Income Tax Act — I-3.3 129
ed to be the amount that would be determined for clause (a)(i)(A) if paragraph (a) applied to the corporation in respect of the taxation year. 2019 transitional RDTOH — amalgamations (5.1) Subsection (5) applies with such modifications as are necessary for the purpose of applying paragraph 87(2)(aa) in respect of a corporation if (a) the corporation is a predecessor corporation (within the meaning assigned by subsection 87(1)) in respect of an amalgamation (within the meaning assigned by subsection 87(1)); (b) the corporation has an amount of refundable dividend tax on hand at the end of its taxation year that ends because of paragraph 87(2)(a); and (c) the first taxation year of the new corporation (within the meaning assigned by subsection 87(1)) in respect of the amalgamation is one to which the definition eligible refundable dividend tax on hand in subsection (4) applies. Investment income from associated corporation deemed to be active business income (6) Where any particular amount paid or payable to a corporation (in this subsection referred to as the “recipient corporation”) by another corporation (in this subsection referred to as the “associated corporation”) with which the recipient corporation was associated in any particular taxation year commencing after 1972, would otherwise be included in computing the income of the recipient corporation for the particular year from a source in Canada that is a property, the following rules apply: (a) for the purposes of subsection 129(4), in computing the recipient corporation’s income for the year from a source in Canada that is a property, (i) there shall not be included any portion (in this subsection referred to as the “deductible portion”) of the particular amount that was or may be deductible in computing the income of the associated corporation for any taxation year from an active business carried on by it in Canada, and (ii) no deduction shall be made in respect of any outlay or expense, to the extent that that outlay or expense may reasonably be regarded as having been made or incurred by the recipient corporation for the purpose of gaining or producing the deductible portion; and (b) for the purposes of this subsection and section 125, (i) the deductible portion shall be deemed to be income of the recipient corporation for the particular year from an active business carried on by it in Canada, and (ii) any outlay or expense, to the extent described in subparagraph 129(6)(a)(ii), shall be deemed to have been made or incurred by the recipient corporation for the purpose of gaining or producing that income. Meaning of taxable dividend (7) For the purposes of this section, taxable dividend does not include a capital gains dividend within the meaning assigned by subsection 131(1). Application of s. 125 (8) Expressions used in this section and not otherwise defined for the purposes of this section have the same meanings as in section 125. [NOTE: Application provisions are not included in the consolidated text; see relevant amending Acts and regulations.] R.S., 1985, c. 1 (5th Supp.), s. 129; 1994, c. 7, Sch. II, s. 108, Sch. VIII, s. 73; 1996, c. 21, s. 32; 1998, c. 19, s. 154; 2001, c. 17, s. 126; 2003, c. 15, s. 111; 2010, c. 25, s. 29; 2013, c. 34, s. 275; 2016, c. 11, s. 7; 2017, c. 33, s. 51; 2018, c. 12, s. 22, c. 27, s. 15 2024, c. 15, s. 40 2024, c. 17, s. 46 2026, c. 3, s. 61