Eastern Standard Time, November 27, 1986 the terms or conditions of a share of the capital stock of a corporation have been changed or any agreement in respect of the share has been changed or entered into by the corporation, the share shall be deemed to have been issued at that time.Marginal note:Loss sustained by investor(2.8)For the purposes of paragraph 112(2.4)(a), any loss that an investor may sustain by virtue of the ownership, holding or disposition of the subject share referred to in that paragraph shall be deemed to include any loss with respect to an obligation or share that was issued or acquired as part of a transaction or event or a series of transactions or events that included the issuance or acquisition of the subject share, or a share for which the subject share was substituted.Marginal note:Related corporations(2.9)For the purposes of subparagraph 112(2.4)(b)(i), where it may reasonably be considered having regard to all the circumstances that a corporation has become related to any other corporation for the purpose of avoiding any limitation on the deduction of a dividend under subsection 112(1), 112(2) or 138(6), the corporation shall be deemed not to be related to the other corporation.Marginal note:Loss on share that is capital property(3)Subject to subsections 112(5.5) and 112(5.6), the amount of any loss of a taxpayer (other than a trust) from the disposition of a share that is capital property of the taxpayer (other than a share that is property of a partnership) is deemed to be the amount of the loss determined without reference to this subsection minus,(a)where the taxpayer is an individual, the lesser of(i)the total of all amounts each of which is a dividend received by the taxpayer on the share in respect of which an election was made under subsection 83(2) where subsection 83(2.1) does not deem the dividend to be a taxable dividend, and(ii)the loss determined without reference to this subsection minus all taxable dividends received by the taxpayer on the share; and(b)where the taxpayer is a corporation, the total of all amounts received by the taxpayer on the share each of which is(i)a taxable dividend, to the extent of the amount of the dividend that was deductible under this section or subsection 115(1) or 138(6) in computing the taxpayer’s taxable income or taxable income earned in Canada for any taxation year,(ii)a dividend in respect of which an election was made under subsection 83(2) where subsection 83(2.1) does not deem the dividend to be a taxable dividend, or(iii)a life insurance capital dividend.Marginal note:Loss on share that is capital property — excluded dividends(3.01)A qualified dividend shall not be included in the total determined under subparagraph (3)(a)(i) or paragraph (3)(b) if the taxpayer establishes that(a)it was received when the taxpayer and persons with whom the taxpayer was not dealing at arm’s length did not own in total more than 5% of the issued shares of any class of the capital stock of the corporation from which the dividend was received; and(b)it was received on a share that the taxpayer owned throughout the 365-day period that ended immediately before the disposition.Marginal note:Loss on share held by partnership(3.1)Subject to subsections 112(5.5) and 112(5.6), where a taxpayer (other than a partnership or a mutual fund trust) is a member of a partnership, the taxpayer’s share of any loss of the partnership from the disposition of a share that is held by a particular partnership as capital property is deemed to be that share of the loss determined without reference to this subsection minus,(a)where the taxpayer is an individual, the lesser of(i)the total of all amounts each of which is a dividend received by the taxpayer on the share in respect of which an election was made under subsection 83(2) where subsection 83(2.1) does not deem the dividend to be a taxable dividend, and(ii)that share of the loss determined without reference to this subsection minus all taxable dividends received by the taxpayer on the share;(b)where the taxpayer is a corporation, the total of all amounts received by the taxpayer on the share each of which is(i)a taxable dividend, to the extent of the amount of the dividend that was deductible under this section or subsection 115(1) or 138(6) in computing the taxpayer’s taxable income or taxable income earned in Canada for any taxation year,(ii)a dividend in respect of which an election was made under subsection 83(2) where subsection 83(2.1) does not deem the dividend to be a taxable dividend, or(iii)a life insurance capital dividend; and(c)where the taxpayer is a trust, the total of all amounts each of which is(i)a taxable dividend, or(ii)a life insurance capital dividendreceived on the share and designated under subsection 104(19) or 104(20) by the trust in respect of a beneficiary that was a corporation, partnership or trust.Marginal note:Loss on share held by partnership — excluded dividends(3.11)A qualified dividend shall not be included in the total determined under subparagraph (3.1)(a)(i) or paragraph (3.1)(b) or (c) if the taxpayer establishes that(a)it was received when