Income Tax Act

Marginal note:Losses deductible

• 111 (1) For the purpose of computing the taxable income of a taxpayer for a taxation year, there may be deducted such portion as the taxpayer may claim of the taxpayer’s

  • Marginal note:Non-capital losses

    (a) non-capital losses for the 20 taxation years immediately preceding and the 3 taxation years immediately following the year;

  • Marginal note:Net capital losses

    (b) net capital losses for taxation years preceding and the three taxation years immediately following the year;

  • Marginal note:Restricted farm losses

    (c) restricted farm losses for the 20 taxation years immediately preceding and the 3 taxation years immediately following the year, but no amount is deductible for the year in respect of restricted farm losses except to the extent of the taxpayer’s incomes for the year from all farming businesses carried on by the taxpayer;

  • Marginal note:Farm losses

    (d) farm losses for the 20 taxation years immediately preceding and the 3 taxation years immediately following the year; and

  • Marginal note:Limited partnership losses

    (e) limited partnership losses in respect of a partnership for taxation years preceding the year, but no amount is deductible for the year in respect of a limited partnership loss except to the extent of the amount by which

    • (i) the taxpayer’s at-risk amount in respect of the partnership (within the meaning assigned by subsection 96(2.2)) at the end of the last fiscal period of the partnership ending in the taxation year

    exceeds

    • (ii) the total of all amounts each of which is

      • (A) the amount required by subsection 127(8) in respect of the partnership to be added in computing the investment tax credit of the taxpayer for the taxation year,

      • (B) the taxpayer’s share of any losses of the partnership for that fiscal period from a business or property, or

      • (C) the taxpayer’s share of

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

        • (II) the Canadian exploration expense, if any, incurred by the partnership in that fiscal period,

        • (III) the Canadian development expense, if any, incurred by the partnership in that fiscal period, and

        • (IV) the Canadian oil and gas property expense, if any, incurred by the partnership in that fiscal period.

• Marginal note:Net capital losses

  (1.1) Notwithstanding paragraph 111(1)(b), the amount that may be deducted under that paragraph in computing a taxpayer’s taxable income for a particular taxation year is the total of

  • (a) the lesser of

    • (i) the amount, if any, determined under paragraph 3(b) in respect of the taxpayer for the particular year, and

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

      A × B/C

      where

      A

      is the amount claimed under paragraph 111(1)(b) for the particular year by the taxpayer in respect of a net capital loss for a taxation year (in this paragraph referred to as the “loss year”),

      B

      is the fraction that would be used for the particular year under section 38 in respect of the taxpayer if the taxpayer had a capital loss for the particular year, and

      C

      is the fraction required to be used under section 38 in respect of the taxpayer for the loss year;

  • (b) where the taxpayer is an individual, the least of

    • (i) $2,000,

    • (ii) the taxpayer’s pre-1986 capital loss balance for the particular year, and

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

      • (A) the amount claimed under paragraph 111(1)(b) in respect of the taxpayer’s net capital losses for the particular year

      exceeds

      • (B) the total of the amounts in respect of the taxpayer’s net capital losses that, using the formula in subparagraph 111(1.1)(a)(ii), would be required to be claimed under paragraph 111(1)(b) for the particular year to produce the amount determined under paragraph 111(1.1)(a) for the particular year; and

  • (c) the amount, if any, that the Minister determines to be reasonable in the circumstances for the particular year and after considering the application to the taxpayer of subsections 104(21.6), 130.1(4), 131(1) and 138.1(3.2) as they read in their application to the taxpayer’s last taxation year that began before November 2011.

• Marginal note:Year of death

  (2) Where a taxpayer dies in a taxation year, for the purpose of computing the taxpayer’s taxable income for that year and the immediately preceding taxation year, the following rules apply:

  • (a) paragraph 111(1)(b) shall be read as follows:

    • “111(1)(b) the taxpayer’s net capital losses for all taxation years not claimed for the purpose of computing the taxpayer’s taxable income for any other taxation year;”; and

  • (b) paragraph 111(1.1)(b) shall be read as follows:

    • “111(1.1)(b) the amount, if any, by which

      • (i) the amount claimed under paragraph 111(1)(b) in respect of the taxpayer’s net capital losses for the particular year

      exceeds the total of

      • (ii) all amounts in respect of the taxpayer’s net capital losses that, using the formula in subparagraph 111(2)(a)(ii), would be required to be claimed under paragraph 111(1)(b) for the particular year to produce the amount determined under paragraph 111(2)(a) for the particular year, and

      • (iii) all amounts each of which is an amount deducted under section 110.6 in computing the taxpayer’s taxable income for a taxation year, except to the extent that, where the particular year is the year in which the taxpayer died, the amount, if any, by which the amount determined under subparagraph 111(2)(b)(i) in respect of the taxpayer for the immediately preceding taxation year exceeds the amount so determined under subparagraph 111(2)(b)(ii).”

