Income Tax Amendments Act, 2000 (S.C. 2001, c. 17)
Full Document:
Assented to 2001-06-14
23. (1) Subparagraphs 39(9)(b)(i) to (i.2) of the Act are replaced by the following:
(i) the total of all amounts each of which is twice the amount deducted by the taxpayer under section 110.6 in computing the taxpayer’s taxable income for a preceding taxation year that
(A) ended before 1988, or
(B) begins after October 17, 2000,
(i.1) the total of all amounts each of which is
(A) 3/2 of the amount deducted under section 110.6 in computing the taxpayer’s taxable income for a preceding taxation year that
(I) ended after 1987 and before 1990, or
(II) began after February 27, 2000 and ended before October 18, 2000, or
(B) the amount determined by multiplying the reciprocal of the fraction in paragraph 38(a) that applies to the taxpayer for each of the taxpayer’s taxation years that includes February 28, 2000 or October 18, 2000 by the amount deducted under section 110.6 in computing the taxpayer’s taxable income for that year, and
(i.2) the total of all amounts each of which is 4/3 of the amount deducted under section 110.6 in computing the taxpayer’s taxable income for a preceding taxation year that ended after 1989 and before February 28, 2000
(2) Subparagraphs 39(10)(b)(i) to (i.2) of the Act are replaced by the following:
(i) the total of all amounts each of which is twice the amount designated by the trust under subsection 104(21.2) in respect of a beneficiary in its return of income for a preceding taxation year that
(A) ended before 1988, or
(B) begins after October 17, 2000,
(i.1) the total of all amounts each of which is
(A) 3/2 of the amount designated by the trust under subsection 104(21.2) in respect of a beneficiary in its return of income for a preceding taxation year that
(I) ended after 1987 and before 1990, or
(II) began after February 27, 2000 and ended before October 18, 2000, or
(B) the amount determined by multiplying the reciprocal of the fraction in paragraph 38(a) that applies to the trust for each of the trust’s taxation years that includes February 28, 2000 or October 18, 2000 by the amount designated by the trust under subsection 104(21.2) in respect of a beneficiary in its return of income for that year, and
(i.2) the total of all amounts each of which is 4/3 of the amount designated by the trust under subsection 104(21.2) in respect of a beneficiary in its return of income for a preceding taxation year that ended after 1989 and before February 28, 2000
(3) Subsection 39(11) of the Act is replaced by the following:
Marginal note:Recovery of bad debt
(11) Where an amount is received in a taxation year on account of a debt (in this subsection referred to as the “recovered amount”) in respect of which a deduction for bad debts had been made under subsection 20(4.2) in computing a taxpayer’s income for a preceding taxation year, the amount, if any, by which 1/2 of the recovered amount exceeds the amount determined under paragraph 12(1)(i.1) in respect of the recovered amount is deemed to be a taxable capital gain of the taxpayer from a disposition of capital property in the year.
(4) Subsections (1) to (3) apply to taxation years that end after February 27, 2000 except that, for taxation years that ended after February 27, 2000 and before October 18, 2000, the reference to the fraction “1/2” in subsection 39(11) of the Act, as enacted by subsection (3), shall be read as a reference to the fraction “2/3”.
24. (1) Paragraphs (a) and (b) of the description of C in the definition “exempt capital gains balance” in subsection 39.1(1) of the Act are replaced by the following:
(a) if the entity is a trust described in any of paragraphs (d) and (h) to (j) of the definition “flow-through entity” in this subsection, the total of
(i) 3/2 of the total of all amounts each of which is the amount by which the individual’s taxable capital gain (determined without reference to this section), for a preceding taxation year that began after February 27, 2000 and ended before October 18, 2000 that resulted from a designation made under subsection 104(21) by the trust, was reduced under subsection (3),
(ii) 4/3 of the total of all amounts each of which is the amount by which the individual’s taxable capital gain (determined without reference to this section), for a preceding taxation year that ended before February 28, 2000 and that resulted from a designation made under subsection 104(21) by the trust, was reduced under subsection (3),
(iii) the amount claimed by the individual under subparagraph 104(21.4)(a)(ii) or (21.7)(b)(ii) for a preceding taxation year, and
(iv) twice the total of all amounts each of which is the amount by which the individual’s taxable capital gain (determined without reference to this section) for a preceding taxation year that began after October 17, 2000 and that resulted from a designation made under subsection 104(21) by the trust, was reduced under subsection (3),
(b) if the entity is a partnership, the total of
(i) 3/2 of the total of
(A) the total of all amounts each of which is the amount by which the individual’s share of the partnership’s taxable capital gains (determined without reference to this section), for its fiscal period that began after February 27, 2000 and ended before October 18, 2000, was reduced under subsection (4), and
(B) the total of all amounts each of which is the amount by which the individual’s share of the partnership’s income from a business (determined without reference to this section), for its fiscal period that began after February 27, 2000 and ended before October 18, 2000, was reduced under subsection (5),
(ii) 4/3 of the total of
(A) the total of all amounts each of which is the amount by which the individual’s share of the partnership’s taxable capital gains (determined without reference to this section), for its fiscal period that ended before February 28, 2000 and in a preceding taxation year was reduced under subsection (4), and
