Income Tax Act — I-3.3 112
pect of which an election was made under subsection 83(2) where subsection 83(2.1) does not deem the dividend to be a taxable dividend, and (ii) the loss determined without reference to this subsection minus all taxable dividends received by the taxpayer on the share; and (b) where the taxpayer is a corporation, the total of all amounts received by the taxpayer on the share each of which is (i) a taxable dividend, to the extent of the amount of the dividend that was deductible under this section or subsection 115(1) or 138(6) in computing the taxpayer’s taxable income or taxable income earned in Canada for any taxation year, (ii) a dividend in respect of which an election was made under subsection 83(2) where subsection 83(2.1) does not deem the dividend to be a taxable dividend, or (iii) a life insurance capital dividend. Loss on share that is capital property — excluded dividends (3.01) A qualified dividend shall not be included in the total determined under subparagraph (3)(a)(i) or paragraph (3)(b) if the taxpayer establishes that (a) it was received when the taxpayer and persons with whom the taxpayer was not dealing at arm’s length did not own in total more than 5% of the issued shares of any class of the capital stock of the corporation from which the dividend was received; and (b) it was received on a share that the taxpayer owned throughout the 365-day period that ended immediately before the disposition. Loss on share held by partnership (3.1) Subject to subsections 112(5.5) and 112(5.6), where a taxpayer (other than a partnership or a mutual fund trust) is a member of a partnership, the taxpayer’s share of any loss of the partnership from the disposition of a share that is held by a particular partnership as capital property is deemed to be that share of the loss determined without reference to this subsection minus, (a) where the taxpayer is an individual, the lesser of (i) the total of all amounts each of which is a dividend received by the taxpayer on the share in respect of which an election was made under subsection 83(2) where subsection 83(2.1) does not deem the dividend to be a taxable dividend, and (ii) that share of the loss determined without reference to this subsection minus all taxable dividends received by the taxpayer on the share; (b) where the taxpayer is a corporation, the total of all amounts received by the taxpayer on the share each of which is (i) a taxable dividend, to the extent of the amount of the dividend that was deductible under this section or subsection 115(1) or 138(6) in computing the taxpayer’s taxable income or taxable income earned in Canada for any taxation year, (ii) a dividend in respect of which an election was made under subsection 83(2) where subsection 83(2.1) does not deem the dividend to be a taxable dividend, or (iii) a life insurance capital dividend; and (c) where the taxpayer is a trust, the total of all amounts each of which is (i) a taxable dividend, or (ii) a life insurance capital dividend received on the share and designated under subsection 104(19) or 104(20) by the trust in respect of a beneficiary that was a corporation, partnership or trust. Loss on share held by partnership — excluded dividends (3.11) A qualified dividend shall not be included in the total determined under subparagraph (3.1)(a)(i) or paragraph (3.1)(b) or (c) if the taxpayer establishes that (a) it was received when the particular partnership, the taxpayer and persons with whom the taxpayer was not dealing at arm’s length did not hold in total more than 5% of the issued shares of any class of the capital stock of the corporation from which the dividend was received; and (b) it was received on a share that the particular partnership held throughout the 365-day period that ended immediately before the disposition. Loss on share held by partnership — excluded dividends (3.12) A taxable dividend received on a share and designated under subsection 104(19) by a particular trust in respect of a be