• Marginal note:Limitation on deductibility

  (3) For the purposes of subsection 111(1),

  • (a) an amount in respect of a non-capital loss, restricted farm loss, farm loss or limited partnership loss, as the case may be, for a taxation year is deductible, and an amount in respect of a net capital loss for a taxation year may be claimed, in computing the taxable income of a taxpayer for a particular taxation year only to the extent that it exceeds the total of

    • (i) amounts deducted under this section in respect of that non-capital loss, restricted farm loss, farm loss or limited partnership loss in computing taxable income for taxation years preceding the particular taxation year,

    • (i.1) the amount that was claimed under paragraph 111(1)(b) in respect of that net capital loss for taxation years preceding the particular taxation year, and

    • (ii) amounts claimed in respect of that loss under paragraph 186(1)(c) for the year in which the loss was incurred or under paragraph 186(1)(d) for the particular taxation year and taxation years preceding the particular taxation year, and

  • (b) no amount is deductible in respect of a non-capital loss, net capital loss, restricted farm loss, farm loss or limited partnership loss, as the case may be, for a taxation year until

    • (i) in the case of a non-capital loss, the deductible non-capital losses,

    • (ii) in the case of a net capital loss, the deductible net capital losses,

    • (iii) in the case of a restricted farm loss, the deductible restricted farm losses,

    • (iv) in the case of a farm loss, the deductible farm losses, and

    • (v) in the case of a limited partnership loss, the deductible limited partnership losses,

    for preceding taxation years have been deducted.

• Marginal note:Acquisition of control

  (4) Notwithstanding subsection 111(1), where, at any time (in this subsection referred to as “that time”), control of a corporation has been acquired by a person or group of persons

  • (a) no amount in respect of a net capital loss for a taxation year ending before that time is deductible in computing the corporation’s taxable income for a taxation year ending after that time, and

  • (b) no amount in respect of a net capital loss for a taxation year ending after that time is deductible in computing the corporation’s taxable income for a taxation year ending before that time,

  and where, at that time, the corporation neither became nor ceased to be exempt from tax under this Part on its taxable income,

  • (c) in computing the adjusted cost base to the corporation at and after that time of each capital property, other than a depreciable property, owned by the corporation immediately before that time, there shall be deducted the amount, if any, by which the adjusted cost base to the corporation of the property immediately before that time exceeds its fair market value immediately before that time,

  • (d) each amount required by paragraph 111(4)(c) to be deducted in computing the adjusted cost base to the corporation of a property shall be deemed to be a capital loss of the corporation for the taxation year that ended immediately before that time from the disposition of the property,

  • (e) each capital property owned by the corporation immediately before that time (other than a property in respect of which an amount would, but for this paragraph, be required by paragraph (c) to be deducted in computing its adjusted cost base to the corporation or a depreciable property of a prescribed class to which, but for this paragraph, subsection (5.1) would apply) as is designated by the corporation in its return of income under this Part for the taxation year that ended immediately before that time or in a prescribed form filed with the Minister on or before the day that is 90 days after the day on which a notice of assessment of tax payable for the year or notification that no tax is payable for the year is sent to the corporation, is deemed to have been disposed of by the corporation immediately before the time that is immediately before that time for proceeds of disposition equal to the lesser of

    • (i) the fair market value of the property immediately before that time, and

    • (ii) the greater of the adjusted cost base to the corporation of the property immediately before the disposition and such amount as is designated by the corporation in respect of the property,

    and shall be deemed to have been reacquired by it at that time at a cost equal to the proceeds of disposition thereof, except that, where the property is depreciable property of the corporation the capital cost of which to the corporation immediately before the disposition time exceeds those proceeds of disposition, for the purposes of sections 13 and 20 and any regulations made for the purpose of paragraph 20(1)(a),

    • (iii) the capital cost of the property to the corporation at that time shall be deemed to be the amount that was its capital cost immediately before the disposition, and