the particular partnership, the taxpayer and persons with whom the taxpayer was not dealing at arm’s length did not hold in total more than 5% of the issued shares of any class of the capital stock of the corporation from which the dividend was received; and(b)it was received on a share that the particular partnership held throughout the 365-day period that ended immediately before the disposition.Marginal note:Loss on share held by partnership — excluded dividends(3.12)A taxable dividend received on a share and designated under subsection 104(19) by a particular trust in respect of a beneficiary that was a partnership or trust shall not be included in the total determined under paragraph 112(3.1)(c) where the particular trust establishes that the dividend was received by an individual (other than a trust).Marginal note:Loss on share held by trust(3.2)Subject to subsections 112(5.5) and 112(5.6), the amount of any loss of a trust (other than a mutual fund trust) from the disposition of a share of the capital stock of a corporation that is capital property of the trust is deemed to be the amount of the loss determined without reference to this subsection minus the total of(a)the amount, if any, by which the lesser of(i)the total of all amounts each of which is a dividend received by the trust on the share in respect of which an election was made under subsection 83(2) where subsection 83(2.1) does not deem the dividend to be a taxable dividend, and(ii)the loss determined without reference to this subsection minus the total of all amounts each of which is the amount of a taxable dividend(A)received by the trust on the share,(B)received on the share and designated under subsection 104(19) by the trust in respect of a beneficiary who is an individual (other than a trust), or(C)that is a qualified dividend received on the share and designated under subsection 104(19) by the trust in respect of a beneficiary that was a corporation, partnership or another trust where the trust establishes that(I)it owned the share throughout the 365-day period that ended immediately before the disposition, and(II)the dividend was received while the trust, the beneficiary and persons not dealing at arm’s length with the beneficiary owned in total less than 5% of the issued shares of any class of the capital stock of the corporation from which the dividend was receivedexceeds(iii)if the trust is an individual’s graduated rate estate, the share was acquired as a consequence of the individual’s death and the disposition occurs during the trust’s first taxation year, 1/2 of the lesser of(A)the loss determined without reference to this subsection, and(B)the individual’s capital gain from the disposition of the share immediately before the individual’s death, and(b)the total of all amounts each of which is(i)a taxable dividend, or(ii)a life insurance capital dividendreceived on the share and designated under subsection 104(19) or 104(20) by the trust in respect of a beneficiary that was a corporation, partnership or trust.Marginal note:Loss on share held by trust — special cases(3.3)Notwithstanding subsection 112(3.2), where a trust has at any time acquired a share of the capital stock of a corporation because of subsection 104(4), the amount of any loss of the trust from a disposition after that time is deemed to be the amount of the loss determined without reference to subsection 112(3.2) and this subsection minus the total of(a)the amount, if any, by which the lesser of(i)the total of all amounts each of which is a dividend received after that time by the trust on the share in respect of which an election was made under subsection 83(2) where subsection 83(2.1) does not deem the dividend to be a taxable dividend, and(ii)the loss determined without reference to subsection 112(3.2) and this subsection minus the total of all amounts each of which is the amount of a taxable dividend(A)received by the trust on the share after that time,(B)received on the share after that time and designated under subsection 104(19) by the trust in respect of a beneficiary who is an individual (other than a trust), or(C)that is a qualified dividend received on the share after that time and designated under subsection 104(19) by the trust in respect of a beneficiary that was a corporation, partnership or another trust where the trust establishes that(I)it owned the share throughout the 365-day period that ended immediately before the disposition, and(II)the dividend was received when the trust, the beneficiary and persons not dealing at arm’s length with the beneficiary owned in total less than 5% of the issued shares of any class of the capital stock of the corporation from which the dividend was receivedexceeds(iii)1/2 of the lesser of(A)the loss from the disposition, determined without reference to subsection 112(3.2) and this subsection, and(B)the trust’s capital gain from the disposition immediately before that time of the share because of subsection 104(4), and(b)the total of all amounts each of which is a taxable dividend received on the share after that time and designated under subsection 104(19) by the trust in respect of a beneficiary that was a corporation, partnership or trust.Marginal note:Loss on share held by trust — excluded dividends(3.31)A qualified dividend received by a trust shall not be included under subparagraph (3.2)(a)(i) or (b)(ii) or (3.3)(a)(i) if the trust establishes that the dividend(a)was received,(i)in any case where the dividend was designated under subsection 104(19) or 104(20) by the trust, when the trust, the beneficiary and persons with whom the beneficiary was not dealing at arm’s length did not own in total more than 5% of the issued shares of any class of the capital stock of the corporation from which the dividend was received, or(ii)in any other case, when the trust and persons with whom the trust was not dealing at arm’s length did not own in total more than 5% of the issued shares of any class of the capital stock of the corporation from which the dividend was received, and(b)was received on a share that the trust owned throughout the 365-day period that ended immediately before the disposition.Marginal note:Loss on share held by trust — excluded dividends(3.32)A qualified dividend that is a taxable dividend received on the share and that is designated under subsection 104(19) by the trust in respect of a beneficiary that was a corporation, partnership or trust, shall not be included under paragraph (3.2)(b) or (3.3)(b) if the trust establishes that the dividend was received by an individual (other than a trust), or(a)was received when the trust, the beneficiary and persons with whom the beneficiary was not dealing at arm’s length did not own in total more than 5% of the issued shares of any class of the capital stock of the corporation from which the dividend was received; and(b)was received on a share that the trust owned throughout the 365-day period that ended immediately before the disposition.Marginal note:Loss on share that is not capital property(4)Subject to subsections 112(5.5) and 112(5.6), the amount of any loss of a taxpayer (other than a trust) from the disposition of a share of the capital stock of a corporation that is property (other than capital property) of the taxpayer is deemed to be the amount of the loss determined without reference to this subsection minus,(a)where the taxpayer is an individual and the corporation is resident in Canada, the total of all dividends received by the individual on the share;(b)where the taxpayer is a partnership, the total of all dividends received by the partnership on the share; and(c)where the taxpayer is a corporation, the total of all amounts received by the taxpayer on the share each of which is(i)a taxable dividend, to the extent of the amount of the dividend that was deductible under this section, section 113 or subsection 115(1) or 138(6) in computing the taxpayer’s taxable income or taxable income earned in Canada for any taxation year, or(ii)a dividend (other than a taxable dividend).Marginal note:Loss on share that is not capital property — excluded dividends(4.01)A qualified dividend shall not be included in the total determined under paragraph (4)(a), (b) or (c) if the taxpayer establishes that(a)it was received when the taxpayer and persons with whom the taxpayer was not dealing at arm’s length did not own in total more than 5% of the issued shares of any class of the capital stock of the corporation from which the dividend was received; and(b)it was received on a share that the taxpayer owned throughout the 365-day period that ended immediately before the disposition.Marginal note:Fair market value of shares held as inventory(4.1)For the purpose of section 10, the fair market value at any time of a share of the capital stock of a corporation is deemed to be equal to the fair market value of the share at that time, plus(a)where the shareholder is a corporation, the total of all amounts received by the shareholder on the share before that time each of which is(i)a taxable dividend, to the extent of the amount of the dividend that was deductible under this section, section 113 or subsection 115(1) or 138(6) in computing the shareholder’s taxable income or taxable income earned in Canada for any taxation year, or(ii)a dividend (other than a taxable dividend);(b)where the shareholder is a partnership, the total of all amounts each of which is a dividend received by the shareholder on the share before that time; and(c)where the shareholder is an individual and the corporation is resident in Canada, the total of all amounts each of which is a dividend received by the shareholder on the share before that time (or, where the shareholder is a trust, that would have been so received if this Act were read without reference to subsection 104(19)).Marginal note:Fair market value of shares held as inventory — excluded dividends(4.11)A qualified dividend shall not be included in the total determined under paragraph (4.1)(a), (b) or (c) if the shareholder establishes that(a)it was received while the shareholder and persons with whom the shareholder was not dealing at arm’s length did not hold in total more than 5% of the issued shares of any class of the capital stock of the corporation from