Income Tax Act (R.S.C., 1985, c. 1 (5th Supp.))

Marginal note:Involuntary disposition of resource property

59.1 Where in a particular taxation year an amount is deemed by subsection 44(2) to have become receivable by a taxpayer as proceeds of disposition described in paragraph (d) of the definition proceeds of disposition in section 54 of any Canadian resource property and the taxpayer elects, in the taxpayer’s return of income under this Part for the year, to have this section apply to those proceeds of disposition,

• (a) there shall be deducted in computing the taxpayer’s income for the particular year such amount as the taxpayer may claim, not exceeding the least of,

  • (i) the total of all those proceeds so becoming receivable in the particular year by the taxpayer to the extent that they have been included in the amount referred to in paragraph (a) of the description of F in the definition cumulative Canadian development expense in subsection 66.2(5) or in paragraph (a) of the description of F in the definition cumulative Canadian oil and gas property expense in subsection 66.4(5) in respect of the taxpayer,

  • (ii) the amount required to be included in computing the taxpayer’s income for the particular year by virtue of paragraph 59(3.2)(c), and

  • (iii) the taxpayer’s income for the particular year determined without reference to this section;

• (b) the amount, if any, by which

  • (i) the amount deducted under paragraph 59.1(a

  exceeds

  • (ii) the total of such of the Canadian exploration expenses, Canadian development expenses and Canadian oil and gas property expenses made or incurred by the taxpayer in the taxpayer’s ten taxation years immediately following the particular year as were designated by the taxpayer in the taxpayer’s return of income for the year in which the expense was made or incurred,

shall be included in computing the taxpayer’s income for the particular year and, notwithstanding subsections 152(4) and 152(5), such reassessment of the taxpayer’s tax, interest or penalties for any year shall be made as is necessary to give effect to the inclusion; and

• (c) any Canadian exploration expense, Canadian development expense or Canadian oil and gas property expense made or incurred by the taxpayer and designated in the taxpayer’s return of income in accordance with subparagraph 59.1(b(ii) shall (except for the purposes of subsections 66(12.1), 66(12.2), 66(12.3) and 66(12.5) and for the purpose of computing the taxpayer’s earned depletion base within the meaning assigned by regulations made for the purposes of section 65) be deemed not to be a Canadian exploration expense, a Canadian development expense or a Canadian oil and gas property expense, as the case may be, of the taxpayer.

SUBDIVISION EDeductions in Computing Income

Marginal note:Other deductions

60 There may be deducted in computing a taxpayer’s income for a taxation year such of the following amounts as are applicable

• Marginal note:Capital element of annuity payments

  (a) the capital element of each annuity payment included by virtue of paragraph 56(1)(d) in computing the taxpayer’s income for the year, that is to say,

  • (i) if the annuity was paid under a contract, an amount equal to that part of the payment determined in prescribed manner to have been a return of capital, and

  • (ii) if the annuity was paid under a will or trust, such part of the payment as can be established by the recipient not to have been paid out of the income of the estate or trust;

• Marginal note:Support

  (b) the total of all amounts each of which is an amount determined by the formula

  A - (B + C)

  where

  A

  is the total of all amounts each of which is a support amount paid after 1996 and before the end of the year by the taxpayer to a particular person, where the taxpayer and the particular person were living separate and apart at the time the amount was paid,

  B

  is the total of all amounts each of which is a child support amount that became payable by the taxpayer to the particular person under an agreement or order on or after its commencement day and before the end of the year in respect of a period that began on or after its commencement day, and

  C

  is the total of all amounts each of which is a support amount paid by the taxpayer to the particular person after 1996 and deductible in computing the taxpayer’s income for a preceding taxation year;

• Marginal note:Pension income reallocation

  (c) where the taxpayer is a pensioner (as defined in subsection 60.03(1)), any amount that is a split-pension amount (as defined in that subsection) in respect of the pensioner for the taxation year;

• (c.1) [Repealed, 1994, c. 7, Sch. VIII, s. 20(2)]

• Marginal note:Repayment of support payments

  (c.2) an amount paid by the taxpayer in the year or one of the 2 preceding taxation years under a decree, order or judgment of a competent tribunal as a repayment of an amount included under paragraph 56(1)(b) or 56(1)(c), or under paragraph 56(1)(c.1) (as it applies, in computing the taxpayer’s income for the year or a preceding taxation year, to decrees, orders and judgments made before 1993) to the extent that it was not so deducted for a preceding taxation year;

• Marginal note:Interest on death duties

  (d) an amount equal to annual interest accruing within the taxation year in respect of succession duties, inheritance taxes or estate taxes;