    • (iv) the excess shall be deemed to have been allowed to the corporation in respect of the property under regulations made for the purpose of paragraph 20(1)(a) in computing its income for taxation years ending before that time, and

  • (f) each amount that by virtue of paragraph 111(4)(d) or 111(4)(e) is a capital loss or gain of the corporation from a disposition of a property for the taxation year that ended immediately before that time shall, for the purposes of the definition capital dividend account in subsection 89(1), be deemed to be a capital loss or gain, as the case may be, of the corporation from the disposition of the property immediately before the time that a capital property of the corporation in respect of which paragraph 111(4)(e) would be applicable would be deemed by that paragraph to have been disposed of by the corporation.

• Marginal note:Idem

  (5) Where, at any time, control of a corporation has been acquired by a person or group of persons, no amount in respect of its non-capital loss or farm loss for a taxation year ending before that time is deductible by the corporation for a taxation year ending after that time and no amount in respect of its non-capital loss or farm loss for a taxation year ending after that time is deductible by the corporation for a taxation year ending before that time except that

  • (a) such portion of the corporation’s non-capital loss or farm loss, as the case may be, for a taxation year ending before that time as may reasonably be regarded as its loss from carrying on a business and, where a business was carried on by the corporation in that year, such portion of the non-capital loss as may reasonably be regarded as being in respect of an amount deductible under paragraph 110(1)(k) in computing its taxable income for the year is deductible by the corporation for a particular taxation year ending after that time

    • (i) only if that business was carried on by the corporation for profit or with a reasonable expectation of profit throughout the particular year, and

    • (ii) only to the extent of the total of the corporation’s income for the particular year from that business and, where properties were sold, leased, rented or developed or services rendered in the course of carrying on that business before that time, from any other business substantially all the income of which was derived from the sale, leasing, rental or development, as the case may be, of similar properties or the rendering of similar services; and

  • (b) such portion of the corporation’s non-capital loss or farm loss, as the case may be, for a taxation year ending after that time as may reasonably be regarded as its loss from carrying on a business and, where a business was carried on by the corporation in that year, such portion of the non-capital loss as may reasonably be regarded as being in respect of an amount deductible under paragraph 110(1)(k) in computing its taxable income for the year is deductible by the corporation for a particular year ending before that time

    • (i) only if throughout the taxation year and in the particular year that business was carried on by the corporation for profit or with a reasonable expectation of profit, and

    • (ii) only to the extent of the corporation’s income for the particular year from that business and, where properties were sold, leased, rented or developed or services rendered in the course of carrying on that business before that time, from any other business substantially all the income of which was derived from the sale, leasing, rental or development, as the case may be, of similar properties or the rendering of similar services.

• Marginal note:Computation of undepreciated capital cost

  (5.1) Where, at any time, control of a corporation (other than a corporation that at that time became or ceased to be exempt from tax under this Part on its taxable income) has been acquired by a person or group of persons and, if this Act were read without reference to subsection 13(24), the undepreciated capital cost to the corporation of depreciable property of a prescribed class immediately before that time would have exceeded the total of

  • (a) the fair market value of all the property of that class immediately before that time, and

  • (b) the amount in respect of property of that class otherwise allowed under regulations made under paragraph 20(1)(a) or deductible under subsection 20(16) in computing the corporation’s income for the taxation year ending immediately before that time,

  the excess shall be deducted in computing the income of the corporation for the taxation year ending immediately before that time and shall be deemed to have been allowed in respect of property of that class under regulations made under paragraph 20(1)(a).

• Marginal note:Computation of cumulative eligible capital

  (5.2) Where, at any time, control of a corporation (other than a corporation that at that time became or ceased to be exempt from tax under this Part on its taxable income) has been acquired by a person or group of persons and immediately before that time the corporation’s cumulative eligible capital in respect of a business exceeded the total of

  • (a) 3/4 of the fair market value of the eligible capital property in respect of the business, and

  • (b) the amount otherwise deducted under paragraph 20(1)(b) in computing the corporation’s income from the business for the taxation year ending immediately before that time,

  the excess shall be deducted under paragraph 20(1)(b) in computing the corporation’s income from the business for the taxation year ending immediately before that time.

