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Income Tax Amendments Act, 2000 (S.C. 2001, c. 17)

Assented to 2001-06-14

  •  (1) Subparagraph (a)(ii) of the definition “investment expense” in subsection 110.6(1) of the Act is replaced by the following:

    • (ii) paragraph 20(1)(j) or subsection 65(1), 66(4), 66.1(3), 66.2(2), 66.21(4) or 66.4(2),

  • (2) Paragraph (d) of the definition “investment expense” in subsection 110.6(1) of the Act is replaced by the following:

    • (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

  • (3) Paragraph 110.6(2)(a) of the Act is replaced by the following:

    • (a) the amount determined by the formula

      [$250,000 – (A + B + C + D)] × E

      where

      A 
      is the total of all amounts each of which is an amount deducted under this section in computing the individual’s taxable income for a preceding taxation year that ended before 1988,
      B 
      is the total of all amounts each of which is
      • (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,

      C 
      is 2/3 of the total of all amounts each of which is an amount deducted under this section in computing the individual’s taxable income
      • (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,

      D 
      is the product obtained when the reciprocal of the fraction determined for E that applied to the taxpayer for a preceding taxation year that began before and included February 28, 2000 or October 17, 2000 is multiplied by the amount deducted under this subsection in computing the individual’s taxable income for that preceding year, and
      E 
      is
      • (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

        F 
        is the amount deemed by subsection 14(1.1) to be a taxable capital gain of the taxpayer for the taxation year,
        G 
        is the amount by which the amount determined in respect of the taxpayer for the year under paragraph 3(b) exceeds the amount determined for F, and
        H 
        is the total of
        • (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,

  • (4) Paragraph 110.6(2.1)(a) of the Act is replaced by the following:

    • (a) the amount determined by the formula in paragraph (2)(a) in respect of the individual for the year,

  • (5) Subsection 110.6(4) of the Act is replaced by the following:

    • Marginal note:Maximum capital gains deduction

      (4) Notwithstanding subsection (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 amount determined by the formula in paragraph (2)(a) in respect of the individual for the year.

  • (6) The portion of subsection 110.6(12) of the Act before paragraph (a) is replaced by the following:

    • Marginal note:Trust deduction

      (12) Notwithstanding any other provision of this Act, a trust described in paragraph 104(4)(a) or (a.1) (other than a trust that elected under subsection 104(5.3), an alter ego trust or a joint spousal or common-law partner trust) may, in computing its taxable income for its taxation year that includes the day determined under paragraph 104(4)(a) or (a.1), as the case may be, in respect of the trust, deduct under this section an amount equal to the least of

  • (7) Paragraph 110.6(12)(c) of the Act is replaced by the following:

    • (c) the amount, if any, by which the amount determined by the formula in paragraph (2)(a) in respect of the taxpayer’s spouse or common-law partner for the taxation year in which that spouse or common-law partner died exceeds the amount deducted under this section for that taxation year by that spouse or common-law partner.

  • (8) Subsections (1) and (2) apply to taxation years that begin after 2000.

  • (9) Subsections (3) to (5) apply to taxation years that end after February 27, 2000.

  • (10) Subsection (6) applies to the 2000 and subsequent taxation years.

  • (11) Subsection (7) applies to taxation years that end after February 27, 2000, except that the amount determined under paragraph 110.6(12)(c) of the Act, as enacted by subsection (7), in computing a trust’s taxable income for its particular taxation year that includes February 28, 2000 or October 17, 2000, or began after February 28, 2000 and ended before October 17, 2000, is deemed to be equal to the amount determined under that paragraph (without reference to this subsection) multiplied by the quotient obtained when the fraction in paragraph 38(a) of the Act, as enacted by subsection 22(1), that applies to the trust for its particular year is divided by the fraction in paragraph 38(a) of the Act, as enacted by subsection 22(1), that applies to the taxpayer’s spouse or common-law partner for the taxation year in which the spouse or common-law partner died.

  •  (1) Subclause 111(1)(e)(ii)(C)(I) of the Act is replaced by the following:

    • (I) the foreign resource pool expenses, if any, incurred by the partnership in that fiscal period,

  • (2) The description of E in the definition “non-capital loss” in subsection 111(8) of the Act is replaced by the following:

    E 
    is the total of all amounts each of which is the taxpayer’s loss for the year from an office, employment, business or property, the taxpayer’s allowable business investment loss for the year, an amount deducted under paragraph (1)(b) or section 110.6 in computing the taxpayer’s taxable income for the year or an amount that may be deducted under any of paragraphs 110(1)(d) to (d.3), (f), (j) and (k), section 112 and subsections 113(1) and 138(6) in computing the taxpayer’s taxable income for the year, and
  • (3) The description of B in the definition “non-capital loss” in subsection 111(8) of the Act is replaced by the following:

    B 
    is the amount, if any, determined in respect of the taxpayer for the year under section 110.5 or subparagraph 115(1)(a)(vii),
  • (4) The first formula in the definition “pre-1986 capital loss balance” in subsection 111(8) of the Act is replaced by the following:

    (A + B) – (C + D + E + E.1)

  • (5) The portion of the definition “pre-1986 capital loss balance” in subsection 111(8) of the Act after the description of B is replaced by the following:

    C 
    is the total of all amounts deducted under section 110.6 in computing the individual’s taxable income for taxation years that end before 1988 or after October 17, 2000,
    D 
    is 3/4 of the total of all amounts each of which is an amount deducted under section 110.6 in computing the individual’s taxable income for a taxation year, preceding the particular year, that
    • (a) ended after 1987 and before 1990, or

    • (b) began after February 27, 2000 and ended before October 18, 2000,

    E 
    is 2/3 of the total of all amounts deducted under section 110.6 in computing the individual’s taxable income for taxation years, preceding the particular year, that ended after 1989 and before February 28, 2000, and
    E.1 
    is the amount determined by the formula

    J × (0.5 / K)

    where

    J 
    is the amount deducted by the individual under section 110.6 for a taxation year of the individual, preceding the particular year, that includes February 28, 2000 or October 17, 2000, and
    K 
    is the fraction in paragraph 38(a) that applies to the individual for the individual’s taxation year referred to in the description of J.
  • (6) Paragraph 111(9)(a) of the Act is replaced by the following:

    • (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

  • (7) Subsection (1) applies to taxation years that begin after 2000.

  • (8) Subsection (2) applies to the 2000 and subsequent taxation years.

  • (9) Subsection (3) applies after June 27, 1999.

  • (10) Subsections (4) and (5) apply to taxation years that end after February 27, 2000.

  • (11) Subsection (6) applies to the 1998 and subsequent taxation years.

 
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