Income Tax Act — I-3.3 142.6
be inventory (4) Where a taxpayer that was a financial institution in its particular taxation year that includes February 23, 1994 held, on that day, a specified debt obligation (other than a mark-to-market property for the year) that was inventory of the taxpayer at the end of its preceding taxation year, (a) the taxpayer shall be deemed to have disposed of the property at the beginning of the particular year for proceeds equal to (i) where subparagraph 142.6(4)(a)(ii) does not apply, the amount at which the property was valued at the end of the preceding taxation year for the purpose of computing the taxpayer’s income for the year, and (ii) where the taxpayer is a bank and the property is prescribed property for the particular year, the cost of the property to the taxpayer (determined without reference to paragraph 142.6(4)(b)); (b) for the purpose of determining the taxpayer’s profit or loss from the disposition, the cost of the property to the taxpayer shall be deemed to be the amount referred to in subparagraph 142.6(4)(a)(i); and (c) the taxpayer shall be deemed to have reacquired the property, immediately after the beginning of the particular year, at a cost equal to the proceeds of disposition of the property. Debt obligations acquired in rollover transactions (5) Where, (a) on February 23, 1994, a financial institution that is a corporation held a specified debt obligation (other than a mark-to-market property for the taxation year that includes that day) that was at any particular time before that day held by another corporation, and (b) between the particular time and February 23, 1994, the only transactions affecting the ownership of the property were rollover transactions, the financial institution shall be deemed, in respect of that obligation, to be the same corporation as, and a continuation of, the other corporation. Definition of rollover transaction (6) For the purpose of subsection 142.6(5), rollover transaction means a transaction to which subsection 87(2), 88(1) or 138(11.5) or 138(11.94) applies, other than a transaction to which paragraph 138(11.5)(e) requires the provisions of subsection 85(1) to be applied. Superficial loss rule not applicable (7) Subsection 18(13) does not apply to the disposition of a property by a taxpayer after October 30, 1994 where (a) the taxpayer is a financial institution when the disposition occurs and the property is a specified debt obligation or a mark-to-market property for the taxation year in which the disposition occurs; or (b) the disposition occurs because of paragraph 142.6(1)(b). Accrued capital gains and losses election (8) Where a taxpayer that is a financial institution in its first taxation year that ends after February 22, 1994 so elects by notifying the Minister in writing before July 1998 or within 90 days after the day on which a notice of assessment of tax payable under this Part for the year, notification that no tax is payable under this Part for the year or notification that an election made by the taxpayer under this subsection is deemed by subsection 142.6(9) or 142.6(10) not to have been made is mailed to the taxpayer, (a) each property of the taxpayer (i) that was a capital property (other than a depreciable property) of the taxpayer at the end of the taxpayer’s last taxation year that ended before February 23, 1994, (ii) that was a mark-to-market property for, or a specified debt obligation in, the taxpayer’s first taxation year that begins after that time, (iii) that had a fair market value at that time greater than its adjusted cost base to the taxpayer at that time, and (iv) that is designated by the taxpayer in the election is deemed to have been disposed of by the taxpayer at that time for proceeds of disposition equal to, and to have been reacquired by the taxpayer immediately after that time at a cost equal to, the lesser of (v) the fair market value of the property at that time, and (vi) the greater of the adjusted cost base to the taxpaye