• Marginal note:CPP/QPP contributions on self-employed earnings

  (e) the total of

  • (i) 1/2 of the lesser of

    • (A) the total of all amounts each of which is an amount payable by the taxpayer in respect of self-employed earnings for the year as a contribution under subsection 10(1) of the Canada Pension Plan or as a like contribution under a provincial pension plan, as defined in section 3 of that Act, and

    • (B) the maximum amount of such contributions payable by the taxpayer for the year under the plan, and

  • (ii) the lesser of

    • (A) the total of all amounts each of which is an amount payable by the taxpayer in respect of self-employed earnings for the year as a contribution under subsection 10(1.‍1) or (1.‍2) of the Canada Pension Plan or as a like contribution under a provincial pension plan, as defined in section 3 of that Act, and

    • (B) the maximum amount of such contributions payable by the taxpayer for the year under the plan;

• Marginal note:Enhanced CPP contributions

  (e.1) the lesser of

  • (i) the total of all amounts each of which is an amount payable by the taxpayer for the year as an employee’s contribution under subsection 8(1.‍1) or (1.‍2) of the Canada Pension Plan or as a like contribution under a provincial pension plan, as defined in section 3 of that Act, and

  • (ii) the maximum amount of such contributions payable by the taxpayer for the year under the plan;

• Marginal note:Restrictive covenant — bad debt

  (f) all debts owing to a taxpayer that are established by the taxpayer to have become bad debts in the taxation year and that are in respect of an amount included because of the operation of subsection 6(3.1) or 56.4(2) in computing the taxpayer’s income in a preceding taxation year;

• Marginal note:Quebec parental insurance plan — self-employed premiums

  (g) the amount determined by the formula

  A – B

  where

  A

  is the total of all amounts each of which is an amount payable by the taxpayer in respect of self-employed earnings for the taxation year as a premium under the Act respecting parental insurance, R.S.Q., c. A-29.011, and

  B

  is the total of all amounts each of which is an amount that would be payable by the taxpayer as an employee’s premium under the Act respecting parental insurance, R.S.Q., c. A-29.011, if those earnings were employment income of the taxpayer for the taxation year;

• Marginal note:Premium or payment – FHSA, PRPP, RRSP or RRIF

  (i) any amount that is deductible under section 146, 146.3 or 146.6 or subsection 147.3(13.1) or 147.5(19) in computing the income of the taxpayer for the year;

• Marginal note:Transfer of superannuation benefits

  (j) such part of the total of all amounts each of which is

  • (i) a superannuation or pension benefit (other than any amount in respect of the benefit that is deducted in computing the taxable income of the taxpayer for a taxation year because of subparagraph 110(1)(f)(i) or a benefit that is part of a series of periodic payments) payable out of or under a pension plan that is not a registered pension plan, attributable to services rendered by the taxpayer or a spouse or common-law partner or former spouse or common-law partner of the taxpayer in a period throughout which that person was not resident in Canada, and included in computing the income of the taxpayer for the year because of subparagraph 56(1)(a)(i), or

  • (ii) an eligible amount in respect of the taxpayer for the year under section 60.01, subsection 104(27) or 104(27.1) or paragraph 147(10.2)(d),

  as

  • (iii) is designated by the taxpayer in the taxpayer’s return of income under this Part for the year, and

  • (iv) does not exceed the total of all amounts each of which is an amount paid by the taxpayer in the year or within 60 days after the end of the year

    • (A) as a contribution to or under a registered pension plan for the taxpayer’s benefit, other than the portion thereof deductible under paragraph 8(1)(m) in computing the taxpayer’s income for the year,

    • (B) as a premium (within the meaning assigned by subsection 146(1)) under a registered retirement savings plan under which the taxpayer is the annuitant (within the meaning assigned by subsection 146(1)), other than the portion thereof designated for a taxation year for the purposes of paragraph 60(l, or

    • (C) to or under a registered retirement income fund under which the taxpayer is the annuitant, as defined in subsection 146.3(1), other than the portion thereof designated for a taxation year for the purposes of paragraph (l),

    to the extent that the amount was not deducted in computing the taxpayer’s income for a preceding taxation year;

• Marginal note:Transfer of surplus

  (j.01) such part of the total of all amounts each of which is an amount received by the taxpayer before March 28, 1988 that can reasonably be considered to be a payment in respect of the actuarial surplus under a defined benefit provision (within the meaning assigned by subsection 147.1(1)) of a registered pension plan and that is included in computing the income of the taxpayer for the year by virtue of subparagraph 56(1)(a)(i) (other than any portion thereof deducted by the taxpayer under subsection 60.2(1) in computing the taxpayer’s income for the year) as