(B) the total of all amounts each of which is the amount by which the individual’s share of the partnership’s income from a business (determined without reference to this section), for its fiscal period that ended before February 28, 2000 and in a preceding taxation year, was reduced under subsection (5),
(iii) the product obtained when the reciprocal of the fraction in paragraph 38(a) that applies to the partnership for its fiscal period that includes February 28, 2000 or October 17, 2000 is multiplied by the total of
(A) the total of all amounts each of which is the amount by which the individual’s share of the partnership’s taxable capital gains (determined without reference to this section), for its fiscal period that includes February 28, 2000 or October 17, 2000 and ended in a preceding taxation year, was reduced under subsection (4), and
(B) the total of all amounts each of which is the amount by which the individual’s share of the partnership’s income from a business (determined without reference to this section), for its fiscal period that includes February 28, 2000 or October 17, 2000 and ended in a preceding taxation year was reduced under subsection (5), and
(iv) twice the total of
(A) the total of all amounts each of which is the amount by which the individual’s share of the partnership’s taxable capital gains (determined without reference to this section), for its fiscal period that began after October 17, 2000 and ended in a preceding taxation year, was reduced under subsection (4), and
(B) the total of all amounts each of which is the amount by which the individual’s share of the partnership’s income from a business (determined without reference to this section), for its fiscal period that began after October 17, 2000 and ended in a preceding taxation year, was reduced under subsection (5), and
(2) Paragraphs (a) and (b) of the description of B in subsection 39.1(2) of the Act are amended by replacing the reference to the expression “4/3 of” with a reference to the word “twice”.
(3) Subsection 39.1(3) of the Act is amended by replacing the reference to the fraction “3/4” with a reference to the fraction “1/2”.
(4) The description of A in subsection 39.1(4) of the Act is amended by replacing the reference to the fraction “3/4” with a reference to the fraction “1/2”.
(5) Subsection 39.1(5) of the Act is replaced by the following:
Marginal note:Reduction in share of partnership’s income from a business
(5) An individual’s share otherwise determined for a taxation year of the income of a partnership from a business for the partnership’s fiscal period that ends in the year and the individual’s share of the partnership’s taxable capital gain, if any, arising under paragraph 14(1)(b) shall be reduced by such amount as the individual claims, not exceeding the lesser of
(a) the amount, if any, by which 1/2 of the individual’s exempt capital gains balance for the year in respect of the partnership exceeds the total of
(i) the amount, if any, claimed under subsection (4) by the individual for the year in respect of the partnership, and
(ii) all amounts, if any, claimed under this subsection by the individual for the year in respect of other businesses of the partnership, and
(b) the amount determined by the formula
A × (B / C)
where
- A
- is the amount included under paragraph 14(1)(b) in computing the income of the partnership from the business for the fiscal period,
- B
- is the amount that would otherwise be the individual’s share of the partnership’s income from the business for the fiscal period, and
- C
- is the partnership’s income from the business for the fiscal period.
(6) Subsection (1) applies to taxation years that end after February 27, 2000.
(7) Subsections (2) to (5) apply to taxation years that end after February 27, 2000 except that, where the taxation year of an entity that ends in the taxpayer’s taxation year includes February 28, 2000 or October 17, 2000, or began after February 28, 2000 and ended before October 17, 2000,
(a) the reference to the word “twice” in paragraphs (a) and (b) of the description of B in subsection 39.1(2) of the Act, as enacted by subsection (2), shall be read as a reference to the expression “the fraction that is the reciprocal of the fraction in paragraph 38(a), as enacted by subsection 22(1) of the Income Tax Amendments Act, 2000, that applies to the entity for its taxation year that ends in the taxpayer’s taxation year, multiplied by”;
(b) the reference to the fraction “1/2” in subsection 39.1(3) of the Act, as enacted by subsection (3), shall be read as a reference to the fraction in paragraph 38(a) of the Act, as enacted by subsection 22(1), that applies to the entity for its taxation year that ends in the taxpayer’s taxation year;
(c) the reference to the fraction “1/2” in the description of A in subsection 39.1(4) of the Act, as enacted by subsection (4), shall be read as reference to the fraction in paragraph 38(a) of the Act, as enacted by subsection 22(1), that applies to the entity for its taxation year that ends in the taxpayer’s taxation year;
(d) the reference to the fraction “1/2” in subsection 39.1(5) of the Act, as enacted by subsection (5), shall be read as reference to the fraction in paragraph 14(1)(b) of the Act, as enacted by subsection 7(1), that applies to the entity for its taxation year that ends in the taxpayer’s taxation year; and
(e) subparagraph 39.1(5)(a)(i) of the Act, as enacted by subsection (5), shall be read as follows:
(i) the amount, if any, claimed under subsection (4) by the individual for the year in respect of the partnership multiplied by the fraction obtained when the fraction in paragraph 14(1)(b) applicable to the entity for its taxation year that ends in the taxpayer’s taxation year is divided by the fraction in paragraph 38(a) that applies to the entity for that taxation year.
- Date modified: