Income Tax Act — I-3.3 7
subject to subsection (1.31), a taxpayer is deemed to dispose of securities that are identical properties in the order in which the taxpayer acquired them and, for this purpose, (a) if a taxpayer acquires a particular security (other than under circumstances to which subsection (1.1) or 147(10.1) applies) at a time when the taxpayer also acquires or holds one or more other securities that are identical to the particular security and are, or were, acquired under circumstances to which subsection (1.1) or 147(10.1) applied, the taxpayer is deemed to have acquired the particular security at the time immediately preceding the earliest of the times at which the taxpayer acquired those other securities; and (b) if a taxpayer acquires, at the same time, two or more identical securities under circumstances to which subsection (1.1) applied, the taxpayer is deemed to have acquired the securities in the order in which the agreements under which the taxpayer acquired the rights to acquire the securities were made. Disposition of newly acquired security (1.31) Where a taxpayer acquires at a particular time a particular security under an agreement referred to in subsection (1) — or acquires the particular security as consideration for the disposition of rights under the agreement — and, on a day that is no later than 30 days after the day that includes the particular time, the taxpayer disposes of a security that is identical to the particular security, the particular security is deemed to be the security that is so disposed of if (a) no other securities that are identical to the particular security are acquired, or disposed of, by the taxpayer after the particular time and before the disposition; (b) the taxpayer identifies the particular security as the security so disposed of in the taxpayer’s return of income under this Part for the year in which the disposition occurs; and (c) the taxpayer has not so identified the particular security, in accordance with this subsection, in connection with the disposition of any other security. Exchange of options (1.4) Where (a) a taxpayer disposes of rights under an agreement referred to in subsection (1) to acquire securities of a particular qualifying person that made the agreement or of a qualifying person with which it does not deal at arm’s length (which rights and securities are referred to in this subsection as the “exchanged option” and the “old securities”, respectively), (b) the taxpayer receives no consideration for the disposition of the exchanged option other than rights under an agreement with a person (in this subsection referred to as the “designated person”) that is (i) the particular person, (ii) a qualifying person with which the particular person does not deal at arm’s length immediately after the disposition, (iii) a corporation formed on the amalgamation or merger of the particular person and one or more other corporations, (iv) a mutual fund trust to which the particular person has transferred property in circumstances to which subsection 132.2(1) applied, (v) a qualifying person with which the corporation referred to in subparagraph (iii) does not deal at arm’s length immediately after the disposition, or (vi) if the disposition is before 2013 and the old securities were equity in a SIFT wind-up entity that was at the time of the disposition a mutual fund trust, a SIFT wind-up corporation in respect of the SIFT wind-up entity to acquire securities of the designated person or a qualifying person with which the designated person does not deal at arm’s length (which rights and securities are referred to in this subsection as the “new option” and the “new securities”, respectively), and (c) the amount, if any, by which (i) the total value of the new securities immediately after the disposition exceeds (ii) the total amount payable by the taxpayer to acquire the new securities under the new option does not exceed the amount, if any, by which (iii) the total value of the old securi