  • (i) is designated by the taxpayer in the taxpayer’s return of income under this Part for the year, and

  • (ii) does not exceed the total of all amounts each of which as an amount paid by the taxpayer in the year or within 60 days after the end of the year

    • (A) as a contribution to or under a registered pension plan for the taxpayer’s benefit, other than the portion thereof deductible under paragraph 60(j) or 60(j.1) or 8(1)(m) of this Act or paragraph 8(1)(m.1) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, in computing the taxpayer’s income for the year, or

    • (B) as a premium (within the meaning assigned by subsection 146(1)) under a registered retirement savings plan under which the taxpayer is the annuitant (within the meaning assigned by subsection 146(1)), other than the portion thereof that has been designated for the purposes of paragraph 60(j), 60(j.1) or 60(l,

    to the extent that it was not deducted in computing the taxpayer’s income for a preceding taxation year;

• Marginal note:Payment to registered pension plan

  (j.02) an amount equal to the lesser of

  • (i) the total of

    • (A) all contributions made in the year by the taxpayer to registered pension plans in respect of eligible service of the taxpayer before 1990 under the plans, where the taxpayer was obliged under the terms of an agreement in writing entered into before March 28, 1988 to make the contributions, and

    • (B) all amounts each of which is an amount paid in the year by the taxpayer to a registered pension plan as

      • (I) a repayment under a prescribed statutory provision of an amount received from the plan that was included under subsection 56(1) in computing the taxpayer’s income for a taxation year ending before 1990, where the taxpayer was obliged as a consequence of a written election made before March 28, 1988 to make the repayment, or

      • (II) interest in respect of a repayment referred to in subclause 60(j.02)(i)(B)(I),

    other than the portion of that total that is deductible under paragraph 8(1)(m) or paragraph 60(j.03) in computing the taxpayer’s income for the year, and

  • (ii) the total of all amounts each of which is an amount paid out of or under a registered pension plan as part of a series of periodic payments and included under subsection 56(1) in computing the taxpayer’s income for the year, other than the portion of that total that can reasonably be considered to have been designated by the taxpayer for the purpose of paragraph 60(j.2);

• Marginal note:Repayments of pre-1990 pension benefits

  (j.03) an amount equal to the lesser of

  • (i) the total of all amounts each of which is an amount paid in the year or a preceding taxation year by the taxpayer to a registered pension plan that was not deductible in computing the taxpayer’s income for a preceding taxation year and that was paid as

    • (A) a repayment under a prescribed statutory provision of an amount received from the plan that was included under subsection 56(1) in computing the taxpayer’s income for a taxation year ending before 1990, or

    • (B) interest in respect of a repayment referred to in clause 60(j.03)(i)(A), and

  • (ii) the amount, if any, by which $3,500 exceeds the amount deducted under paragraph 8(1)(m) in computing the taxpayer’s income for the year;

• Marginal note:Repayments of post-1989 pension benefits

  (j.04) the total of all amounts each of which is an amount paid in the year by the taxpayer to a registered pension plan as

  • (i) a repayment under a prescribed statutory provision of an amount received from the plan that

    • (A) was included under subsection 56(1) in computing the taxpayer’s income for a taxation year ending after 1989, and

    • (B) can reasonably be considered not to have been designated by the taxpayer for the purpose of paragraph 60(j.2), or

  • (ii) interest in respect of a repayment referred to in subparagraph 60(j.04)(i),

  except to the extent that the total was deductible under paragraph 8(1)(m) in computing the taxpayer’s income for the year;

• Marginal note:Transfer of retiring allowances

  (j.1) such part of the total of all amounts each of which is an amount paid to the taxpayer by an employer, or under a retirement compensation arrangement to which the employer has contributed, as a retiring allowance and included in computing the taxpayer’s income for the year by virtue of subparagraph 56(1)(a)(ii) or paragraph 56(1)(x) as

  • (i) is designated by the taxpayer in the taxpayer’s return of income under this Part for the year,

  • (ii) does not exceed the amount, if any, by which the total of

    • (A) $2,000 multiplied by the number of years before 1996 during which the employee or former employee in respect of whom the payment was made (in this paragraph referred to as the “retiree”) was employed by the employer or a person related to the employer, and

    • (B) $1,500 multiplied by the number by which the number of years before 1989 described in clause 60(j.1)(ii)(A) exceeds the number that can reasonably be regarded as the equivalent number of years before 1989 in respect of which employer contributions under either a pension plan or a deferred profit sharing plan of the employer or a person related to the employer had vested in the retiree at the time of the payment

    exceeds the total of

    • (C) all amounts deducted under this paragraph in respect of amounts paid before the year in respect of the retiree

