A-29.011 in respect of salary, wages or other remuneration, including gratuities, paid to an individual employed by the taxpayer as an assistant or substitute to perform the duties of the taxpayer’s office or employment if an amount is deductible by the taxpayer for the year under subparagraph (i)(ii) in respect of that individual;
Marginal note:Employee’s registered pension plan contributions
(m)the amount in respect of contributions to registered pension plans that, by reason of subsection 147.2(4), is deductible in computing the taxpayer’s income for the year;
Marginal note:Employee RCA contributions
(m.2)an amount contributed by the taxpayer in the year to a pension plan in respect of services rendered by the taxpayer where the plan is a prescribed plan established by an enactment of Canada or a province or where
(i)the plan is a retirement compensation arrangement,
(ii)the amount was paid to a custodian (within the meaning assigned by the definitionretirement compensation arrangementin subsection 248(1)) of the arrangement who is resident in Canada, and
(iii)either
(A)the taxpayer was required, by the terms of the taxpayer’s office or employment, to contribute the amount, and the total of the amounts contributed to the plan in the year by the taxpayer does not exceed the total of the amount contributed to the plan in the year by any other person in respect of the taxpayer, or
(B)the plan is a pension plan the registration of which under this Act was revoked (other than a plan the registration of which was revoked as of the effective date of its registration) and the amount was contributed in accordance with the terms of the plan as last registered;
(C)[Repealed, 1994, c. 21, s. 4(2)]
Marginal note:Salary reimbursement
(n)an amount paid by or on behalf of the taxpayer in the year pursuant to an arrangement (other than an arrangement described in subparagraph (b)(ii) of the definitiontop-up disability paymentin subsection 6(17)) under which the taxpayer is required to reimburse any amount paid to the taxpayer for a period throughout which the taxpayer did not perform the duties of the office or employment, to the extent that
(i)the amount so paid to the taxpayer for the period was included in computing the taxpayer’s income from an office or employment, and
(ii)the total of amounts so reimbursed does not exceed the total of amounts received by the taxpayer for the period throughout which the taxpayer did not perform the duties of the office or employment;
Marginal note:Reimbursement of disability payments
(n.1)where,
(i)as a consequence of the receipt of a payment (in this paragraph referred to as the “deferred payment”) from an insurer, a payment (in this paragraph referred to as the “reimbursement payment”) is made by or on behalf of an individual to an employer or former employer of the individual pursuant to an arrangement described in subparagraph (b)(ii) of the definitiontop-up disability paymentin subsection 6(17), and
(ii)the reimbursement payment is made
(A)in the year, other than within the first 60 days of the year if the deferred payment was received in the immediately preceding taxation year, or
(B)within 60 days after the end of the year, if the deferred payment was received in the year,
an amount equal to the lesser of
(iii)the amount included under paragraph 6(1)(f) in respect of the deferred payment in computing the individual’s income for any taxation year, and
(iv)the amount of the reimbursement payment;
Marginal note:Forfeited amounts
(o)where at the end of the year the rights of any person to receive benefits under a salary deferral arrangement in respect of the taxpayer have been extinguished or no person has any further right to receive any amount under the arrangement, the amount, if any, by which the total of all deferred amounts under the arrangement included in computing the taxpayer’s income for the year and preceding taxation years as benefits under paragraph 6(1)(a) exceeds the total of
(i)all such deferred amounts received by any person in that year or preceding taxation years out of or under the arrangement,
(ii)all such deferred amounts receivable by any person in subsequent taxation years out of or under the arrangement, and
(iii)all amounts deducted under this paragraph in computing the taxpayer’s income for preceding taxation years in respect of deferred amounts under the arrangement;
Marginal note:Idem
(o.1)an amount that is deductible in computing the taxpayer’s income for the year because of subsection 144(9);
Marginal note:Excess EPSP amounts
(o.2)an amount that is an excess EPSP amount (as defined in subsection 207.8(1)) of the taxpayer for the year, other than any portion of the excess EPSP amount for which the taxpayer’s tax for the year under subsection 207.8(2) is waived or cancelled;
Marginal note:Musical instrument costs
(p)where the taxpayer was employed in the year as a musician and as a term of the employment was required to provide a musical instrument for a period in the year, an amount (not exceeding the taxpayer’s income for the year from the employment, computed without reference to this paragraph) equal to the total of