which the dividend was received; and(b)it was received on a share that the shareholder held throughout the 365-day period that ended at the time referred to in subsection 112(4.1).Marginal note:Loss on share held by trust(4.2)Subject to subsections 112(5.5) and 112(5.6), the amount of any loss of a trust from the disposition of a share that is property (other than capital property) of the trust is deemed to be the amount of the loss determined without reference to this subsection minus(a)the total of all amounts each of which is a dividend received by the trust on the share, to the extent that the amount was not designated under subsection 104(20) in respect of a beneficiary of the trust; and(b)the total of all amounts each of which is a dividend received on the share that was designated under subsection 104(19) or 104(20) by the trust in respect of a beneficiary of the trust.Marginal note:Loss on share held by trust — excluded dividends(4.21)A qualified dividend shall not be included in the total determined under paragraph (4.2)(a) if the taxpayer establishes that(a)it was received when the trust and persons with whom the trust was not dealing at arm’s length did not own in total more than 5% of the issued shares of any class of the capital stock of the corporation from which the dividend was received; and(b)it was received on a share that the trust owned throughout the 365-day period that ended immediately before the disposition.Marginal note:Loss on share held by trust — excluded dividends(4.22)A qualified dividend shall not be included in the total determined under paragraph (4.2)(b) if the taxpayer establishes that(a)it was received when the trust, the beneficiary and persons with whom the beneficiary was not dealing at arm’s length did not own in total more than 5% of the issued shares of any class of the capital stock of the corporation from which the dividend was received; and(b)it was received on a share that the trust owned throughout the 365-day period that ended immediately before the disposition.(4.3)[Repealed, 1998, c. 19, s. 131]Marginal note:Disposition of share by financial institution(5)Subsection 112(5.2) applies to the disposition of a share by a taxpayer in a taxation year where(a)the taxpayer is a financial institution in the year;(b)the share is a mark-to-market property for the year; and(c)the taxpayer received(i)a dividend on the share at a time when the taxpayer and persons with whom the taxpayer was not dealing at arm’s length held in total more than 5% of the issued shares of any class of the capital stock of the corporation from which the dividend was received, or(ii)a dividend on the share under subsection 84(3).Marginal note:Share held for less than one year(5.1)Subsection 112(5.2) applies to the disposition of a share by a taxpayer in a taxation year where(a)the disposition is an actual disposition;(b)the taxpayer did not hold the share throughout the 365-day period that ended immediately before the disposition; and(c)the share was a mark-to-market property of the taxpayer for a taxation year that begins after October 1994 and in which the taxpayer was a financial institution.Marginal note:Adjustment re dividends(5.2)Subject to subsection 112(5.3), where subsection 112(5) or 112(5.1) provides that this subsection applies to the disposition of a share by a taxpayer at any time, the taxpayer’s proceeds of disposition shall be deemed to be the amount determined by the formulaA + B - (C - D)whereAis the taxpayer’s proceeds determined without reference to this subsection,Bis(a)if the taxpayer received a dividend under subsection 84(3) in respect of the share, the total determined under subparagraph (b)(ii), and(b)in any other case, the lesser of(i)the loss, if any, from the disposition of the share that would be determined before the application of this subsection if the cost of the share to any taxpayer were determined without reference to(A)paragraphs 87(2)(e.2) and (e.4), 88(1)(c), 138(11.5)(e) and 142.5(2)(b),(B)subsection 85(1), where the provisions of that subsection are required by paragraph 138(11.5)(e) to be applied, and(C)paragraph 142.6(1)(d), and(ii)the total of all amounts each of which is(A)where the taxpayer is a corporation, a taxable dividend received by the taxpayer on the share, to the extent of the amount that was deductible under this section or subsection 115(1) or 138(6) in computing the taxpayer’s taxable income or taxable income earned in Canada for any taxation year,(B)where the taxpayer is a partnership, a taxable dividend received by the taxpayer on the share, to the extent of the amount that was deductible under this section or subsection 115(1) or 138(6) in computing the taxable income or taxable income earned in Canada for any taxation year of members of the partnership,(C)where the taxpayer is a trust, an amount designated under subsection 104(19) in respect of a taxable dividend on the share, or(D)a dividend (other than a taxable dividend) received by the taxpayer on the share,Cis the total of all amounts each of which is the amount by which(a)the taxpayer’s proceeds of disposition on a deemed disposition of the