm loss, farm loss or limited partnership loss in computing taxable income for taxation years preceding the particular taxation year,
(i.1)the amount that was claimed under paragraph 111(1)(b) in respect of that net capital loss for taxation years preceding the particular taxation year, and
(ii)amounts claimed in respect of that loss under paragraph 186(1)(c) for the year in which the loss was incurred or under paragraph 186(1)(d) for the particular taxation year and taxation years preceding the particular taxation year, and
(b)no amount is deductible in respect of a non-capital loss, net capital loss, restricted farm loss, farm loss or limited partnership loss, as the case may be, for a taxation year until
(i)in the case of a non-capital loss, the deductible non-capital losses,
(ii)in the case of a net capital loss, the deductible net capital losses,
(iii)in the case of a restricted farm loss, the deductible restricted farm losses,
(iv)in the case of a farm loss, the deductible farm losses, and
(v)in the case of a limited partnership loss, the deductible limited partnership losses,
for preceding taxation years have been deducted.
Marginal note:Loss restriction event — capital losses
(4)Notwithstanding subsection (1), and subject to subsection (5.5), if at any time (in this subsection referred to as “that time”) a taxpayer is subject to a loss restriction event,
(a)no amount in respect of a net capital loss for a taxation year that ended before that time is deductible in computing the taxpayer’s taxable income for a taxation year that ends after that time;
(b)no amount in respect of a net capital loss for a taxation year that ends after that time is deductible in computing the taxpayer’s taxable income for a taxation year that ends before that time;
(c)in computing the adjusted cost base to the taxpayer at and after that time of each capital property, other than a depreciable property, of the taxpayer immediately before that time, there is to be deducted the amount, if any, by which the adjusted cost base to the taxpayer of the property immediately before that time exceeds its fair market value immediately before that time;
(d)each amount required by paragraph (c) to be deducted in computing the adjusted cost base to the taxpayer of a property is deemed to be a capital loss of the taxpayer for the taxation year that ended immediately before that time from the disposition of the property;
(e)if the taxpayer designates — in its return of income under this Part for the taxation year that ended immediately before that time or in a prescribed form filed with the Minister on or before the day that is 90 days after the day on which a notice of assessment of tax payable for the year or notification that no tax is payable for the year is sent to the taxpayer — a property that was a capital property of the taxpayer immediately before that time (other than a property in respect of which an amount would, but for this paragraph, be required by paragraph (c) to be deducted in computing its adjusted cost base to the taxpayer or a depreciable property of a prescribed class to which, but for this paragraph, subsection (5.1) would apply),
(i)the taxpayer is deemed to have disposed of the property at the time that is immediately before the time that is immediately before that time for proceeds of disposition equal to the lesser of
(A)the fair market value of the property immediately before that time, and
(B)the greater of the adjusted cost base to the taxpayer of the property immediately before the disposition and such amount as is designated by the taxpayer in respect of the property,
(ii)subject to subparagraph (iii), the taxpayer is deemed to have reacquired the property at that time at a cost equal to those proceeds of disposition, and
(iii)if the property is depreciable property of the taxpayer the capital cost of which to the taxpayer immediately before the disposition exceeds those proceeds of disposition, for the purposes of sections 13 and 20 and any regulations made for the purposes of paragraph 20(1)(a),
(A)the capital cost of the property to the taxpayer at that time is deemed to be the amount that was its capital cost immediately before the disposition, and
(B)the excess is deemed to have been allowed to the taxpayer in respect of the property under regulations made for the purposes of paragraph 20(1)(a) in computing the taxpayer’s income for taxation years that ended before that time; and
(f)for the purposes of the definitioncapital dividend accountin subsection 89(1), each amount that because of paragraph (d) or (e) is a capital loss or gain of the taxpayer from a disposition of a property for the taxation year that ended immediately before that time is deemed to be a capital loss or gain, as the case may be, of the taxpayer from the disposition of the property immediately before the time that a capital property of the taxpayer in respect of which paragraph (e) would be applicable would be deemed by that paragraph to have been disposed of by the taxpayer.