(i)amounts expended by the taxpayer before the end of the year for the maintenance, rental or insurance of the instrument for that period, except to the extent that the amounts are otherwise deducted in computing the taxpayer’s income for any taxation year, and
(ii)such part, if any, of the capital cost to the taxpayer of the instrument as is allowed by regulation;
Marginal note:Artists’ employment expenses
(q)where the taxpayer’s income for the year from the office or employment includes income from an artistic activity
(i)that was the creation by the taxpayer of, but did not include the reproduction of, paintings, prints, etchings, drawings, sculptures or similar works of art,
(ii)that was the composition by the taxpayer of a dramatic, musical or literary work,
(iii)that was the performance by the taxpayer of a dramatic or musical work as an actor, dancer, singer or musician, or
(iv)in respect of which the taxpayer was a member of a professional artists’ association that is certified by the Minister of Communications,
amounts paid by the taxpayer before the end of the year in respect of expenses incurred for the purpose of earning the income from those activities to the extent that they were not deductible in computing the taxpayer’s income for a preceding taxation year, but not exceeding a single amount in respect of all such offices and employments of the taxpayer equal to the amount, if any, by which
(v)the lesser of $1,000 and 20% of the total of all amounts each of which is the taxpayer’s income from an office or employment for the year, before deducting any amount under this section, that was income from an artistic activity described in any of subparagraphs 8(1)(q)(i) to 8(1)(q)(iv),
exceeds
(vi)the total of all amounts deducted by the taxpayer for the year under paragraph 8(1)(j) or 8(1)(p) in respect of costs or expenses incurred for the purpose of earning the income from such an activity for the year;
Marginal note:Apprentice mechanics’ tool costs
(r)if the taxpayer was an eligible apprentice mechanic at any time after 2001 and before the end of the taxation year, the amount claimed by the taxpayer for the taxation year under this paragraph not exceeding the lesser of
(i)the taxpayer’s income for the taxation year computed without reference to this paragraph, and
(ii)the amount determined by the formula
(A - B) + C
where
(A)the value of A for the taxation year in respect of the taxpayer, and
(B)the greater of
(I)the amount that is the total of $500 and the amount determined for the taxation year for B in subsection 118(10), and
(II)5% of the total of
1.the total of all amounts each of which is the taxpayer’s income from employment for the taxation year as an eligible apprentice mechanic, computed without reference to this paragraph, and
2.the amount, if any, by which the amount required by paragraph 56(1)(n.1) to be included in computing the taxpayer’s income for the taxation year exceeds the amount required by paragraph 60(p) to be deducted in computing that income, and
Marginal note:Deduction — tradesperson’s tools
(s)if the taxpayer is employed as a trades­person at any time in the taxation year, the lesser of $500 and the amount determined by the formula
A - $1,000
where
(i)the total of all amounts each of which is the cost of an eligible tool acquired by the taxpayer in the year, and
(ii)the total of
(A)the amount that would, if this subsection were read without reference to this paragraph, be the taxpayer’s income for the taxation year from employment as a trades­person in the taxation year, and
(B)the amount, if any, by which the amount required by paragraph 56(1)(n.1) to be included in computing the taxpayer’s income for the taxation year exceeds the amount required by paragraph 60(p) to be deducted in computing that income; and
Marginal note:Labour mobility deduction
(t)if the taxpayer is an eligible tradesperson for the year, an amount equal to the lesser of
(i)$4,000, and
(ii)the total of all amounts each of which is a temporary relocation deduction of the taxpayer for the year in respect of an eligible temporary relocation of the taxpayer.
Marginal note:General limitation
(2)Except as permitted by this section, no deductions shall be made in computing a taxpayer’s income for a taxation year from an office or employment.
Marginal note:Meals
(4)An amount expended in respect of a meal consumed by a taxpayer who is an officer or employee shall not be included in computing the amount of a deduction under paragraph 8(1)(f) or 8(1)(h) unless the meal was consumed during a period while the taxpayer was required by the taxpayer’s duties to be away, for a period of not less than twelve hours, from the municipality where the employer’s establishment to which the taxpayer ordinarily reported for work was located and away from the metropolitan area, if there is one, where it was located.