share before that time were increased because of this subsection,(b)where the taxpayer is a corporation or trust, a loss of the taxpayer on a deemed disposition of the share before that time was reduced because of subsection 112(3), 112(3.2), 112(4) or 112(4.2), or(c)where the taxpayer is a partnership, a loss of a member of the partnership on a deemed disposition of the share before that time was reduced because of subsection (3.1) or (4), andDis the total of all amounts each of which is the amount by which the taxpayer’s proceeds of disposition on a deemed disposition of the share before that time were decreased because of this subsection.Marginal note:Subsection (5.2) — excluded dividends(5.21)A dividend, other than a dividend received under subsection 84(3), shall not be included in the total determined under subparagraph (b)(ii) of the description of B in subsection (5.2) unless(a)the dividend was received when the taxpayer and persons with whom the taxpayer did not deal at arm’s length held in total more than 5% of the issued shares of any class of the capital stock of the corporation from which the dividend was received; or(b)the share was not held by the taxpayer throughout the 365-day period that ended immediately before the disposition.Marginal note:Adjustment not applicable(5.3)For the purpose of determining the cost of a share to a taxpayer on a deemed reacquisition of the share after a deemed disposition of the share, the taxpayer’s proceeds of disposition shall be determined without regard to subsection 112(5.2).Marginal note:Deemed dispositions(5.4)Where a taxpayer disposes of a share at any time,(a)for the purpose of determining whether subsection 112(5.2) applies to the disposition, the conditions in subsections 112(5) and 112(5.1) shall be applied without regard to a deemed disposition and reacquisition of the share before that time; and(b)total amounts under subsection 112(5.2) in respect of the disposition shall be determined from the time when the taxpayer actually acquired the share.Marginal note:Stop-loss rules not applicable(5.5)Subsections 112(3) to 112(4) and 112(4.2) do not apply to the disposition of a share by a taxpayer in a taxation year that begins after October 1994 where(a)the share is a mark-to-market property for the year and the taxpayer is a financial institution in the year; or(b)subsection 112(5.2) applies to the disposition.Marginal note:Stop-loss rules restricted(5.6)In determining whether any of subsections 112(3) to 112(4) and 112(4.2) apply to reduce a loss of a taxpayer from the disposition of a share, this Act shall be read without reference to paragraphs 112(3.01)(b) and 112(3.11)(b), subclauses 112(3.2)(a)(ii)(C)(I) and 112(3.3)(a)(ii)(C)(I) and paragraphs 112(3.31)(b), 112(3.32)(b), 112(4.01)(b), 112(4.21)(b) and 112(4.22)(b) where(a)the disposition occurs(i)because of subsection 142.5(2) in a taxation year that includes October 31, 1994, or(ii)because of paragraph 142.6(1)(b) after October 30, 1994; or(b)the share was a mark-to-market property of the taxpayer for a taxation year that begins after October 1994 in which the taxpayer was a financial institution.Marginal note:Meaning of certain expressions(6)For the purposes of this section,(a)“dividend” and “taxable dividend” do not include a capital gains dividend (within the meaning assigned by subsection 131(1)) or any dividend received by a taxpayer on which the taxpayer was required to pay tax under Part VII of theIncome Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, as it read on March 31, 1977;(b)one corporation is controlled by another corporation if more than 50% of its issued share capital (having full voting rights under all circumstances) belongs to the other corporation, to persons with whom the other corporation does not deal at arm’s length, or to the other corporation and persons with whom the other corporation does not deal at arm’s length; and(c)financial institutionandmark-to-market propertyhave the meanings assigned by subsection 142.2(1).Marginal note:Interpretation — qualified dividend(6.1)For the purposes of this section, a dividend on a share is a qualified dividend to the extent that(a)it is a dividend other than a dividend received under subsection 84(3); or(b)it is received under subsection 84(3) and,(i)if the share is held by an individual other than a trust, the dividend is received by the individual,(ii)if the share is held by a corporation, the dividend is received by the corporation while it is a private corporation, and is paid by another private corporation,(iii)if the share is held by a trust,(A)the dividend is received by the trust,(B)the dividend is designated under subsection 104(19) by the trust in respect of a beneficiary and(I)the beneficiary is an individual other than a trust,(II)the beneficiary is a private corporation when the dividend is received by it and the dividend is paid by another private corporation,(III)the beneficiary is another trust that does not designate the dividend under subsection 104(19), or(IV)the beneficiary is a partnership all of the members of which are, when the dividend is received, a person described