      • (I) by the employer or a person related to the employer, or

      • (II) under a retirement compensation arrangement to which the employer or a person related to the employer has contributed,

    • (C.1) all other amounts deducted under this paragraph for the year in respect of amounts paid in the year in respect of the retiree

      • (I) by a person related to the employer, or

      • (II) under a retirement compensation arrangement to which a person related to the employer has contributed, and

    • (D) all amounts deducted under paragraph 60(t) in computing the retiree’s income for the year in respect of a retirement compensation arrangement to which the employer or a person related to the employer has contributed, and

  • (iii) does not exceed the total of all amounts each of which is an amount paid by the taxpayer in the year or within 60 days after the end of the year in respect of the amount so designated

    • (A) as a contribution to or under a registered pension plan, other than the portion thereof deductible under paragraph 60(j) or 8(1)(m) in computing the taxpayer’s income for the year, or

    • (B) as a premium (within the meaning assigned by section 146) under a registered retirement savings plan under which the taxpayer is the annuitant (within the meaning assigned by section 146), other than the portion thereof that has been designated for the purposes of paragraph 60(j) or 60(l,

    to the extent that it was not deducted in computing the taxpayer’s income for a preceding taxation year

  and for the purposes of this paragraph, person related to the employer includes

  • (iv) any person whose business was acquired or continued by the employer, and

  • (v) a previous employer of the retiree whose service therewith is recognized in determining the retiree’s pension benefits;

• Marginal note:Transfer to spousal RRSP

  (j.2) for taxation years ending after 1988 and before 1995, such part of the total of all amounts (other than amounts paid out of or under a registered retirement savings plan or a registered retirement income fund that by reason of section 254 are considered to be amounts paid out of or under a registered pension plan) paid on a periodic basis out of or under a registered pension plan or a deferred profit sharing plan and included, by reason of subsection 56(1), in computing the taxpayer’s income for the year as

  • (i) is designated by the taxpayer in the taxpayer’s return of income under this Part for the year, and

  • (ii) does not exceed the least of

    • (A) $6,000,

    • (B) the amount, if any, by which that total exceeds the part of that total designated for the year for the purposes of paragraph 60(j) of this Act or deducted under paragraph 60(k) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, in computing the taxpayer’s income for the year, and

    • (C) the total of all amounts each of which is paid by the taxpayer in the year or within 60 days after the end of the year as a premium (within the meaning assigned by subsection 146(1)) under a registered retirement savings plan under which the taxpayer’s spouse or common-law partner (or, where the taxpayer died in the year or within 60 days after the end of the year, an individual who was the taxpayer’s spouse or common-law partner immediately before the death) is the annuitant (within the meaning assigned by subsection 146(1)), to the extent that the amount was not deducted in computing the taxpayer’s income for a preceding taxation year;

• Marginal note:Transfer of refund of premiums under RRSP

  (l) the total of all amounts each of which is an amount paid by or on behalf of the taxpayer in the year or within 60 days after the end of the year (or within such longer period after the end of the year as is acceptable to the Minister)

  • (i) as a premium under a registered retirement savings plan under which the taxpayer is the annuitant,

  • (ii) to acquire, from a person licensed or otherwise authorized under the laws of Canada or a province to carry on in Canada an annuities business, an annuity

    • (A) under which the taxpayer is the annuitant

      • (I) for the taxpayer’s life, or for the lives jointly of the taxpayer and the taxpayer’s spouse or common-law partner either without a guaranteed period, or with a guaranteed period that is not greater than 90 years minus the lesser of the age in whole years of the taxpayer and the age in whole years of the taxpayer’s spouse or common-law partner at the time the annuity was acquired, or

      • (II) for a term equal to 90 years minus the age in whole years of the taxpayer or the age in whole years of the taxpayer’s spouse or common-law partner, at the time the annuity was acquired, or

    • (B) under which the taxpayer is the annuitant for a term not exceeding 18 years minus the age in whole years of the taxpayer at the time the annuity was acquired

    that does not provide for any payment thereunder except

    • (C) the single payment by or on behalf of the taxpayer,

    • (D) annual or more frequent periodic payments

      • (I) beginning not later than one year after the date of the payment referred to in clause 60(l(ii)(C), and

      • (II) each of which is equal to all other such payments or not equal to all other such payments solely because of an adjustment that would, if the annuity were an annuity under a retirement savings plan, be in accordance with subparagraphs 146(3)(b)(iii) to 146(3)(b)(v), and

    • (E) payments in full or partial commutation of the annuity and, where the commutation is partial,