Marginal note:Dues not deductible
(5)Notwithstanding subparagraphs 8(1)(i)(i), 8(1)(i)(iv), 8(1)(i)(vi) and 8(1)(i)(vii), dues are not deductible under those subparagraphs in computing a taxpayer’s income from an office or employment to the extent that they are, in effect, levied
(a)for or under a superannuation fund or plan;
(b)for or under a fund or plan for annuities, insurance (other than professional or malpractice liability insurance that is necessary to maintain a professional status recognized by statute) or similar benefits; or
(c)for any other purpose not directly related to the ordinary operating expenses of the committee or similar body, association, board or trade union, as the case may be.
Marginal note:Apprentice mechanics
(6)For the purpose of paragraph (1)(r),
(a)a taxpayer is an eligible apprentice mechanic in a taxation year if, at any time in the taxation year, the taxpayer
(i)is registered in a program established in accordance with the laws of Canada or of a province that leads to designation under those laws as a mechanic licensed to repair self-propelled motorized vehicles, and
(ii)is employed as an apprentice mechanic;
(b)an eligible tool is a tool (including ancillary equipment) that
(i)is acquired by a taxpayer for use in connection with the taxpayer’s employment as an eligible apprentice mechanic,
(ii)has not been used for any purpose before it is acquired by the taxpayer,
(iii)is certified in prescribed form by the taxpayer’s employer to be required to be provided by the taxpayer as a condition of, and for use in, the taxpayer’s employment as an eligible apprentice mechanic, and
(iv)is, unless the device or equipment can be used only for the purpose of measuring, locating or calculating, not an electronic communication device or electronic data processing equipment; and
(c)a taxpayer who, for a taxation year, is not an eligible apprentice mechanic and has an excess amount determined under the description of C in subparagraph (1)(r)(ii) is, for the taxation year, entitled to claim a deduction under that paragraph as if that excess amount were wholly applicable to an employment of the taxpayer.
Marginal note:Eligible tool of tradesperson
(6.1)For the purposes of paragraph (1)(s), an eligible tool of a taxpayer is a tool (including ancillary equipment) that
(a)is acquired by the taxpayer on or after May 2, 2006 for use in connection with the taxpayer’s employment as a tradesperson;
(b)has not been used for any purpose before it is acquired by the taxpayer;
(c)is certified in prescribed form by the taxpayer’s employer to be required to be provided by the taxpayer as a condition of, and for use in, the taxpayer’s employment as a tradesperson; and
(d)is, unless the device or equipment can be used only for the purpose of measuring, locating or calculating, not an electronic communication device or electronic data processing equipment.
Marginal note:Cost of tool
(7)Except for the purposes of the description of A in subparagraph (1)(r)(ii) and the description of A in paragraph (1)(s), the cost to a taxpayer of an eligible tool the cost of which was included in determining the value of one or both of those descriptions in respect of the taxpayer for a taxation year is the amount determined by the formula
K - (K × L/M)
where
(a)if the tool is a tool to which only paragraph (1)(r) applies in the taxation year, the amount that would be determined under subparagraph (1)(r)(ii) in respect of the taxpayer for the taxation year if the value of C in that subparagraph were nil,
(b)if the tool is a tool to which only paragraph (1)(s) applies in the taxation year, the amount determined under that paragraph to be deductible by the taxpayer in the taxation year, or
(c)if the tool is a tool to which both paragraphs (1)(r) and (s) apply in the taxation year, the amount that is the total of
(i)the amount that would be determined under subparagraph (1)(r)(ii) in respect of the taxpayer for the taxation year if the value of C in that subparagraph were nil, and
(ii)the amount determined under paragraph (1)(s) to be deductible by the taxpayer in the taxation year; and
(a)if the tool is a tool to which only paragraph (1)(r) applies in the taxation year, the value of A determined under subparagraph (1)(r)(ii) in respect of the taxpayer for the taxation year,
(b)if the tool is a tool to which only paragraph (1)(s) applies in the taxation year, the amount determined under subparagraph (i) of the description of A in paragraph (1)(s) in respect of the taxpayer for the taxation year, and
(c)if the tool is a tool to which both paragraphs (1)(r) and (s) apply in the taxation year, the amount that is the greater of the value of A determined under subparagraph (1)(r)(ii) in respect of the taxpayer for the taxation year and the amount determined under subparagraph (i) of the description of A in paragraph (1)(s) in respect of the taxpayer for the taxation year.