by any of subclauses (I) to (III), or(C)the dividend is designated by the trust under subsection 104(19) in respect of a beneficiary that is another trust or a partnership and the trust establishes that the dividend is received by a person described by any of subclauses (B)(I) to (III), and(iv)if the share is held by a partnership,(A)the dividend is included in the income of a member of a partnership and(I)the member is an individual, or(II)the member is a private corporation when the dividend is received by it and the dividend is paid by another private corporation, or(B)the dividend is designated under subsection 104(19) by a member of a partnership that is a trust in respect of a beneficiary described by any of subclauses (iii)(B)(I) to (IV) or is described by clause (iii)(C).Marginal note:Rules where shares exchanged(7)Where a share (in this subsection referred to as the “new share”) has been acquired in exchange for another share (in this subsection referred to as the “old share”) in a transaction to which section 51, 85.1, 86 or 87 applies, for the purposes of the application of any of subsections 112(3) to 112(3.32) in respect of a disposition of the new share, the new share is deemed to be the same share as the old share, except that(a)any dividend received on the old share is deemed for those purposes to have been received on the new share only to the extent of the proportion of the dividend that(i)the shareholder’s adjusted cost base of the new share immediately after the exchangeis of(ii)the shareholder’s adjusted cost base of all new shares immediately after the exchange acquired in exchange for the old share; and(b)the amount, if any, by which a loss from the disposition of the new share is reduced because of the application of this subsection shall not exceed the proportion of the shareholder’s adjusted cost base of the old share immediately before the exchange that(i)the shareholder’s adjusted cost base of the new share immediately after the exchangeis of(ii)the shareholder’s adjusted cost base of all new shares, immediately after the exchange, acquired in exchange for the old share.Marginal note:Synthetic disposition  — holding period(8)If a synthetic disposition arrangement is entered into in respect of a property owned by a taxpayer and the synthetic disposition period of the arrangement is 30 days or more, for the purposes of paragraphs (3.01)(b) and (3.11)(b), subclauses (3.2)(a)(ii)(C)(I) and (3.3)(a)(ii)(C)(I) and paragraphs (3.31)(b), (3.32)(b), (4.01)(b), (4.11)(b), (4.21)(b), (4.22)(b), (5.1)(b) and (5.21)(b) and subsection (9), the taxpayer is deemed not to own the property during the synthetic disposition period.Marginal note:Exception(9)Subsection (8) does not apply in respect of a property owned by a taxpayer in respect of a synthetic disposition arrangement if the taxpayer owned the property throughout the 365-day period (determined without reference to this subsection) that ended immediately before the synthetic disposition period of the arrangement.Marginal note:Exception(9.1)Subsection (8) does not apply for the purpose of paragraph (5.21)(b) in respect of a dividend received on a share, referred to in paragraph (a) of the description of B in subsection (5.2), during a synthetic disposition period of a synthetic disposition arrangement in respect of that share.Marginal note:Synthetic equity arrangements — ordering(10)For the purposes of subsections (3), (3.1), (4), (4.1) and (5.2), if a synthetic equity arrangement is in respect of a number of shares that are identical properties (referred to in this subsection asidentical shares) that is less than the total number of such identical shares owned by a person or partnership at that time and in respect of which there is no other synthetic equity arrangement, the synthetic equity arrangement is deemed to be in respect of those identical shares in the order in which the person or partnership acquired them.Marginal note:Interest in a partnership — cost reduction(11)In computing the cost to a taxpayer, at any time, of an interest in a partnership that is property (other than capital property) of the taxpayer, there is to be deducted an amount equal to the total of all amounts each of which is the taxpayer’s share of any loss of the partnership from the disposition by the partnership, or another partnership of which the partnership is directly or indirectly a member, of a share of the capital stock of a corporation (referred to in this subsection and subsection (12) as the “partnership loss”) in a fiscal period of the partnership that includes that time or a prior fiscal period, computed without reference to subsections (3.1), (4) and (5.2), to the extent that the taxpayer’s share of the partnership loss has not previously reduced the taxpayer’s cost of the interest in the partnership because of the application of this subsection.Marginal note:Application(12)For the purposes of subsection (11), if a taxpayer disposes of an interest in a partnership at any particular time, the taxpayer’s share of a partnership loss is to be computed as if(a)the fiscal period of each partnership of which the