Income Tax Act — I-3.3 128
Where corporation bankrupt 128 (1) Where a corporation has become a bankrupt, the following rules are applicable: (a) the trustee in bankruptcy shall be deemed to be the agent of the bankrupt for all purposes of this Act; (b) the estate of the bankrupt shall be deemed not to be a trust or an estate for the purposes of this Act; (c) the income and the taxable income of the corporation for any taxation year of the corporation during which it was a bankrupt and for any subsequent year shall be calculated as if (i) the property of the bankrupt did not pass to and vest in the trustee in bankruptcy on the bankruptcy order being made or the assignment filed but remained vested in the bankrupt, and (ii) any dealing in the estate of the bankrupt or any act performed in the carrying on of the business of the bankrupt estate by the trustee was done as agent on behalf of the bankrupt and any income of the trustee from such dealing or carrying on is income of the bankrupt and not of the trustee; (d) a taxation year of the corporation shall be deemed to have commenced on the day the corporation became a bankrupt and a taxation year of the corporation that would otherwise have ended after the corporation became a bankrupt shall be deemed to have ended on the day immediately before the day on which the corporation became a bankrupt; (e) if, in the case of any taxation year of the corporation ending during the period the corporation is a bankrupt, the corporation fails to pay any tax payable by it under this Act for any such year, the corporation and the trustee in bankruptcy are jointly and severally, or solidarily, liable to pay the tax, except that (i) the trustee is only liable to the extent of the property of the bankrupt in the trustee’s possession, and (ii) payment by either of them discharges the liability to the extent of the amount paid; (f) in the case of any taxation year of the corporation ending during the period the corporation is a bankrupt, the corporation shall be deemed not to be associated with any other corporation in the year; and (g) where an absolute order of discharge is granted in respect of the corporation, for the purposes of section 111 any loss of the corporation for any taxation year preceding the year in which the order of discharge was granted is not deductible by the corporation in computing its taxable income for the taxation year of the corporation in which the order was granted or any subsequent year. Where individual bankrupt (2) Where an individual has become a bankrupt, the following rules are applicable: (a) the trustee in bankruptcy shall be deemed to be the agent of the bankrupt for all purposes of this Act; (b) the estate of the bankrupt shall be deemed not to be a trust or an estate for the purposes of this Act; (c) the income and the taxable income of the individual for any taxation year during which the individual was a bankrupt and for any subsequent year shall be calculated as if (i) the property of the bankrupt did not pass to and vest in the trustee in bankruptcy on the bankruptcy order being made or the assignment filed but remained vested in the bankrupt, and (ii) any dealing in the estate of the bankrupt or any act performed in the carrying on of the business of the bankrupt estate by the trustee was done as agent on behalf of the bankrupt and any income of the trustee from such dealing or carrying on is income of the bankrupt and not of the trustee; (d) except for the purposes of subsections 146(1), 146.01(4) and 146.02(4) and Part X.1, (i) a taxation year of the individual is deemed to have begun at the beginning of the day on which the individual became a bankrupt, and (ii) the individual’s last taxation year that began before that day is deemed to have ended immediately before that day; (d.1) where, by reason of paragraph (d), a taxation year of the individual is not a calendar year, (i) paragraph 146(5)(b) shall, for the purpose of the application of subsection 146(5) to the taxation y