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Income Tax Regulations (C.R.C., c. 945)

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Regulations are current to 2024-02-20 and last amended on 2024-02-14. Previous Versions

PART XCIIFinancial Institutions — Disposition of Specified Debt Obligations (continued)

Special Rules for Residual Portion of Gain or Loss

Marginal note:Application

  •  (1) This section applies for the purposes of subparagraphs 142.4(4)(c)(ii) and (d)(ii) of the Act.

  • Marginal note:Winding-up

    (2) If subsection 88(1) of the Act has applied to the winding-up of a taxpayer (in this subsection referred to as the “subsidiary”), the following rules apply in respect of the residual portion of a gain or loss of the subsidiary from the disposition of a specified debt obligation to which subsection 142.4(4) of the Act applies:

    • (a) the amount of that residual portion allocated to the taxation year of the subsidiary in which its assets were distributed to its parent on the winding-up shall be determined on the assumption that the taxation year ended when the assets were distributed to its parent;

    • (b) no amount shall be allocated in respect of that residual portion to any taxation year of the subsidiary after its taxation year in which its assets were distributed to its parent; and

    • (c) the amount of that residual portion allocated to the taxation year of the parent in which the subsidiary’s assets were distributed to it shall be determined on the assumption that the taxation year began when the assets were distributed to it.

  • (2.1) [Repealed, SOR/2009-302, s. 12]

  • Marginal note:Transfer of an insurance business

    (3) No amount in respect of the residual portion of a gain or loss of an insurer from the disposition of a specified debt obligation to which subsection 142.4(4) of the Act applies shall be allocated to any taxation year of the insurer that ends after the insurer ceased to carry on all or substantially all of an insurance business, if

    • (a) subsection 138(11.5) or (11.94) of the Act has applied to the transfer of that business; and

    • (b) the person to whom that business was transferred is considered, because of paragraph 138(11.5)(k) of the Act, to be the same person as the insurer in respect of that residual portion.

  • Marginal note:Transfer to new partnership

    (4) If subsection 98(6) of the Act deems a partnership (in this subsection referred to as the “new partnership”) to be a continuation of another partnership (in this subsection referred to as the “predecessor partnership”), the following rules apply in respect of the residual portion of a gain or loss of the predecessor partnership from the disposition of a specified debt obligation to which subsection 142.4(4) of the Act applies:

    • (a) the amount of that residual portion allocated to the taxation year of the predecessor partnership in which its property was transferred to the new partnership shall be determined on the assumption that the taxation year ended when the property was transferred;

    • (b) no amount shall be allocated in respect of that residual portion to any taxation year of the predecessor partnership after its taxation year in which its property was transferred to the new partnership; and

    • (c) the amount of that residual portion allocated to the taxation year of the new partnership in which the predecessor partnership’s property was transferred to it shall be determined on the assumption that the taxation year began when the property was transferred to it.

  • Marginal note:Ceasing to carry on business

    (5) There shall be allocated to a particular taxation year of a taxpayer the part, if any, of the residual portion of the taxpayer’s gain or loss that is from a disposition of a specified debt obligation to which subsection 142.4(4) of the Act applies and that was not allocated to a preceding taxation year, if

    • (a) at any time in the particular taxation year the taxpayer ceases to carry on all or substantially all of a business, otherwise than as a result of a merger to which subsection 87(2) of the Act applies, a winding-up to which subsection 88(1) of the Act applies or a transfer of the business to which subsection 98(6) or 138(11.5) or (11.94) of the Act applies;

    • (b) the disposition occurred before that time; and

    • (c) the specified debt obligation was property used in the business.

  • Marginal note:Non-resident taxpayer

    (5.1) For the purpose of subsection (5), a non-resident taxpayer is considered to cease to carry on all or substantially all of a business if the taxpayer ceases to carry on, or ceases to carry on in Canada, all or substantially all of the part of the business that was carried on in Canada.

  • Marginal note:Ceasing to be a financial institution

    (6) There shall be allocated to a particular taxation year of a taxpayer the part, if any, of the residual portion of the taxpayer’s gain or loss that is from a disposition of a specified debt obligation to which subsection 142.4(4) of the Act applies and that was not allocated to a preceding taxation year, if

    • (a) the particular taxation year ends immediately before the time at which the taxpayer ceases to be a financial institution, otherwise than because it has ceased to carry on a business; and

    • (b) the disposition occurred before that time.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • SOR/2009-222, s. 7
  • SOR/2009-302, s. 12

PART XCIIIFilm or Video Production Services Tax Credit

Accredited Production

  •  (1) Subject to subsection (2), for the purpose of section 125.5 of the Act, accredited production means

    • (a) a film or video production in respect of which the aggregate expenditures, included in the cost of the production, in the period that ends 24 months after the time that the principal filming or taping of the production began, exceeds $1,000,000; and

    • (b) a film or video production that is part of a series of television productions that has two or more episodes, or is a pilot programme for such a series of episodes, in respect of which the aggregate expenditures included in the cost of each episode in the period that ends 24 months after the time that the principal filming or taping of the production began exceeds

      • (i) in the case of an episode whose running time is less than 30 minutes, $100,000, and

      • (ii) in any other case, $200,000.

  • (1.1) The references to “24 months” in paragraphs 9300(1)(a) and (b) are to be read as references to “36 months” in respect of film or video productions for which the Canadian labour expenditure of the corporation in respect of the production for the taxation years ending in 2020 or 2021 was greater than nil.