Marginal note:Presumption
(9)Notwithstanding any other provision of this Act, the total of all amounts that would otherwise be deductible by a taxpayer pursuant to paragraph 8(1)(f), 8(1)(h) or 8(1)(j) for travelling in the course of the taxpayer’s employment in an aircraft that is owned or rented by the taxpayer, may not exceed an amount that is reasonable in the circumstances having regard to the relative cost and availability of other modes of transportation.
Marginal note:Certificate of employer
(10)An amount otherwise deductible for a taxation year under paragraph (1)(c), (f), (h) or (h.1) or subparagraph (1)(i)(ii) or (iii) by a taxpayer shall not be deducted unless a prescribed form, signed by the taxpayer’s employer certifying that the conditions set out in the applicable provision were met in the year in respect of the taxpayer, is filed with the taxpayer’s return of income for the year.
Marginal note:Goods and services tax
(11)For the purposes of this section and section 6, the amount of any rebate paid or payable to a taxpayer under theExcise Tax Actin respect of the goods and services tax shall be deemed not to be an amount that is reimbursed to the taxpayer or to which the taxpayer is entitled.
Marginal note:Forfeiture of securities by employee
(12)If, in a taxation year,
(a)an employee is deemed by subsection 7(2) to have disposed of a security (as defined in subsection 7(7)) held by a trust,
(b)the trust disposed of the security to the person that issued the security,
(c)the disposition occurred as a result of the employee not meeting the conditions necessary for title to the security to vest in the employee, and
(d)the amount paid by the person to acquire the security from the trust or to redeem or cancel the security did not exceed the amount paid to the person for the security,
the following rules apply:
(e)there may be deducted in computing the employee’s income for the year from employment the amount, if any, by which
(i)the amount of the benefit deemed by subsection 7(1) to have been received by the employee in the year or a preceding taxation year in respect of the security
exceeds
(ii)any amount deducted under paragraph 110(1)(d) or (d.1) in computing the employee’s taxable income for the year or a preceding taxation year in respect of that benefit, and
(f)notwithstanding any other provision of this Act, the employee’s gain or loss from the disposition of the security is deemed to be nil and section 84 does not apply to deem a dividend to have been received in respect of the disposition.
Marginal note:Work space in home
(13)Notwithstanding paragraphs 8(1)(f) and 8(1)(i),
(a)no amount is deductible in computing an individual’s income for a taxation year from an office or employment in respect of any part (in this subsection referred to as the “work space”) of a self-contained domestic establishment in which the individual resides, except to the extent that the work space is either
(i)the place where the individual principally performs the duties of the office or employment, or
(ii)used exclusively during the period in respect of which the amount relates for the purpose of earning income from the office or employment and used on a regular and continuous basis for meeting customers or other persons in the ordinary course of performing the duties of the office or employment;
(b)where the conditions set out in subparagraph 8(13)(a)(i) or 8(13)(a)(ii) are met, the amount in respect of the work space that is deductible in computing the individual’s income for the year from the office or employment shall not exceed the individual’s income for the year from the office or employment, computed without reference to any deduction in respect of the work space; and
(c)any amount in respect of a work space that was, solely because of paragraph 8(13)(b), not deductible in computing the individual’s income for the immediately preceding taxation year from the office or employment shall be deemed to be an amount in respect of a work space that is otherwise deductible in computing the individual’s income for the year from that office or employment and that, subject to paragraph 8(13)(b), may be deducted in computing the individual’s income for the year from the office or employment.