      • (I) equal annual or more frequent periodic payments thereafter, or

      • (II) annual or more frequent periodic payments thereafter that are not equal solely because of an adjustment that would, if the annuity were an annuity under a retirement savings plan, be in accordance with subparagraphs 146(3)(b)(iii) to 146(3)(b)(v);

    or

  • (iii) to a carrier as consideration for a registered retirement income fund under which the taxpayer is the annuitant

  where that total

  • (iv) is designated by the taxpayer in the taxpayer’s return of income under this Part for the year,

  • (v) does not exceed the total of

    • (A) the amount included in computing the taxpayer’s income for the year as a refund of premiums out of or under a registered retirement savings plan under which the taxpayer’s spouse or common-law partner was the annuitant,

    • (A.1) the amount included in computing the taxpayer’s income for the year as a payment (other than a payment that is part of a series of periodic payments) received by the taxpayer out of or under a pooled registered pension plan as a consequence of the death of an individual who was, immediately before the death, a spouse or common-law partner of the taxpayer,

    • (A.2) the amount included by subsection 146.5(3) in computing the taxpayer’s income for the year as a payment received by the taxpayer as a consequence of the death of an individual who was

      • (I) immediately before the death, the spouse or common-law partner of the taxpayer, or

      • (II) a parent or grandparent of the taxpayer, if, immediately before the death, the taxpayer was financially dependent on the individual for support because of mental or physical infirmity,

    • (B) the amount included in computing the taxpayer’s income for the year as a refund of premiums out of or under a registered retirement savings plan where the taxpayer was dependent by reason of physical or mental infirmity on the annuitant under the plan,

    • (B.01) the amount included in computing the taxpayer’s income for the year as a payment (other than a payment that is part of a series of periodic payments or that relates to an actuarial surplus) received by the taxpayer out of or under a pooled registered pension plan, a registered pension plan or a specified pension plan as a consequence of the death of an individual of whom the taxpayer was a child or grandchild, if the taxpayer was, immediately before the death, financially dependent on the individual for support because of mental or physical infirmity,

    • (B.1) the least of

      • (I) the amount paid by or on behalf of the taxpayer to acquire an annuity that would be described in subparagraph 60(l(ii) if that subparagraph were read without reference to clause (A) thereof,

      • (II) the amount (other than any portion of it that is included in the amount determined under clause (B), (B.01) or (B.2)) that is included in computing the taxpayer’s income for the year as

        1 a payment (other than a payment that is part of a series of periodic payments or that relates to an actuarial surplus) received by the taxpayer out of or under a pooled registered pension plan, a registered pension plan or a specified pension plan,

        2 a refund of premiums out of or under a registered retirement savings plan, or

        3 a designated benefit in respect of a registered retirement income fund (in this clause having the meaning assigned by subsection 146.3(1))

        as a consequence of the death of an individual of whom the taxpayer is a child or grandchild, and

      • (III) the amount, if any, by which the amount determined for the year under subclause 60(1)(v)(B.1)(II) in respect of the taxpayer exceeds the amount, if any, by which

        1 the total of all designated benefits of the taxpayer for the year in respect of registered retirement income funds

        exceeds

        2 the total of all amounts that would be eligible amounts of the taxpayer for the year in respect of those funds (within the meaning that would be assigned by subsection 146.3(6.11) if the taxpayer were described in paragraph (b) thereof), and

    • (B.2) all eligible amounts of the taxpayer for the year in respect of registered retirement income funds (within the meaning assigned by subsection 146.3(6.11)),

    and where the amount is paid by a direct transfer from the issuer of a registered retirement savings plan or a carrier of a registered retirement income fund,

    • (C) the amount included in computing the taxpayer’s income for the year as a consequence of a payment described in subparagraph 146(2)(b)(ii), and

    • (D) the amount, if any, by which

      • (I) the amount received by the taxpayer out of or under a registered retirement income fund under which the taxpayer is the annuitant and included because of subsection 146.3(5) in computing the taxpayer’s income for the year

      exceeds

      • (II) the amount, if any, by which the minimum amount (within the meaning assigned by subsection 146.3(1)) under the fund for the year exceeds the total of all amounts received out of or under the fund in the year by an individual who was an annuitant under the fund before the taxpayer became the annuitant under the fund and that were included because of subsection 146.3(5) in computing that individual’s income for the year, and

  • (vi) was not deducted in computing the taxpayer’s income for a preceding taxation year;

• (m) such amount in respect of payments to a registered disability savings plan as is permitted under section 60.02;