  • (2) An accredited production does not include a production that is any of the following:

    • (a) news, current events or public affairs programming, or a programme that includes weather or market reports;

    • (b) a talk show;

    • (c) a production in respect of a game, questionnaire or contest;

    • (d) a sports event or activity;

    • (e) a gala presentation or awards show;

    • (f) a production that solicits funds;

    • (g) reality television;

    • (h) pornography;

    • (i) advertising; and

    • (j) a production produced primarily for industrial, corporate or institutional purposes.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • SOR/2005-126, s. 5
  • 2022, c. 10, s. 43

PART XCIV[Repealed, 2016, c. 7, s. 59]

 [Repealed, 2016, c. 7, s. 59]

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 2007, c. 35, s. 88
  • 2014, c. 39, s. 89
  • 2016, c. 7, s. 59

 [Repealed, 2016, c. 7, s. 59]

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 2011, c. 24, s. 99
  • 2016, c. 7, s. 59

PART XCVEmployee Life and Health Trusts

Marginal note:Prescribed rights

 For the purpose of subparagraph 144.1(2)(g)(iii) of the Act, prescribed payments are payments to General Motors of Canada Limited or Chrysler Canada Inc. by the employee life and health trust established for the benefit of retired automobile industry workers by the Canadian Auto Workers’ Union that

  • (a) are reasonable in the circumstances;

  • (b) are made as consideration for administrative services provided to or on behalf of the trust or its beneficiaries, or as reimbursement for employee benefit payments made on behalf of, or in contemplation of the establishment of, the trust; and

  • (c) the recipient acknowledges in writing shall be included in computing the recipient’s income in the year that they are receivable, to the extent that the recipient deducts in the year, or deducted in a prior year, in computing its income amounts in respect of the services or benefit payments described in paragraph (b).

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 2010, c. 25, s. 87

PART XCVISchool Supplies Tax Credit

Marginal note:Prescribed durable goods

 For the purpose of the definition teaching supplies in subsection 122.9(1) of the Act, the following are prescribed durable goods:

  • (a) books;

  • (b) games and puzzles;

  • (c) containers (such as plastic boxes or banker boxes);

  • (d) educational support software;

  • (e) calculators (including graphing calculators);

  • (f) external data storage devices;

  • (g) web cams, microphones and headphones;

  • (h) multimedia projectors;

  • (i) wireless pointer devices;

  • (j) electronic educational toys;

  • (k) digital timers;

  • (l) speakers;

  • (m) video streaming devices;

  • (n) printers; and

  • (o) laptop, desktop and tablet computers, provided that none of these items are made available to the eligible educator by their employer for use outside of the classroom.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 2016, c. 7, s. 60
  • 2022, c. 5, s. 8

PART XCVIICOVID-19 — Air Quality Improvement Tax Credit

Marginal note:Tax credit — air quality improvement

  •  (1) The following definitions apply in this section.

    HEPA filter

    HEPA filter means a high-efficiency particulate air filter that has been tested to ensure efficiency equal to or exceeding 99.97% for removal of airborne particles having a mean aerodynamic diameter of 0.3 µm (micrometres) from the air. (filtre HEPA)

    HVAC system

    HVAC system means a mechanical heating, ventilating and air conditioning system that is installed in a building, and includes all of its equipment and components. (système CVCA)

    MERV

    MERV means the minimum efficiency reporting value parameters specified in ANSI/ASHRAE Standard 52.2-2017, Method of Testing General Ventilation Air-Cleaning Devices for Removal Efficiency by Particle Size, Section 12, Minimum Efficiency Reporting Value (MERV) for Air Cleaners, Table 12-1, Minimum Efficiency Reporting Value (MERV) Parameters. (MERV)

  • (2) Subject to subsection (3), for the purposes of the definition qualifying expenditure in subsection 127.43(1) of the Act, the following outlays and expenses are prescribed to the extent that they are reasonable and intended primarily to increase outdoor air intake or to improve air cleaning:

    • (a) outlays and expenses that are directly attributable to the purchase, installation, conversion or upgrade of a new or retrofitted HVAC system placed in service at a qualifying location that meets either of the following conditions:

      • (i) the system is designed to filter air at a rate in excess of MERV 8 or an equivalent level of filtration, or

      • (ii) the system is designed to filter air at a rate equal to MERV 8 or an equivalent level of filtration and the following conditions are met:

        • (A) the system is designed to achieve an outdoor air supply rate in excess of what is required for the space by applicable building codes, and

        • (B) in the case of an upgrade or conversion of an existing system, prior to the upgrade or conversion, the system was designed to filter air at a rate equal to MERV 8; and

    • (b) outlays and expenses that are directly attributable to the purchase of a device that is placed in service at a qualifying location and designed to filter air using a HEPA filter.

  • (3) The outlays and expenses in subsection (2) do not include an outlay or expense of an eligible entity

    • (a) made or incurred under the terms of an agreement entered into before the start of the qualifying period;

    • (b) that is the cost of recurring or routine repair or maintenance;

    • (c) that can reasonably be expected to be paid or returned, directly or indirectly, in any manner whatever, to

      • (i) the eligible entity,

      • (ii) a person or partnership not dealing at arm’s length with the eligible entity, or

      • (iii) another person or partnership at the direction of the eligible entity;

    • (d) that is paid to a party with which the eligible entity does not deal at arm’s length;

    • (e) that is salary or wages paid to an employee of the eligible entity; or

    • (f) for financing costs.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 2022, c. 5, s. 9
 

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