Marginal note:Labour mobility deduction — interpretation
(14)For the purposes of this subsection and paragraph (1)(t),
(a)a taxpayer is an eligible tradesperson for a taxation year if, in the taxation year, the taxpayer has income from employment as a tradesperson or apprentice and performs their duties of employment in construction activities described in subsection 238(1) of theIncome Tax Regulations;
(b)a temporary work location of a taxpayer is a location in Canada
(i)at which the taxpayer performs their duties of employment under a temporary employment contract, and
(ii)that is not situated in the locality where the taxpayer is ordinarily employed or carrying on business;
(c)an eligible temporary relocation of a taxpayer is a temporary relocation that meets the following conditions:
(i)the relocation is undertaken by the taxpayer to enable the taxpayer to perform their duties of employment as an eligible tradesperson at one or more temporary work locations of the taxpayer within the same locality,
(ii)prior to the relocation, the taxpayer ordinarily resided at a residence in Canada (in this subsection referred to as the “ordinary residence”),
(iii)the taxpayer was required by their duties of employment referred to in subparagraph (i) to be away from the ordinary residence for a period of not less than 36 hours,
(iv)during the temporary relocation, the taxpayer temporarily resided at one or more lodgings in Canada (in this subsection referred to as the “temporary lodging”), and
(v)the distance between the ordinary residence and each temporary work location of the taxpayer referred to in subparagraph (i) is not less than 150 kilometres greater than the distance between each temporary lodging referred in subparagraph (iv) and each temporary work location of the taxpayer referred to in subparagraph (i);
(d)subject to paragraph (e), an eligible temporary relocation expense of a taxpayer for a taxation year is a reasonable expense incurred by the taxpayer during the taxation year, the previous taxation year or prior to February 1 of the following taxation year, in respect of
(i)transportation for one round trip per eligible temporary relocation by the taxpayer between the ordinary residence and the temporary lodging,
(ii)meals consumed by the taxpayer during the round trip described in subparagraph (i), and
(iii)the taxpayer’s temporary lodging if, throughout the period of the taxpayer’s temporary relocation,
(A)the taxpayer maintains their ordinary residence as their principal place of residence, and
(B)the ordinary residence remains available for the taxpayer’s occupancy and is not rented to any other person;
(e)an eligible temporary relocation expense described in paragraph (d) does not include an expense incurred by the taxpayer to the extent that
(i)the expense is deducted (other than under paragraph (1)(t)) in computing the taxpayer’s income for any taxation year,
(ii)the expense was deductible under paragraph (1)(t) by the taxpayer for the immediately preceding taxation year, or
(iii)the taxpayer is entitled to receive a reimbursement, allowance or any other form of assistance (other than an amount that is included in computing the income for any taxation year of the taxpayer and that is not deductible in computing the income of the taxpayer) in respect of the expense; and
(f)a taxpayer’s temporary relocation deduction for a taxation year in respect of an eligible temporary relocation of the taxpayer is the lesser of
(i)the total eligible temporary relocation expenses of the taxpayer for the taxation year incurred in respect of the eligible temporary relocation, and
(ii)half of the taxpayer’s total income for the taxation year from employment as an eligible tradesperson at all temporary work locations referred to in subparagraph (c)(i) in respect of the eligible temporary relocation (computed without reference to this section).
Marginal note:Income
9(1)Subject to this Part, a taxpayer’s income for a taxation year from a business or property is the taxpayer’s profit from that business or property for the year.
Marginal note:Loss
(2)Subject to section 31, a taxpayer’s loss for a taxation year from a business or property is the amount of the taxpayer’s loss, if any, for the taxation year from that source computed by applying the provisions of this Act respecting computation of income from that source with such modifications as the circumstances require.
Marginal note:Gains and losses not included
(3)In this Act, “income from a property” does not include any capital gain from the disposition of that property and “loss from a property” does not include any capital loss from the disposition of that property.
Marginal note:Valuation of inventory
10(1)For the purpose of computing a taxpayer’s income for a taxation year from a business that is not an adventure or concern in the nature of trade, property described in an inventory shall be valued at the end of the year at the cost at which the taxpayer acquired the property or its fair market value at the end of the year, whichever is lower, or in a prescribed manner.
Marginal note:Adventures in the nature of trade
(1.01)For the purpose of computing a taxpayer’s income from a business that is an adventure or concern in the nature of trade, property described in an inventory shall be valued at the cost at which the taxpayer acquired the property.