• Marginal note:Succession duties applicable to certain property

  (m.1) that proportion of any superannuation or pension benefit, death benefit, benefit under a registered retirement savings plan, benefit under a deferred profit sharing plan or benefit that is a payment under an income-averaging annuity contract, received by the taxpayer in the year, on or after the death of a predecessor, in payment of or on account of property to which the taxpayer is the successor, that

  • (i) such part of any succession duties payable under a law of a province in respect of the death of the predecessor as may reasonably be regarded as attributable to the property in payment of or on account of which the benefit was so received,

  is of

  • (ii) the value of the property in payment of or on account of which the benefit was so received, as computed for the purposes of the law referred to in subparagraph 60(m.1)(i);

• Marginal note:Repayment of pension or benefits

  (n) any amount paid by the taxpayer in the year as a repayment (otherwise than because of Part VII of the Employment Insurance Act or section 8 of the Canada Recovery Benefits Act) of any of the following amounts to the extent that the amount was included in computing the taxpayer’s income, and not deducted in computing the taxpayer’s taxable income, for the year or for a preceding taxation year, namely,

  • (i) a pension described in clause 56(1)(a)(i)(A),

  • (ii) a benefit described in clause 56(1)(a)(i)(B),

  • (iii) an amount described in subparagraph 56(1)(a)(ii),

  • (iv) a benefit described in subparagraph 56(1)(a)(iv),

  • (v) a benefit described in subparagraph 56(1)(a)(vi),

  • (v.1) a benefit described in subparagraph 56(1)(a)(vii), and

  • (vi) an amount described in paragraph 56(1)(r);

• Marginal note:Repayment of pension benefits

  (n.1) an amount paid by the taxpayer in the year to a pooled registered pension plan or registered pension plan if

  • (i) the taxpayer is an individual,

  • (ii) the amount is paid as

    • (A) a repayment of an amount received from the plan that was included in computing the taxpayer’s income for the year or a preceding year, if

      • (I) it is reasonable to consider that the amount was paid under the plan as a consequence of an error and not as an entitlement to benefits, or

      • (II) it was subsequently determined that, as a consequence of a settlement of a dispute in respect of the taxpayer’s employment, the taxpayer was not entitled to the amount, or

    • (B) interest in respect of a repayment described in clause (A), and

  • (iii) no portion of the amount is deductible under any of paragraph 8(1)(m) and subsections 146(5) to (5.2) in computing the taxpayer’s income for the year;

• Marginal note:Amounts repaid in subsequent years

  (n.2) any amount paid by the taxpayer in a year (in this paragraph referred to as the “subsequent year”) that is after the year as a repayment of an amount that was included in computing the taxpayer’s income for the year under any of subparagraphs 56(1)(a)(i), (ii), (iv), (vi) or (vii) or paragraph 56(1)(r), to the extent that the amount paid

  • (i) exceeds the taxpayer’s taxable income for the subsequent year (determined without reference to paragraphs (n), (n.1) and (v.1)), and

  • (ii) is not deducted in computing the taxpayer’s taxable income for any other taxation year;

• Marginal note:Legal Expenses

  (o) amounts paid by the taxpayer in the year in respect of fees or expenses incurred in preparing, instituting or prosecuting an objection to, or an appeal in relation to,

  • (i) an assessment of tax, interest or penalties under this Act or an Act of a province that imposes a tax similar to the tax imposed under this Act,

  • (ii) a decision of the Canada Employment Insurance Commission under the Employment Insurance Act or to an appeal of such a decision to the Social Security Tribunal,

  • (iii) an assessment of any income tax deductible by the taxpayer under section 126 or any interest or penalty with respect thereto, or

  • (iv) an assessment or a decision made under the Canada Pension Plan or a provincial pension plan as defined in section 3 of that Act;

• Marginal note:Idem

  (o.1) the amount, if any, by which the lesser of

  • (i) the total of all legal expenses (other than those relating to a division or settlement of property arising out of, or on a breakdown of, a marriage or common-law partnership) paid by the taxpayer in the year or in any of the 7 preceding taxation years to collect or establish a right to an amount of

    • (A) a benefit under a pension fund or plan (other than a benefit under the Canada Pension Plan or a provincial pension plan as defined in section 3 of that Act) in respect of the employment of the taxpayer or a deceased individual of whom the taxpayer was a dependant, relation or legal representative, or

    • (B) a retiring allowance of the taxpayer or a deceased individual of whom the taxpayer was a dependant, relation or legal representative, and

  • (ii) the amount, if any, by which the total of all amounts each of which is

    • (A) an amount described in clause 60(o.1)(i)(A) or 60(o.1)(i)(B)

