Income Tax Act — I-3.3 55
20(4.2) in respect of a debt established by it to have become a bad debt in a taxation year that is included in the period and that ends after October 17, 2000, or has an allowable capital loss for such a year because of the application of subsection 20(4.3), the amount determined by the formula X + Y where X is the value determined for A under subsection 20(4.2) in respect of the corporation for the last such taxation year that ended in the period, and Y is 1/3 of the value determined for B under subsection 20(4.2) in respect of the corporation for the last such taxation year that ended in the period, and (C) in any other case, nil; (c) the income earned or realized by a corporation for a period throughout which it was a private corporation is deemed to be its income for the period otherwise determined on the assumption that (i) no amounts were deductible by the corporation under section 37.1 of this Act, as that section applies for taxation years that ended before 1995, or paragraph 20(1)(gg) of the Income Tax Act , chapter 148 of the Revised Statutes of Canada, 1952, and (ii) any amount deductible under section 113 and included in the corporation’s capital dividend account (as defined in subsection 89(1)) under paragraph (h) of that definition was not included in the corporation’s income; (d) the income earned or realized by a corporation (referred to in this paragraph as the “affiliate”) for a period ending at a time when the affiliate was a foreign affiliate of another corporation is deemed to be the lesser of (i) the amount that would, if the Income Tax Regulations were read without reference to their subsection 5905(5.6), be the tax-free surplus balance (within the meaning of their subsection 5905(5.5)) of the affiliate in respect of the other corporation at that time, and (ii) the fair market value at that time of all the issued and outstanding shares of the capital stock of the affiliate; (e) in determining whether 2 or more persons are related to each other, in determining whether a person is at any time a specified shareholder of a corporation and in determining whether control of a corporation has been acquired by a person or group of persons, (i) a person shall be deemed to be dealing with another person at arm’s length and not to be related to the other person if the person is the brother or sister of the other person, except in the case where the dividend was received or paid, as part of a transaction or event or a series of transactions or events, by a corporation of which a share of the capital stock is a qualified small business corporation share or a share of the capital stock of a family farm or fishing corporation within the meaning of subsection 110.6(1), (ii) where at any time a person is related to each beneficiary (other than a registered charity) under a trust who is or may (otherwise than by reason of the death of another beneficiary under the trust) be entitled to share in the income or capital of the trust, the person and the trust shall be deemed to be related at that time to each other and, for this purpose, a person shall be deemed to be related to himself, herself or itself, (iii) a trust and a person shall be deemed not to be related to each other unless they are deemed by paragraph 55(3.2)(d) or subparagraph 55(5)(e)(ii) to be related to each other or the person is a corporation that is controlled by the trust, and (iv) this Act shall be read without reference to subsection 251(3) and paragraph 251(5)(b); and (f) unless subsection (2.3) applies, if a corporation has received a dividend any portion of which is a taxable dividend (such a portion referred to as the taxable part in this paragraph), as part of a transaction or event or series of transactions or events (i) a portion of the dividend is deemed to be a separate taxable dividend equal to the lesser of (A) the taxable part, and (B) the amount of the income earned or realized by any corporation — after 1971 and before the safe-income det