Marginal note:Certain expenses included in cost
(1.1)For the purposes of subsections 10(1), 10(1.01) and 10(10), where land is described in an inventory of a business of a taxpayer, the cost at which the taxpayer acquired the land shall include each amount that is
(a)described in paragraph 18(2)(a) or (b) in respect of the land and for which no deduction is permitted to the taxpayer, or to another person or partnership that is
(i)a person or partnership with whom the taxpayer does not deal at arm’s length,
(ii)if the taxpayer is a corporation, a person or partnership that is a specified shareholder of the taxpayer, or
(iii)if the taxpayer is a partnership, a person or partnership whose share of any income or loss of the taxpayer is 10% or more; and
(b)not included in or added to the cost to that other person or partnership of any property otherwise than because of paragraph 53(1)(d.3) or subparagraph 53(1)(e)(xi).
Marginal note:Continuation of valuation
(2)Notwithstanding subsection 10(1), for the purpose of computing income for a taxation year from a business, the inventory at the commencement of the year shall be valued at the same amount as the amount at which it was valued at the end of the preceding taxation year for the purpose of computing income for that preceding year.
Marginal note:Methods of valuation to be the same
(2.1)Where property described in an inventory of a taxpayer’s business that is not an adventure or concern in the nature of trade is valued at the end of a taxation year in accordance with a method permitted under this section, that method shall, subject to subsection 10(6), be used in the valuation of property described in the inventory at the end of the following taxation year for the purpose of computing the taxpayer’s income from the business unless the taxpayer, with the concurrence of the Minister and on any terms and conditions that are specified by the Minister, adopts another method permitted under this section.
Marginal note:Incorrect valuation
(3)Where the inventory of a business at the commencement of a taxation year has, according to the method adopted by the taxpayer for computing income from the business for that year, not been valued as required by subsection 10(1), the inventory at the commencement of that year shall, if the Minister so directs, be deemed to have been valued as required by that subsection.
Marginal note:Fair market value
(4)For the purpose of subsection 10(1), the fair market value of property (other than property that is obsolete, damaged or defective or that is held for sale or lease or for the purpose of being processed, fabricated, manufactured, incorporated into, attached to, or otherwise converted into property for sale or lease) that is
(a)work in progress at the end of a taxation year of a business that is a profession means the amount that can reasonably be expected to become receivable in respect thereof after the end of the year; and
(b)advertising or packaging material, parts, supplies or other property (other than work in progress of a business that is a profession) that is included in inventory means the replacement cost of the property.
Marginal note:Inventory
(5)Without restricting the generality of this section,
(a)property (other than capital property) of a taxpayer that is advertising or packaging material, parts or supplies or work in progress of a business that is a profession is, for greater certainty, inventory of the taxpayer;
(b)anything used primarily for the purpose of advertising or packaging property that is included in the inventory of a taxpayer shall be deemed not to be property held for sale or lease or for any of the purposes referred to in subsection 10(4); and
(c)property of a taxpayer, the cost of which to the taxpayer was deductible by virtue of paragraph 20(1)(mm), is, for greater certainty, inventory of the taxpayer having a cost to the taxpayer, except for the purposes of that paragraph, of nil.
Marginal note:Artistic endeavour
(6)Notwithstanding subsection 10(1), for the purpose of computing the income of an individual other than a trust for a taxation year from a business that is the individual’s artistic endeavour, the value of the inventory of the business for that year shall, if the individual so elects in the individual’s return of income under this Part for the year, be deemed to be nil.
Marginal note:Value in later years
(7)Where an individual has made an election pursuant to subsection 10(6) for a taxation year, the value of the inventory of a business that is the individual’s artistic endeavour shall, for each subsequent taxation year, be deemed to be nil unless the individual, with the concurrence of the Minister and on such terms and conditions as are specified by the Minister, revokes the election.
Definition ofbusiness that is an individual’s artistic endeavour
(8)For the purpose of this section,business that is an individual’s artistic endeavourmeans the business of creating paintings, prints, etchings, drawings, sculptures or similar works of art, where such works of art are created by the individual, but does not include a business of reproducing works of art.
Marginal note:Transition
(9)Where, at the end of a taxpayer’s last taxation year at the end of which property described in an inventory of a business that is an adventure or concern in the nature of trade was valued under subsection 10(1), the property was valued at an amount that is less than the cost at which the taxpayer acquired the property, after that time the cost to the taxpayer at which the property was acquired is, subject to subsection 10(10), deemed to be that amount.