taxpayer is directly or indirectly a member had ended immediately before the time that is immediately before the particular time;(b)any share of the capital stock of a corporation that was property of a partnership referred to in paragraph (a) at the particular time had been disposed of by the relevant partnership immediately before the end of that fiscal period for proceeds equal to its fair market value at the particular time; and(c)each member of a partnership referred to in paragraph (a) were allocated a share of any loss (computed without reference to subsections (3.1), (4) and (5.2)) in respect of dispositions described in paragraph (b) determined by reference to the member’s specified proportion for the fiscal period referred to in paragraph (a).Marginal note:Application(13)For the purposes of subsection (11), if a taxpayer (referred to as the “transferee” in this subsection) acquires an interest in a partnership at any time from another taxpayer (referred to as the “transferor” in this subsection), in computing the cost of the partnership interest to the transferee there is to be added an amount equal to the total of all amounts each of which is an amount deducted from the transferor’s cost of the partnership interest because of subsection (11), other than an amount to which subsection (3.1) would apply.
(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,
(a)a person or partnership (in this subsection and subsection (2.21) referred to as the “guarantor”) that is a specified financial institution or a specified person in relation to a specified financial institution, but that is not the issuer of the share or an individual other than a trust, is, at or immediately before the time the dividend was received, obligated, either absolutely or contingently and either immediately or in the future, to effect any undertaking (in this subsection and subsections (2.21) and (2.22) referred to as a “guarantee agreement”), including any guarantee, covenant or agreement to purchase or repurchase the share and including the lending of funds to or the placing of amounts on deposit with, or on behalf of, the particular corporation or any specified person in relation to the particular corporation given to ensure that(i)any loss that the particular corporation or a specified person in relation to the particular corporation may sustain by reason of the ownership, holding or disposition of the share or any other property is limited in any respect, or(ii)the particular corporation or a specified person in relation to the particular corporation will derive earnings by reason of the ownership, holding or disposition of the share or any other property; and(b)the guarantee agreement was given as part of a transaction or event or a series of transactions or events that included the issuance of the share.
(i)any loss that the particular corporation or a specified person in relation to the particular corporation may sustain by reason of the ownership, holding or disposition of the share or any other property is limited in any respect, or(ii)the particular corporation or a specified person in relation to the particular corporation will derive earnings by reason of the ownership, holding or disposition of the share or any other property; and
(a)a share that is at the time the dividend is received a share described in paragraph (e) of the definitionterm preferred sharein subsection 248(1);(b)a grandfathered share, a taxable preferred share issued before December 16, 1987 or a prescribed share;(c)a taxable preferred share issued after December 15, 1987 and of a class of the capital stock of a corporation that is listed on a designated stock exchange where all guarantee agreements in respect of the share were given by one or more of the issuer of the share and persons that are related (otherwise than because of a right referred to in paragraph 251(5)(b)) to the issuer unless, at the time the dividend is paid to the particular corporation, dividends in respect of more than 10 per cent of the issued and outstanding shares to which the guarantee agreement applies are paid to the particular corporation or the particular corporation and specified persons in relation to the particular corporation; or(d)a share(i)that was not acquired by the particular corporation in the ordinary course of its business,(ii)in respect of which the guarantee agreement was not given in the ordinary course of the guarantor’s business, and(iii)the issuer of which is, at the time the dividend is paid, related (otherwise than because of a right referred to in paragraph 251(5)(b)) to both the particular corporation and the guarantor.
(i)that was not acquired by the particular corporation in the ordinary course of its business,(ii)in respect of which the guarantee agreement was not given in the ordinary course of the guarantor’s business, and(iii)the issuer of which is, at the time the dividend is paid, related (otherwise than because of a right referred to in paragraph 251(5)(b)) to both the particular corporation and the guarantor.
(a)where a guarantee agreement in respect of a share is given at any particular time after 8:00 p.m