Income Tax Regulations

9002 (1) For the purposes of paragraph (e) of the definition excluded property in subsection 142.2(1) of the Act, and of subparagraph 142.6(4)(a)(ii) of the Act, a debt obligation held by a bank is a prescribed property of the bank if the obligation is

• (a) an exposure to a designated country (within the meaning assigned by section 8006);

• (b) a United Mexican States Collateralized Par Bond due 2019; or

• (c) a United Mexican States Collateralized Discount Bond due 2019.

(2) For the purpose of paragraph (e) of the definition excluded property in subsection 142.2(1) of the Act, a share is a prescribed property of a taxpayer for a taxation year if

• (a) the share is a lending asset of the taxpayer in the year; or

• (b) the share was, immediately after its issuance, a share described in paragraph (e) of the definition term preferred share in subsection 248(1) of the Act, and the share would, at any time in the year, be a term preferred share if

  • (i) that definition were read without ref- erence to the portion following paragraph (b), and

  • (ii) where the share was issued or acquired on or before June 28, 1982, it were issued or acquired after that day.

(3) For the purpose of paragraph (e) of the definition excluded property in subsection 142.2(1) of the Act, a share of the capital stock of a corporation that is held by a credit union is a prescribed property of the credit union for a taxation year if, throughout the period (referred to in this subsection as the “holding period”) in that taxation year during which the credit union holds the share

• (a) the corporation is a credit union; or

• (b) the following conditions are satisfied:

  • (i) credit unions hold shares of the corporation that

    • (A) give those credit unions at least 50% of the votes that could be cast under all circumstances at an annual meeting of shareholders of the corporation, and

    • (B) have a fair market value of at least 50% of the fair market value of all the issued shares of the corporation,

  • (ii) the corporation is not controlled, directly or indirectly in any manner whatever, by any person that is not a credit union, and

  • (iii) the corporation would not be controlled by a person that is not a credit union if each share of the corporation that is not owned at any time in the holding period by a credit union were owned, at that time, by the person.

(4) For the purpose of subsection (3), if a partnership, at a particular time, owns or holds shares of a corporation (or is deemed under this subsection to own or hold shares of a corporation) that have a fair market value of at least 50% of all the issued shares of the corporation,

• (a) the partnership is deemed not to exist at that time; and

• (b) each member of the partnership is deemed to own or hold at that time that proportion of shares of any class of the capital stock of the corporation that are property of the partnership at that time, that the fair market value of the member’s interest in the partnership is of the fair market value of all interests in the partnership at that time.

(5) For the purpose of paragraph (3)(b), a subsidiary wholly-owned corporation of a credit union is deemed to be a credit union.