Marginal note:Loss restriction event
(10)Notwithstanding subsection (1.01), property described in an inventory of a taxpayer’s business that is an adventure or concern in the nature of trade at the end of the taxpayer’s taxation year that ends immediately before the time at which the taxpayer is subject to a loss restriction event is to be valued at the cost at which the taxpayer acquired the property, or its fair market value at the end of the year, whichever is lower, and after that time the cost at which the taxpayer acquired the property is, subject to a subsequent application of this subsection, deemed to be that lower amount.
Marginal note:Loss restriction event
(11)For the purposes of subsections 88(1.1) and 111(5), a taxpayer’s business that is at any time an adventure or concern in the nature of trade is deemed to be a business carried on at that time by the taxpayer.
Marginal note:Removing property from inventory
(12)If at any time a non-resident taxpayer ceases to use, in connection with a business or part of a business carried on by the taxpayer in Canada immediately before that time, a property that was immediately before that time described in the inventory of the business or the part of the business, as the case may be, (other than a property that was disposed of by the taxpayer at that time), the taxpayer is deemed
(a)to have disposed of the property immediately before that time for proceeds of disposition equal to its fair market value at that time; and
(b)to have received those proceeds immediately before that time in the course of carrying on the business or the part of the business, as the case may be.
Marginal note:Adding property to inventory
(13)If at any time a property becomes included in the inventory of a business or part of a business that a non-resident taxpayer carries on in Canada after that time (other than a property that was, otherwise than because of this subsection, acquired by the taxpayer at that time), the taxpayer is deemed to have acquired the property at that time at a cost equal to its fair market value at that time.
Marginal note:Work in progress
(14)For the purposes of subsections (12) and (13), property that is included in the inventory of a business includes property that would be so included if paragraph 34(a) did not apply.
Marginal note:Work in progress — transitional
(14.1)If paragraph 34(a) applies in computing a taxpayer’s income from a business for the last taxation year of the taxpayer that begins before March 22, 2017, then
(a)for the purpose of computing the income of the taxpayer from the business, at the end of the first taxation year that begins after March 21, 2017,
(i)the amount of the cost of the taxpayer’s work in progress is deemed to be one-fifth of the amount of its cost determined without reference to this paragraph, and
(ii)the amount of the fair market value of the taxpayer’s work in progress is deemed to be one-fifth of the amount of its fair market value determined without reference to this paragraph;
(b)for the purpose of computing the income of the taxpayer from the business, at the end of the second taxation year that begins after March 21, 2017,
(i)the amount of the cost of the taxpayer’s work in progress is deemed to be two-fifths of the amount of its cost determined without reference to this paragraph, and
(ii)the amount of the fair market value of the taxpayer’s work in progress is deemed to be two-fifths of the amount of its fair market value determined without reference to this paragraph;
(c)for the purpose of computing the income of the taxpayer from the business, at the end of the third taxation year that begins after March 21, 2017,
(i)the amount of the cost of the taxpayer’s work in progress is deemed to be three-fifths of the amount of its cost determined without reference to this paragraph, and
(ii)the amount of the fair market value of the taxpayer’s work in progress is deemed to be three-fifths of the amount of its fair market value determined without reference to this paragraph; and
(d)for the purpose of computing the income of the taxpayer from the business, at the end of the fourth taxation year that begins after March 21, 2017,
(i)the amount of the cost of the taxpayer’s work in progress is deemed to be four-fifths of the amount of its cost determined without reference to this paragraph, and
(ii)the amount of the fair market value of the taxpayer’s work in progress is deemed to be four-fifths of the amount of its fair market value determined without reference to this paragraph.
Marginal note:Derivatives
(15)For the purposes of this section, property of a taxpayer that is a swap agreement, a forward purchase or sale agreement, a forward rate agreement, a futures agreement, an option agreement, or any similar agreement is deemed not to be inventory of the taxpayer.
Marginal note:Mark-to-market election
10.1(1)Subsection (4) applies to a taxpayer in respect of a taxation year and subsequent taxation years if the taxpayer elects to have subsection (4) apply to the taxpayer and has filed that election in prescribed form on or before its filing-due date for the taxation year.
Marginal note:Revocation
(2)The Minister may, on application by the taxpayer in prescribed form, grant permission to the taxpayer to revoke its election under subsection (1)