Marginal note:Loss restriction event — non-capital losses and farm losses
(5)If at any time a taxpayer is subject to a loss restriction event,
(a)no amount in respect of the taxpayer’s non-capital loss or farm loss for a taxation year that ended before that time is deductible by the taxpayer for a taxation year that ends after that time, except that the portion of the taxpayer’s non-capital loss or farm loss, as the case may be, for a taxation year that ended before that time as may reasonably be regarded as the taxpayer’s loss from carrying on a business and, if a business was carried on by the taxpayer in that year, the portion of the non-capital loss as may reasonably be regarded as being in respect of an amount deductible under paragraph 110(1)(k) in computing the taxpayer’s taxable income for that year is deductible by the taxpayer for a particular taxation year that ends after that time
(i)only if that business was carried on by the taxpayer for profit or with a reasonable expectation of profit throughout the particular year, and
(ii)only to the extent of the total of the taxpayer’s income for the particular year from
(A)that business, and
(B)if properties were sold, leased, rented or developed or services rendered in the course of carrying on that business before that time, any other business substantially all the income of which was derived from the sale, leasing, rental or development, as the case may be, of similar properties or the rendering of similar services; and
(b)no amount in respect of the taxpayer’s non-capital loss or farm loss for a taxation year that ends after that time is deductible by the taxpayer for a taxation year that ended before that time, except that the portion of the taxpayer’s non-capital loss or farm loss, as the case may be, for a taxation year that ended after that time as may reasonably be regarded as the taxpayer’s loss from carrying on a business and, if a business was carried on by the taxpayer in that year, the portion of the non-capital loss as may reasonably be regarded as being in respect of an amount deductible under paragraph 110(1)(k) in computing the taxpayer’s taxable income for that year is deductible by the taxpayer for a particular taxation year that ends before that time
(i)only if throughout the taxation year and in the particular year that business was carried on by the taxpayer for profit or with a reasonable expectation of profit, and
(ii)only to the extent of the taxpayer’s income for the particular year from
(A)that business, and
(B)if properties were sold, leased, rented or developed or services rendered in the course of carrying on that business before that time, any other business substantially all the income of which was derived from the sale, leasing, rental or development, as the case may be, of similar properties or the rendering of similar services.
Marginal note:Loss restriction event — UCC computation
(5.1)Subject to subsection (5.5), if at any time a taxpayer is subject to a loss restriction event and, if this Act were read without reference to subsection 13(24), the undepreciated capital cost to the taxpayer of depreciable property of a prescribed class immediately before that time would have exceeded the total of
(a)the fair market value of all the property of that class immediately before that time, and
(b)the amount in respect of property of that class otherwise allowed under regulations made under paragraph 20(1)(a) or deductible under subsection 20(16) in computing the taxpayer’s income for the taxation year that ended immediately before that time,
the excess is to be deducted in computing the taxpayer’s income for the taxation year that ended immediately before that time and is deemed to have been allowed in respect of property of that class under regulations made under paragraph 20(1)(a).
(5.2)[Repealed, 2016, c. 12, s. 40]
Marginal note:Loss restriction event — doubtful debts and bad debts
(5.3)Subject to subsection (5.5), if at any time a taxpayer is subject to a loss restriction event,
(a)no amount may be deducted under paragraph 20(1)(l) in computing the taxpayer’s income for the taxation year that ended immediately before that time; and
(b)in respect of each debt owing to the taxpayer immediately before that time
(i)the amount that is the greatest amount that would, but for this subsection and subsection 26(2) of this Act and subsection 33(1) of theIncome Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, have been deductible under paragraph 20(1)(l)
(A)is deemed to be a separate debt, and
(B)notwithstanding any other provision of this Act, is to be deducted as a bad debt under paragraph 20(1)(p) in computing the taxpayer’s income for its taxation year that ended immediately before that time, and
(ii)the amount by which the debt exceeds that separate debt is deemed to be a separate debt incurred at the same time and under the same circumstances as the debt was incurred.
