Income Tax Act — I-3.3 47.1
Application of s. 47.1 of R.S.C., 1952, c. 148 47.1 (26.1) Words and expressions used in subsections 47.1(27) and 47.1(28) have the meanings assigned to them by subsections 47.1(1) to (26) of the Income Tax Act , chapter 148 of the Revised Statutes of Canada, 1952, as the latter subsections read on July 1, 1986 and in so far as they are not inconsistent with subsections 47.1(27) and 47.1(28). Capital losses in 1986 (27) Notwithstanding any other provision of this Act, where paragraph 47.1(10)(f) of the Income Tax Act , chapter 148 of the Revised Statutes of Canada, 1952, as that paragraph read on January 1, 1986, applied in respect of the termination before 1986 of an indexed security investment plan under which a taxpayer was a participant, any amount that would have been deemed under that paragraph to be a capital loss of the taxpayer from the Plan for the 1986 or a subsequent taxation year shall be deemed to be a capital loss of the taxpayer for the 1986 taxation year from the disposition of property in 1986. Transition for 1986 (28) Where a taxpayer was a participant under a Plan on January 1, 1986, the following rules apply: (a) each indexed security owned under the Plan by the taxpayer on that date shall be deemed to have been disposed of under the Plan on that date for proceeds of disposition determined by the formula A × B/C where A is the indexing base of the Plan on that date determined as if subparagraph 47.1(3)(a)(i) of the Income Tax Act , chapter 148 of the Revised Statutes of Canada, 1952, were read as “the fair market value of all indexed securities owned by the taxpayer under the Plan at the end of the preceding taxation year”, B is the fair market value of the security on that date, and C is the fair market value of all indexed securities owned under the Plan by the taxpayer on that date; (b) each indexed security deemed under paragraph 47.1(28)(a) to have been disposed of under the Plan shall be deemed to have been reacquired outside the Plan by the taxpayer immediately after that date at a cost equal to the amount deemed under paragraph 47.1(28)(a) to be the proceeds of the disposition of that security; (c) each put or call option referred to in clause 47.1(4)(a)(iv)(B) or (C) of the Income Tax Act , chapter 148 of the Revised Statutes of Canada, 1952, as that clause read on January 1, 1986, outstanding under the Plan on that date shall be deemed to have been closed out under the Plan on that date at a cost equal to the amount that the taxpayer would have had to pay on that date if the taxpayer had actually closed out the option on a prescribed stock exchange in Canada on that date; (d) each put or call option deemed under paragraph 47.1(28)(c) to have been closed out shall be deemed to be written outside the Plan immediately after that date for proceeds equal to the amount deemed under paragraph 47.1(28)(c) to be the cost at which the option was closed out; and (e) for greater certainty, the taxpayer’s indexed gain or loss, as the case may be, for the 1986 taxation year from the Plan and unindexed gain or loss, as the case may be, for that year from the Plan shall be nil. [NOTE: Application provisions are not included in the consolidated text; see relevant amending Acts and regulations.] 1984, c. 1, s. 17; 1985, c. 45, ss. 19, 126(F); 1986, c. 6, s. 20, c. 55, s. 7