Income Tax Act — I-3.3 40
d of to a child (1.1) In computing the amount that a taxpayer may claim under subparagraph (1)(a)(iii) in computing the taxpayer’s gain from the disposition of a property, that subparagraph shall be read as if the references in that subparagraph to “1/5” and “4” were references to “1/10” and “9” respectively, if, (a) the property was disposed of by the taxpayer to the taxpayer’s child, (b) that child was resident in Canada immediately before the disposition, and (c) the property was immediately before the disposition, (i) any land in Canada or depreciable property in Canada of a prescribed class that was used by the taxpayer, the spouse or common-law partner of the taxpayer, a child or a parent of the taxpayer in a farming or fishing business carried on in Canada, (ii) a share of the capital stock of a family farm or fishing corporation of the taxpayer or an interest in a family farm or fishing partnership of the taxpayer (such a share or an interest having the meaning assigned by subsection 70(10)), or (iii) a qualified small business corporation share of the taxpayer (within the meaning assigned by subsection 110.6(1)). (iv) [Repealed, 2014, c. 39, s. 11] Reserve — intergenerational business transfers (1.2) In computing the amount that a taxpayer may claim under subparagraph (1)(a)(iii) on a disposition of shares of the capital stock of a corporation resident in Canada to another corporation, that subparagraph is to be read as if the references to “1/5” and “4” were references to “1/10” and “9” respectively, if the conditions set out in subsection 84.1(2.31) or (2.32) are satisfied in respect of the disposition. Reserve — dispositions to employee ownership trusts (1.3) In computing the amount that a taxpayer may claim under subparagraph (1)(a)(iii) in computing the taxpayer’s gain from the disposition of a share of the capital stock of a corporation, that subparagraph is to be read as if the references in that subparagraph to “1/5” and “4” were references to “1/10” and “9” respectively, if the shares were disposed of by the taxpayer under a qualifying business transfer. Reserve — dispositions to worker cooperatives (1.4) In computing the amount that a taxpayer may claim under subparagraph (1)(a)(iii) in computing the taxpayer’s gain from the disposition of a share of the capital stock of a corporation, that subparagraph is to be read as if the references in that subparagraph to “1/5” and “4” were references to “1/10” and “9” respectively, if the shares were disposed of by the taxpayer under a qualifying cooperative conversion. Limitations (2) Notwithstanding subsection 40(1), (a) subparagraph 40(1)(a)(iii) does not apply to permit a taxpayer to claim any amount under that subparagraph in computing a gain for a taxation year if (i) the taxpayer, at the end of the year or at any time in the immediately following year, was not resident in Canada or was exempt from tax under any provision of this Part, (ii) the purchaser of the property sold is a corporation that, immediately after the sale, (A) was controlled, directly or indirectly, in any manner whatever, by the taxpayer, (B) was controlled, directly or indirectly, in any manner whatever, by a person or group of persons by whom the taxpayer was controlled, directly or indirectly, in any manner whatever, or (C) controlled the taxpayer, directly or indirectly, in any manner whatever, where the taxpayer is a corporation, or (iii) the purchaser of the property sold is a partnership in which the taxpayer was, immediately after the sale, a majority-interest partner; (b) where the taxpayer is an individual, the taxpayer’s gain for a taxation year from the disposition of a property that was the taxpayer’s principal residence at any time after the date (in this section referred to as the “acquisition date”) that is the later of December 31, 1971 and the day on which the taxpayer last acquired or reacquired it, as the case may be, is the amount determined by the formula A - (A × B/C) -