Marginal note:Non-capital loss
(5.4)Where, at any time, control of a corporation has been acquired by a person or persons, such portion of the corporation’s non-capital loss for a taxation year ending before that time as
111(5.4)(a)was not deductible in computing the corporation’s income for a taxation year ending before that time, and
(b)can reasonably be considered to be a non-capital loss of a subsidiary corporation (in this subsection referred to as the “former subsidiary corporation”) from carrying on a particular business (in this subsection referred to as the “former subsidiary corporation’s loss business”) that was deemed by subsection 88(1.1) of theIncome Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, as it read on November 12, 1981 to be the non-capital loss of the corporation for the taxation year of the corporation in which the former subsidiary corporation’s loss year ended
shall be deemed to be a non-capital loss of the corporation from carrying on the former subsidiary corporation’s loss business.
Marginal note:Loss restriction event — special rules
(5.5)If at any time a taxpayer is subject to a loss restriction event,
(a)paragraphs (4)(c) to (f) and subsections (5.1) to (5.3) do not apply to the taxpayer in respect of the loss restriction event if at that time the taxpayer becomes or ceases to be exempt from tax under this Part on its taxable income; and
(b)if it can reasonably be considered that the main reason that the taxpayer is subject to the loss restriction event is to cause paragraph (4)(d) or any of subsections (5.1) to (5.3) to apply with respect to the loss restriction event, the following do not apply with respect to the loss restriction event:
(i)that provision and paragraph (4)(e), and
(ii)if that provision is paragraph (4)(d), paragraph (4)(c).
Marginal note:Limitation
(6)For the purposes of this section and paragraph 53(1)(i), any loss of a taxpayer for a taxation year from a farming business shall, after the taxpayer disposes of the land used in that farming business and to the extent that the amount of the loss is required by paragraph 53(1)(i) to be added in computing the adjusted cost base to the taxpayer of the land immediately before the disposition, be deemed not to be a loss.
Marginal note:Idem
(7)For the purposes of this section, any loss of a taxpayer for a taxation year from a farming business shall, to the extent that the loss is included in the amount of any deduction permitted by section 101 in computing the taxpayer’s income for any subsequent taxation year, be deemed not to be a loss of the taxpayer for the purpose of computing the taxpayer’s taxable income for that subsequent year or any taxation year subsequent thereto.
(7.1) to (7.2)[Repealed, 2013, c. 34, s. 241]
Marginal note:Non-capital losses of employee life and health trusts
(7.3)Paragraph (1)(a) does not apply in computing the taxable income of a trust for a taxation year if the trust is, in the year, an employee life and health trust.
Marginal note:Non-capital losses of employee life and health trusts
(7.4)For the purposes of computing the taxable income of an employee life and health trust for a taxation year, there may be deducted such portion as the trust may claim of the trust’s non-capital losses for the seven taxation years immediately preceding and the three taxation years immediately following the year.
Marginal note:Non-capital losses of employee life and health trusts
(7.5)Notwithstanding paragraph (1)(a) and subsection (7.4), no amount in respect of the trust’s non-capital losses for a taxation year in which the trust was an employee life and health trust may be deducted in computing the trust’s taxable income for another taxation year (referred to in this subsection as the “specified year”) if
(a)the trust was not an employee life and health trust for the specified year; or
(b)the trust is an employee life and health trust that, because of the application of subsection 144.1(3), is not permitted to deduct any amount under subsection 104(6) for the specified year.
