Income Tax Act — I-3.3 111
r for profit or with a reasonable expectation of profit, and (ii) only to the extent of the taxpayer’s income for the particular year from (A) that business, and (B) if properties were sold, leased, rented or developed or services rendered in the course of carrying on that business before that time, any other business substantially all the income of which was derived from the sale, leasing, rental or development, as the case may be, of similar properties or the rendering of similar services. Loss restriction event – cumulative unused excess capacity (5.01) If at any time a particular taxpayer is subject to a loss restriction event, the cumulative unused excess capacity of any taxpayer for any taxation year that ends after that time shall be determined without regard to any absorbed capacity, excess capacity or transferred capacity of the particular taxpayer for any taxation year that ended before that time. Loss restriction event — UCC computation (5.1) Subject to subsection (5.5), if at any time a taxpayer is subject to a loss restriction event and, if this Act were read without reference to subsection 13(24), the undepreciated capital cost to the taxpayer of depreciable property of a prescribed class immediately before that time would have exceeded the total of (a) the fair market value of all the property of that class immediately before that time, and (b) the amount in respect of property of that class otherwise allowed under regulations made under paragraph 20(1)(a) or deductible under subsection 20(16) in computing the taxpayer’s income for the taxation year that ended immediately before that time, the excess is to be deducted in computing the taxpayer’s income for the taxation year that ended immediately before that time and is deemed to have been allowed in respect of property of that class under regulations made under paragraph 20(1)(a). (5.2) [Repealed, 2016, c. 12, s. 40] Loss restriction event — doubtful debts and bad debts (5.3) Subject to subsection (5.5), if at any time a taxpayer is subject to a loss restriction event, (a) no amount may be deducted under paragraph 20(1)(l) in computing the taxpayer’s income for the taxation year that ended immediately before that time; and (b) in respect of each debt owing to the taxpayer immediately before that time (i) the amount that is the greatest amount that would, but for this subsection and subsection 26(2) of this Act and subsection 33(1) of the Income Tax Act , chapter 148 of the Revised Statutes of Canada, 1952, have been deductible under paragraph 20(1)(l) (A) is deemed to be a separate debt, and (B) notwithstanding any other provision of this Act, is to be deducted as a bad debt under paragraph 20(1)(p) in computing the taxpayer’s income for its taxation year that ended immediately before that time, and (ii) the amount by which the debt exceeds that separate debt is deemed to be a separate debt incurred at the same time and under the same circumstances as the debt was incurred. Non-capital loss (5.4) Where, at any time, control of a corporation has been acquired by a person or persons, such portion of the corporation’s non-capital loss for a taxation year ending before that time as 111(5.4)(a) was not deductible in computing the corporation’s income for a taxation year ending before that time, and (b) can reasonably be considered to be a non-capital loss of a subsidiary corporation (in this subsection referred to as the “former subsidiary corporation”) from carrying on a particular business (in this subsection referred to as the “former subsidiary corporation’s loss business”) that was deemed by subsection 88(1.1) of the Income Tax Act , chapter 148 of the Revised Statutes of Canada, 1952, as it read on November 12, 1981 to be the non-capital loss of the corporation for the taxation year of the corporation in which the former subsidiary corporation’s loss year ended shall be deemed to be a non-capital loss of the corporation from carrying on the former subsidiary c