Income Tax Act — I-3.3 18
icular position is an offsetting position in respect of a second position; (b) the second position was an offsetting position in respect of the initial position that was disposed of at a particular time; and (c) the particular position was entered into during the period that begins 30 days before, and ends 30 days after, the particular time. ( position remplaçante ) unrecognized loss , in respect of a position of a person or partnership at a particular time in a taxation year, means the loss, if any, that would be deductible in computing the income of the person or partnership for the year with respect to the position if it were disposed of immediately before the particular time at its fair market value at the time of disposition. ( perte non constatée ) unrecognized profit , in respect of a position of a person or partnership at a particular time in a taxation year, means the profit, if any, that would be included in computing the income of the person or partnership for the year with respect to the position if it were disposed of immediately before the particular time at its fair market value at the time of disposition. ( bénéfice non constaté ) Application of subsection (19) (18) Subject to subsection (20), subsection (19) applies in respect of a disposition of a particular position by a person or partnership (in this subsection and subsections (19), (20) and (22) referred to as the “transferor”), if (a) the disposition is not a disposition that is deemed to have occurred by section 70, subsection 104(4), section 128.1 or subsection 138(11.3) or 149(10); (b) the transferor is not a financial institution (as defined in subsection 142.2(1)), a mutual fund corporation or a mutual fund trust; and (c) the particular position was, immediately before the disposition, not a capital property, or an obligation or liability on account of capital, of the transferor. Straddle losses (19) If this subsection applies in respect of a disposition of a particular position by a transferor, the portion of the transferor’s loss, if any, from the disposition of the particular position that is deductible in computing the transferor’s income for a particular taxation year is the amount determined by the formula A + B − C where A is (a) if the particular taxation year is the taxation year in which the disposition occurs, the amount of the loss determined without reference to this subsection (which is, for greater certainty, subject to subsection (15)), and (b) in any other taxation year, nil; B is (a) if the disposition occurred in a preceding taxation year, the amount determined for C in respect of the disposition for the immediately preceding taxation year, and (b) in any other case, nil; and C is the lesser of (a) the amount determined for A for the taxation year in which the disposition occurs, and (b) the amount determined by the formula D − (E + F) where D is the total of all amounts each of which is the amount of unrecognized profit at the end of the particular taxation year in respect of (i) the particular position, (ii) positions that are offsetting positions in respect of the particular position (or would be, to the extent that there is no successor position in respect of the particular position, if the particular position continued to be held by the transferor), (iii) successor positions in respect of the particular position (for this purpose, a successor position in respect of a position includes a successor position that is in respect of a successor position in respect of the position), and (iv) positions that are offsetting positions in respect of any successor position referred to in subparagraph (iii) (or would be, if any such successor position continued to be held by the holder), E is the total of all amounts each of which is the amount of unrecognized loss at the end of the particular taxation year in respect of positions referred to in subparagraphs (i) to (iv) of the description of D, and F is the total of all amounts each of whi