• Marginal note:Doubtful debts and bad debts

  (5.3) Where, at any time, control of a corporation (other than a corporation that at that time became or ceased to be exempt from tax under this Part on its taxable income) has been acquired by a person or group of persons, no amount may be deducted under paragraph 20(1)(l) in computing the corporation’s income for its taxation year ending immediately before that time and each amount that is the greatest amount that would, but for this subsection and subsection 26(2) of this Act and subsection 33(1) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, have been deductible under paragraph 20(1)(l) in respect of a debt owing to the corporation immediately before that time shall be deemed to be a separate debt and shall, notwithstanding any other provision of this Act, be deducted as a bad debt under paragraph 20(1)(p) in computing the corporation’s income for the year and the amount by which the debt exceeds that separate debt shall be deemed to be a separate debt incurred at the same time and under the same circumstances as the debt was incurred.

• Marginal note:Non-capital loss

  (5.4) Where, at any time, control of a corporation has been acquired by a person or persons, such portion of the corporation’s non-capital loss for a taxation year ending before that time as

  • 111(5.4)(a) was not deductible in computing the corporation’s income for a taxation year ending before that time, and

  • (b) can reasonably be considered to be a non-capital loss of a subsidiary corporation (in this subsection referred to as the “former subsidiary corporation”) from carrying on a particular business (in this subsection referred to as the “former subsidiary corporation’s loss business”) that was deemed by subsection 88(1.1) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, as it read on November 12, 1981 to be the non-capital loss of the corporation for the taxation year of the corporation in which the former subsidiary corporation’s loss year ended

  shall be deemed to be a non-capital loss of the corporation from carrying on the former subsidiary corporation’s loss business.

• Marginal note:Restriction

  (5.5) Where control of a corporation has been acquired by a person or group of persons and it may reasonably be considered that the main reason for the acquisition of control was to cause paragraph 111(4)(d) or subsection 111(5.1), 111(5.2) or 111(5.3) to apply with respect to the acquisition,

  • (a) that provision and paragraph 111(4)(e), and

  • (b) where that provision is paragraph 111(4)(d), paragraph 111(4)(c)

  shall not apply with respect to the acquisition.

• Marginal note:Limitation

  (6) For the purposes of this section and paragraph 53(1)(i), any loss of a taxpayer for a taxation year from a farming business shall, after the taxpayer disposes of the land used in that farming business and to the extent that the amount of the loss is required by paragraph 53(1)(i) to be added in computing the adjusted cost base to the taxpayer of the land immediately before the disposition, be deemed not to be a loss.

• Marginal note:Idem

  (7) For the purposes of this section, any loss of a taxpayer for a taxation year from a farming business shall, to the extent that the loss is included in the amount of any deduction permitted by section 101 in computing the taxpayer’s income for any subsequent taxation year, be deemed not to be a loss of the taxpayer for the purpose of computing the taxpayer’s taxable income for that subsequent year or any taxation year subsequent thereto.

• (7.1) to (7.2) [Repealed, 2013, c. 34, s. 241]

• Marginal note:Non-capital losses of employee life and health trusts

  (7.3) Paragraph (1)(a) does not apply in computing the taxable income of a trust for a taxation year if the trust is, in the year, an employee life and health trust.

• Marginal note:Non-capital losses of employee life and health trusts

  (7.4) For the purposes of computing the taxable income of an employee life and health trust for a taxation year, there may be deducted such portion as the trust may claim of the trust’s non-capital losses for the three taxation years immediately preceding and the three taxation years immediately following the year.

• Marginal note:Non-capital losses of employee life and health trusts

  (7.5) Notwithstanding paragraph (1)(a) and subsection (7.4), no amount in respect of the trust’s non-capital losses for a taxation year in which the trust was an employee life and health trust may be deducted in computing the trust’s taxable income for another taxation year (referred to in this subsection as the “specified year”) if

  • (a) the trust was not an employee life and health trust for the specified year; or

  • (b) the trust is an employee life and health trust that, because of the application of subsection 144.1(3), is not permitted to deduct any amount under subsection 104(6) for the specified year.