      • (I) that is received after 1985,

      • (II) in respect of which legal expenses described in subparagraph 60(o.1)(i) were paid, and

      • (III) that is included in computing the income of the taxpayer for the year or a preceding taxation year, or

    • (B) an amount included in computing the income of the taxpayer under paragraph 56(1)(l.1) for the year or a preceding taxation year,

    exceeds the total of all amounts each of which is an amount deducted under paragraph 60(j), 60(j.01), 60(j.1) or 60(j.2) in computing the income of the taxpayer for the year or a preceding taxation year, to the extent that the amount may reasonably be considered to have been deductible as a consequence of the receipt of an amount referred to in clause 60(o.1)(ii)(A),

  exceeds

  • (iii) the portion of the total described in subparagraph 60(o.1)(i) in respect of the taxpayer that may reasonably be considered to have been deductible under this paragraph in computing the income of the taxpayer for a preceding taxation year;

• Marginal note:Repayment of apprenticeship grants

  (p) the total of all amounts each of which is an amount paid in the taxation year as a repayment under the Apprenticeship Incentive Grant program or the Apprenticeship Completion Grant program of an amount that was included under paragraph 56(1)(n.1) in computing the taxpayer’s income for the taxation year or a preceding taxation year;

• Marginal note:Refund of income payments

  (q) where the taxpayer is an individual, an amount paid by the taxpayer in the year to a person with whom the taxpayer was dealing at arm’s length (in this paragraph referred to as the “payer”) if

  • (i) the amount has been included in computing the income of the taxpayer for the year or a preceding taxation year as an amount described in subparagraph 56(1)(n)(i) or paragraph 56(1)(o) paid to the taxpayer by the payer,

  • (ii) at the time the amount was paid by the payer to the taxpayer a condition was stipulated for the taxpayer to fulfil,

  • (iii) as a result of the failure of the taxpayer to fulfil the condition referred to in subparagraph 60(q(ii) the taxpayer was required to repay the amount to the payer,

  • (iv) during the period for which the amount referred to in subparagraph 60(q(i) was paid the taxpayer did not provide other than occasional services to the payer as an officer or under a contract of employment, and

  • (v) the amount was paid to the taxpayer for the purpose of enabling the taxpayer to further the taxpayer’s education;

• (r) [Repealed, 2024, c. 17, s. 13]

• Marginal note:Repayment of policy loan

  (s) the total of all repayments made by the taxpayer in the year in respect of a policy loan (within the meaning assigned by subsection 148(9)) made under a life insurance policy, not exceeding the amount, if any, by which

  • (i) the total of all amounts required by subsection 148(1) to be included in computing the taxpayer’s income for the year or a preceding taxation year from a disposition described in paragraph (b) of the definition disposition in subsection 148(9) in respect of that policy

  exceeds

  • (ii) the total of all repayments made by the taxpayer in respect of the policy loan that were deductible in computing the taxpayer’s income for a preceding taxation year;

• Marginal note:RCA distributions

  (t) where an amount in respect of a particular retirement compensation arrangement is required by paragraph 56(1)(x) or 56(1)(z) or subsection 70(2) to be included in computing the taxpayer’s income for the year, an amount equal to the lesser of

  • (i) the total of all amounts in respect of the particular arrangement so required to be included in computing the taxpayer’s income for the year, and

  • (ii) the amount, if any, by which the total of all amounts each of which is

    • (A) an amount (other than an amount deductible under paragraph 8(1)(m.2) or transferred to the particular arrangement under circumstances in which subsection 207.6(7) applies) contributed under the particular arrangement by the taxpayer while it was a retirement compensation arrangement and before the end of the year,

    • (A.1) an amount transferred in respect of the taxpayer before the end of the year to the particular arrangement from another retirement compensation arrangement under circumstances in which subsection 207.6(7) applies, to the extent that the amount would have been deductible under this paragraph in respect of the other arrangement in computing the taxpayer’s income if it had been received by the taxpayer out of the other arrangement,

    • (B) an amount paid by the taxpayer before the end of the year and at a time when the taxpayer was resident in Canada to acquire an interest in the particular arrangement, or

    • (C) an amount that was received or became receivable by the taxpayer before the end of the year and at a time when the taxpayer was resident in Canada as proceeds from the disposition of an interest in the particular arrangement,

    exceeds the total of all amounts each of which is

    • (D) an amount deducted under this paragraph or paragraph 60(u) in respect of the particular arrangement in computing the taxpayer’s income for a preceding taxation year, or