Marginal note:Definitions
(8)In this section,
exchange rate, at any time in respect of a currency of a country other than Canada, means the rate of exchange between that currency and Canadian currency quoted by the Bank of Canada on the day that includes that time or, if that day is not a business day, on the day that immediately precedes that day, or a rate of exchange acceptable to the Minister; (taux de change)
farm lossof a taxpayer for a taxation year means the amount determined by the formula
A - C
where
(a)the amount, if any, by which
(i)the total of all amounts each of which is the taxpayer’s loss for the year from a farming or fishing business
exceeds
(ii)the total of all amounts each of which is the taxpayer’s income for the year from a farming or fishing business, and
(b)the amount that would be the taxpayer’s non-capital loss for the year if the amount determined for D in the definitionnon-capital lossin this subsection were nil, and
foreign currency debtmeans a debt obligation denominated in a currency of a country other than Canada; (dette en monnaie étrangère)
net capital lossof a taxpayer for a taxation year means the amount determined by the formula
A - B + C - D
where
(a)the amount of the allowable business investment losses of the taxpayer for the taxpayer’s tenth preceding taxation year,
(b)the amount, if any, by which the amount of the non-capital loss of the taxpayer for the taxpayer’s tenth preceding taxation year exceeds the total of all amounts in respect of that non-capital loss deducted in computing the taxpayer’s taxable income or claimed by the taxpayer under paragraph 186(1)(c) or (d) for the year or for any preceding taxation year, and
(c)if the taxpayer was subject to a loss restriction event before the end of the year and after the end of the taxpayer’s tenth preceding taxation year, nil, and
non-capital lossof a taxpayer for a taxation year means, at any time, the amount determined by the formula
(A + B) - (D + D.1 + D.2)
where
E - F
where
(a)the taxpayer’s loss for the year from an office, employment, business or property,
(a.1)an amount deductible under paragraph 104(6)(a.4) in computing the taxpayer’s income for the year,
(b)an amount deducted under paragraph (1)(b) or section 110.6, or deductible under any of paragraphs 110(1)(d) to (g) and (k), section 112 and subsections 113(1) and 138(6), in computing the taxpayer’s taxable income for the year, or
(c)if that time is before the taxpayer’s eleventh following taxation year, the taxpayer’s allowable business investment loss for the year, and
pre-1986 capital loss balanceof an individual for a particular taxation year means the amount determined by the formula
(A + B) - (C + D + E + E.1)
where
F - G
where
H - I
where
(a)the amount of the individual’s net capital loss for the 1985 taxation year, and
(b)the amount, if any, by which the amount determined under subparagraph 3(e)(ii) of theIncome Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, in respect of the individual for the 1985 taxation year exceeds the amount deductible by reason of paragraph 3(e) of that Act in computing the individual’s taxable income for the 1985 taxation year, andI is the total of all amounts claimed under this section by the individual in respect of the individual’s net capital loss for the 1985 taxation year in computing the individual’s taxable income for taxation years preceding the particular taxation year, and
(a)ended after 1987 and before 1990, or
(b)began after February 27, 2000 and ended before October 18, 2000,
J × (0.5/K)
where
Marginal note:Exception
(9)In this section, a taxpayer’s non-capital loss, net capital loss, restricted farm loss, farm loss and limited partnership loss for a taxation year during which the taxpayer was not resident in Canada shall be determined as if
(a)in the part of the year throughout which the taxpayer was non-resident, if section 114 applies to the taxpayer in respect of the year, and
(b)throughout the year, in any other case,
the taxpayer had no income other than income described in any of subparagraphs 115(1)(a)(i) to (vi), the taxpayer’s only taxable capital gains, allowable capital losses and allowable business investment losses were from dispositions of taxable Canadian property (other than treaty-protected property) and the taxpayer’s only other losses were losses from the duties of an office or employment performed by the taxpayer in Canada and businesses (other than treaty-protected businesses) carried on by the taxpayer in Canada.
Marginal note:Fuel tax rebate loss abatement
(10)Where in a particular taxation year a taxpayer received an amount (in this subsection referred to as a “rebate”) as a fuel tax rebate under subsection 68.4(2) or (3.1) of theExcise Tax Act, in computing the taxpayer’s non-capital loss for a taxation year (in this subsection referred to as the “loss year”) that is one of the 7 taxation years preceding the particular year, there shall be deducted the lesser of
(a)the amount determined by the formula
10(A - B) - C
where
(b)such amount as the taxpayer claims, not exceeding the portion of the taxpayer’s non-capital loss for the loss year (determined without reference to this subsection) that would be deductible in computing the taxpayer’s taxable income for the particular year if the taxpayer had sufficient income for the particular year from businesses carried on by the taxpayer in the particular year.
Marginal note:Fuel tax rebate — partnerships
(11)Where a taxpayer was a member of a partnership at any time in a fiscal period of the partnership during which it received a fuel tax rebate under subsection 68.4(2), (3) or (3.1) of theExcise Tax Act, the taxpayer is deemed
(a)to have received at that time as a rebate under subsection 68.4(2), 68.4(3) or 68.4(3.1), as the case may be, of that Act an amount equal to that proportion of the amount of the rebate received by the partnership that the member’s share of the partnership’s income or loss for that fiscal period is of the whole of that income or loss, determined without reference to any rebate under section 68.4 of that Act; and
(b)to have paid as a repayment under subsection 68.4(7) of that Act an amount equal to that proportion of all amounts repaid under subsection 68.4(7) of that Act in respect of the rebate that the member’s share of the partnership’s income or loss for that fiscal period is of the whole of that income or loss, determined without reference to any rebate under section 68.4 of that Act.
Marginal note:Foreign currency debt on loss restriction event
(12)For the purposes of subsection (4), if at any time a taxpayer owes a foreign currency debt in respect of which the taxpayer would have had, if the foreign currency debt had been repaid at that time, a capital loss or gain, the taxpayer is deemed to own at the time (in this subsection referred to as the “measurement time”) that is immediately before that time a property
(a)the adjusted cost base of which at the measurement time is the amount determined by the formula
A + B – C
where
(b)the fair market value of which is the amount that would be the amount of the principal owed by the taxpayer under the foreign currency debt at the measurement time if that amount were calculated using the exchange rate applicable at the time of the original borrowing.
Marginal note:Order of applying provisions
111.1In computing an individual’s taxable income for a taxation year, the provisions of this Division shall be applied in the following order: sections 110, 110.2, 111, 110.6 and 110.7.
Marginal note:Deduction of taxable dividends received by corporation resident in Canada
112(1)Where a corporation in a taxation year has received a taxable dividend from
(a)a taxable Canadian corporation, or
(b)a corporation resident in Canada (other than a non-resident-owned investment corporation or a corporation exempt from tax under this Part) and controlled by it,
an amount equal to the dividend may be deducted from the income of the receiving corporation for the year for the purpose of computing its taxable income.
Marginal note:Dividends received from non-resident corporation
(2)Where a taxpayer that is a corporation has, in a taxation year, received a dividend from a corporation (other than a foreign affiliate of the taxpayer) that was taxable under subsection 2(3) for the year and that has, throughout the period from June 18, 1971 to the time when the dividend was received, carried on a business in Canada through a permanent establishment as defined by regulation, an amount equal to that proportion of the dividend that the paying corporation’s taxable income earned in Canada for the immediately preceding year is of the whole of the amount that its taxable income for that year would have been if it had been resident in Canada throughout that year, may be deducted from the income of the receiving corporation for the taxation year for the purpose of computing its taxable income.
Marginal note:No deduction permitted
(2.1)No deduction may be made under subsection (1) or (2) in computing the taxable income of a specified financial institution in respect of a dividend received by it on a share that was, at the time the dividend was received, a term preferred share, other than a dividend on a share of the capital stock of a corporation that was not acquired in the ordinary course of the business carried on by the institution, and for the purposes of this subsection, if a restricted financial institution received the dividend on a share of the capital stock of a mutual fund corporation or an investment corporation at any time after the mutual fund or investment corporation has elected under subsection 131(10) not to be a restricted financial institution, the share is deemed to be a term preferred share acquired in the ordinary course of business.
Marginal note:Guaranteed shares
(2.2)No deduction may be made under subsection (1), (2) or 138(6) in computing the taxable income of a particular corporation in respect of a dividend received on a share of the capital stock of a corporation that was issued after 8:00 p.m