Income Tax Act — I-3.3 70
d without reference to this subsection, apply if (a) the property was, before the death of the taxpayer, used principally in a farming or fishing business carried on in Canada in which the taxpayer, the spouse or common-law partner of the taxpayer or a child or parent of the taxpayer was actively engaged on a regular and continuous basis (or, in the case of property used in the operation of a woodlot, was engaged to the extent required by a prescribed forest management plan in respect of that woodlot); (b) the child of the taxpayer was resident in Canada immediately before the day on which the taxpayer died; and (c) as a consequence of the death of the taxpayer, the property is transferred to and becomes vested indefeasibly in the child within the period ending 36 months after the death of the taxpayer or, if written application has been made to the Minister by the taxpayer’s legal representative within that period, within any longer period that the Minister considers reasonable in the circumstances. Transfer of farming and fishing property to child (9.01) If, because of subsection (9), this subsection applies to the taxpayer and a child of the taxpayer in respect of a property of the taxpayer that has been transferred to the child as a consequence of the death of the taxpayer, the following rules apply: (a) where the taxpayer’s legal representative does not elect in the taxpayer’s return of income under this Part for the year in which the taxpayer died, to have paragraph (b) apply to the taxpayer and the child in respect of the property, (i) paragraphs (5)(a) and (b) and section 69 do not apply to the taxpayer and the child in respect of the property, (ii) the taxpayer is deemed to have (A) disposed of the property immediately before the taxpayer’s death, and (B) received, at the time of the disposition of the property, proceeds of disposition in respect of that disposition of the property equal to (I) where the property was depreciable property of a prescribed class, the lesser of 1 the capital cost to the taxpayer of the property, and 2 the amount, determined immediately before the time of the disposition of the property, that is that proportion of the undepreciated capital cost of property of that class to the taxpayer that the capital cost to the taxpayer of the property is of the capital cost to the taxpayer of all property of that class that had not, at or before that time, been disposed of, and (II) where the property is land (other than land to which subclause (I) applies), the adjusted cost base to the taxpayer of the property immediately before the time of the disposition of the property, (iii) the child is, immediately after the time of the disposition of the property, deemed to have acquired the property at a cost equal to the taxpayer’s proceeds of disposition in respect of the disposition of the property determined under subparagraph (ii), and (iv) where the property was depreciable property of a prescribed class, paragraphs (5)(c) and (d) apply to the taxpayer and the child in respect of the property as if the references in those paragraphs to “paragraph (a)” and “paragraph (b)” were read as “subparagraph (9.01)(a)(ii)” and “subparagraph (9.01)(a)(iii)”, respectively; and (b) where the taxpayer’s legal representative elects, in the taxpayer’s return of income under this Part for the taxation year in which the taxpayer died, to have this paragraph apply to the taxpayer in respect of the property, (i) paragraphs (5)(a) and (b) and section 69 do not apply to the taxpayer and the child in respect of the property, (ii) the taxpayer is deemed to have (A) disposed of the property immediately before the taxpayer’s death, and (B) received, at the time of the disposition of the property, proceeds of disposition in respect of that disposition of the property equal to (I) where the property was depreciable property of a prescribed class, the amount that the legal representative designates, which must not be greater than th