    • (E) an amount transferred in respect of the taxpayer before the end of the year from the particular arrangement to another retirement compensation arrangement under circumstances in which subsection 207.6(7) applies, to the extent that the amount would have been deductible under this paragraph in respect of the particular arrangement in computing the taxpayer’s income if it had been received by the taxpayer out of the particular arrangement;

• Marginal note:RCA dispositions

  (u) where an amount in respect of a particular retirement compensation arrangement is required by paragraph 56(1)(y) to be included in computing the taxpayer’s income for the year, an amount equal to the lesser of

  • (i) the total of all amounts in respect of the particular arrangement so required to be included in computing the taxpayer’s income for the year, and

  • (ii) the amount, if any, by which the total of all amounts each of which is

    • (A) an amount (other than an amount deductible under paragraph 8(1)(m.2) or transferred to the particular arrangement under circumstances in which subsection 207.6(7) applies) contributed under the particular arrangement by the taxpayer while it was a retirement compensation arrangement and before the end of the year,

    • (A.1) an amount transferred in respect of the taxpayer before the end of the year to the particular arrangement from another retirement compensation arrangement under circumstances in which subsection 207.6(7) applies, to the extent that the amount would have been deductible under paragraph 60(t) in respect of the other arrangement in computing the taxpayer’s income if it had been received by the taxpayer out of the other arrangement, or

    • (B) an amount paid by the taxpayer before the end of the year and at a time when the taxpayer was resident in Canada to acquire an interest in the particular arrangement

    exceeds the total of all amounts each of which is

    • (C) an amount deducted under paragraph 60(t) in respect of the particular arrangement in computing the taxpayer’s income for the year or a preceding taxation year,

    • (D) an amount deducted under this paragraph in respect of the particular arrangement in computing the taxpayer’s income for a preceding taxation year, or

    • (E) an amount transferred in respect of the taxpayer before the end of the year from the particular arrangement to another retirement compensation arrangement under circumstances in which subsection 207.6(7) applies, to the extent that the amount would have been deductible under paragraph 60(t) in respect of the particular arrangement in computing the taxpayer’s income if it had been received by the taxpayer out of the particular arrangement;

• Marginal note:Repayment — parents of victims of crime

  (v) the total of all amounts each of which is an amount paid in the year as a repayment of a benefit that was included because of paragraph 56(1)(a.3) in computing the taxpayer’s income for the year or a preceding taxation year;

• Marginal note:EI benefit repayment

  (v.1) any benefit repayment payable by the taxpayer under Part VII of the Employment Insurance Act on or before April 30 of the following year, to the extent that the amount was not deductible in computing the taxpayer’s income for any preceding taxation year;

• Marginal note:Canada Recovery Benefit Repayment

  (v.2) any benefit repayment payable by the taxpayer under section 8 of the Canada Recovery Benefits Act on or before the taxpayer’s balance-due day for the taxation year, to the extent that the amount was not deductible in computing the taxpayer’s income for any preceding taxation year;

• Marginal note:COVID-19 – other benefit repayments

  (v.3) any benefit repaid by the taxpayer before 2023 to the extent that the amount of the benefit was included in computing the taxpayer’s income for the year under any of clauses 56(1)(r)(iv.1)(A) to (D), except to the extent that the amount is

  • (i) deducted in computing the taxpayer’s income for any year under paragraph (n), or

  • (ii) deductible in computing the taxpayer’s income for any year under paragraph (v.2);

• Marginal note:Tax under Part I.2

  (w) the amount of the taxpayer’s tax payable under Part I.2 for the year;

• Marginal note:Repayment under Canada Education Savings Act

  (x) the total of all amounts each of which is an amount paid by the taxpayer in the year as a repayment, under the Canada Education Savings Act or under a designated provincial program (as defined in subsection 146.1(1)), of an amount that was included because of subsection 146.1(7) in computing the taxpayer’s income for the year or a preceding taxation year;

• Marginal note:Repayment of UCCB

  (y) the total of all amounts each of which is an amount paid in the taxation year as a repayment, under the Universal Child Care Benefit Act, of a benefit that was included because of subsection 56(6) in computing the taxpayer’s income for the taxation year or a preceding taxation year;

• Marginal note:Repayment under the Canada Disability Savings Act

  (z) the total of all amounts each of which is an amount paid in the taxation year as a repayment, under or because of the Canada Disability Savings Act or a designated provincial program as defined in subsection 146.4(1), of an amount that was included because of section 146.4 in computing the taxpayer’s income for the taxation year or a preceding taxation year; and

• Marginal note:Tax informant program

  (z.1) the total of all amounts each of which is an amount paid in the year as a repayment of an amount that was included, because of paragraph 56(1)(z.4), in computing the taxpayer’s income for the year or a preceding taxation year.