• Marginal note:Definitions

  (8) In this section,

  exchange rate

  taux de change

  exchange rate at any time in respect of a currency of a country other than Canada means the rate of exchange between that currency and Canadian currency quoted by the Bank of Canada at noon on the day that includes that time or, if that day is not a business day, on the day that immediately precedes that day, or a rate of exchange acceptable to the Minister; (taux de change)

  farm loss

  perte agricole

  farm loss of a taxpayer for a taxation year means the amount determined by the formula

  A - C

  where

  A

  is the lesser of

  • (a) the amount, if any, by which

    • (i) the total of all amounts each of which is the taxpayer’s loss for the year from a farming or fishing business

    exceeds

    • (ii) the total of all amounts each of which is the taxpayer’s income for the year from a farming or fishing business, and

  • (b) the amount that would be the taxpayer’s non-capital loss for the year if each of the amounts determined for C and D in the definition non-capital loss in this subsection were zero, and

  B

  [Repealed, 2000, c. 19, s. 19(2)]

  C

  is the total of all amounts by which the farm loss of the taxpayer for the year is required to be reduced because of section 80;

  foreign currency debt

  dette en monnaie étrangère

  foreign currency debt means a debt obligation denominated in a currency of a country other than Canada; (dette en monnaie étrangère)

  net capital loss

  perte en capital nette

  net capital loss of a taxpayer for a taxation year means the amount determined by the formula

  A - B + C - D

  where

  A

  is the amount, if any, determined under subparagraph 3(b)(ii) in respect of the taxpayer for the year,

  B

  is the lesser of the total determined under subparagraph 3(b)(i) in respect of the taxpayer for the year and the amount determined for A in respect of the taxpayer for the year,

  C

  is the least of

  • (a) the amount of the allowable business investment losses of the taxpayer for the taxpayer’s tenth preceding taxation year,

  • (b) the amount, if any, by which the amount of the non-capital loss of the taxpayer for the taxpayer’s tenth preceding taxation year exceeds the total of all amounts in respect of that non-capital loss deducted in computing the taxpayer’s taxable income or claimed by the taxpayer under paragraph 186(1)(c) or (d) for the year or for any preceding taxation year, and

  • (c) if the taxpayer is a corporation the control of which was acquired by a person or group of persons before the end of the year and after the end of the taxpayer’s tenth preceding taxation year, nil, and

  D

  is the total of all amounts by which the net capital loss of the taxpayer for the year is required to be reduced because of section 80;

  non-capital loss

  perte autre qu’une perte en capital

  non-capital loss of a taxpayer for a taxation year means, at any time, the amount determined by the formula

  (A + B) - (D + D.1 + D.2)

  where

  A

  is the amount determined by the formula

  E - F

  where

  E

  is the total of all amounts each of which is

  • (a) the taxpayer’s loss for the year from an office, employment, business or property,

  • (a.1) an amount deductible under paragraph 104(6)(a.4) in computing the taxpayer’s income for the year,

  • (b) an amount deducted under paragraph (1)(b) or section 110.6, or deductible under any of paragraphs 110(1)(d) to (d.3), (f), (g), (j) and (k), section 112 and subsections 113(1) and 138(6), in computing the taxpayer’s taxable income for the year, or

  • (c) if that time is before the taxpayer’s eleventh following taxation year, the taxpayer’s allowable business investment loss for the year, and

  F

  is the amount determined under paragraph 3(c) in respect of the taxpayer for the year,

  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),

  C

  [Repealed, 2000, c. 19, s. 19(4)]

  D

  is the amount that would be the taxpayer’s farm loss for the year if the amount determined for B in the definition farm loss in this subsection were zero,

  D.1

  is the total of all amounts deducted under subsection 111(10) in respect of the taxpayer for the year, and

  D.2

  is the total of all amounts by which the non-capital loss of the taxpayer for the year is required to be reduced because of section 80;

  pre-1986 capital loss balance

  solde des pertes en capital subies avant 1986

  pre-1986 capital loss balance of an individual for a particular taxation year means the amount determined by the formula

  (A + B) - (C + D + E + E.1)

  where

  A

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

  F - G

  where

  F

  is the individual’s net capital loss for a taxation year ending before 1985, and

  G

  is the total of all amounts claimed under this section by the individual in respect of that loss in computing the individual’s taxable income for taxation years preceding the particular taxation year, and

  B

  is the amount determined by the formula

  H - I

  where

  H

  is the lesser of

  • (a) the amount of the individual’s net capital loss for the 1985 taxation year, and

  • (b) the amount, if any, by which the amount determined under subparagraph 3(e)(ii) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, in respect of the individual for the 1985 taxation year exceeds the amount deductible by reason of paragraph 3(e) of that Act in computing the individual’s taxable income for the 1985 taxation year, andI is the total of all amounts claimed under this section by the individual in respect of the individual’s net capital loss for the 1985 taxation year in computing the individual’s taxable income for taxation years preceding the particular taxation year, and

  I

  is the total of all amounts claimed under this section by the individual in respect of the individual’s net capital loss for the 1985 taxation year in computing the individual’s taxable income for taxation years preceding the particular taxation year,

  C

  is the total of all amounts deducted under section 110.6 in computing the individual’s taxable income for taxation years that ended before 1988 or begin 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.

• Marginal note:Exception

  (9) In this section, a taxpayer’s non-capital loss, net capital loss, restricted farm loss, farm loss and limited partnership loss for a taxation year during which the taxpayer was not resident in Canada shall be determined as if

  • (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

  • (b) throughout the year, in any other case,

  the taxpayer had no income other than income described in any of subparagraphs 115(1)(a)(i) to (vi), the taxpayer’s only taxable capital gains, allowable capital losses and allowable business investment losses were from dispositions of taxable Canadian property (other than treaty-protected property) and the taxpayer’s only other losses were losses from the duties of an office or employment performed by the taxpayer in Canada and businesses (other than treaty-protected businesses) carried on by the taxpayer in Canada.

• Marginal note:Fuel tax rebate loss abatement

  (10) Where in a particular taxation year a taxpayer received an amount (in this subsection referred to as a “rebate”) as a fuel tax rebate under subsection 68.4(2) or (3.1) of the Excise Tax Act, in computing the taxpayer’s non-capital loss for a taxation year (in this subsection referred to as the “loss year”) that is one of the 7 taxation years preceding the particular year, there shall be deducted the lesser of

  • (a) the amount determined by the formula

    10(A - B) - C

    where

    A

    is the total of all rebates received by the taxpayer in the particular year,

    B

    is the total of all amounts, in respect of rebates received by the taxpayer in the particular year, repaid by the taxpayer under subsection 68.4(7) of that Act, and

    C

    is the total of all amounts, in respect of rebates received in the particular year, deducted under this subsection in computing the taxpayer’s non-capital losses for other taxation years; and

  • (b) such amount as the taxpayer claims, not exceeding the portion of the taxpayer’s non-capital loss for the loss year (determined without reference to this subsection) that would be deductible in computing the taxpayer’s taxable income for the particular year if the taxpayer had sufficient income for the particular year from businesses carried on by the taxpayer in the particular year.

• Marginal note:Fuel tax rebate — partnerships

  (11) Where a taxpayer was a member of a partnership at any time in a fiscal period of the partnership during which it received a fuel tax rebate under subsection 68.4(2), (3) or (3.1) of the Excise Tax Act, the taxpayer is deemed

  • (a) to have received at that time as a rebate under subsection 68.4(2), 68.4(3) or 68.4(3.1), as the case may be, of that Act an amount equal to that proportion of the amount of the rebate received by the partnership that the member’s share of the partnership’s income or loss for that fiscal period is of the whole of that income or loss, determined without reference to any rebate under section 68.4 of that Act; and

  • (b) to have paid as a repayment under subsection 68.4(7) of that Act an amount equal to that proportion of all amounts repaid under subsection 68.4(7) of that Act in respect of the rebate that the member’s share of the partnership’s income or loss for that fiscal period is of the whole of that income or loss, determined without reference to any rebate under section 68.4 of that Act.

• Marginal note:Foreign currency debt on acquisition of control

  (12) For the purposes of subsection (4), if at any time a corporation owes a foreign currency debt in respect of which the corporation would have had, if the foreign currency debt had been repaid at that time, a capital loss or gain, the corporation is deemed to own at the time (in this subsection referred to as the “measurement time”) that is immediately before that time a property

  • (a) the adjusted cost base of which at the measurement time is the amount determined by the formula

    A + B – C

    where

    A

    is the amount of principal owed by the corporation under the foreign currency debt at the measurement time, calculated, for greater certainty, using the exchange rate applicable at the measurement time,

    B

    is the portion of any gain, previously recognized in respect of the foreign currency debt because of this section, that is reasonably attributable to the amount described in A, and

    C

    is the portion of any capital loss previously recognized in respect of the foreign currency debt because of this section, that is reasonably attributable to the amount described in A; and

  • (b) the fair market value of which is the amount that would be the amount of the principal owed by the corporation under the foreign currency debt at the measurement time if that amount were calculated using the exchange rate applicable at the time of the original borrowing.