Income Tax Act — I-3.3 112
ayer’s taxable income or taxable income earned in Canada for any taxation year, or (ii) a dividend (other than a taxable dividend). Loss on share that is not capital property — excluded dividends (4.01) A qualified dividend shall not be included in the total determined under paragraph (4)(a), (b) or (c) if the taxpayer establishes that (a) it was received when the taxpayer and persons with whom the taxpayer was not dealing at arm’s length did not own in total more than 5% of the issued shares of any class of the capital stock of the corporation from which the dividend was received; and (b) it was received on a share that the taxpayer owned throughout the 365-day period that ended immediately before the disposition. Fair market value of shares held as inventory (4.1) For the purpose of section 10, the fair market value at any time of a share of the capital stock of a corporation is deemed to be equal to the fair market value of the share at that time, plus (a) where the shareholder is a corporation, the total of all amounts received by the shareholder on the share before that time each of which is (i) a taxable dividend, to the extent of the amount of the dividend that was deductible under this section, section 113 or subsection 115(1) or 138(6) in computing the shareholder’s taxable income or taxable income earned in Canada for any taxation year, or (ii) a dividend (other than a taxable dividend); (b) where the shareholder is a partnership, the total of all amounts each of which is a dividend received by the shareholder on the share before that time; and (c) where the shareholder is an individual and the corporation is resident in Canada, the total of all amounts each of which is a dividend received by the shareholder on the share before that time (or, where the shareholder is a trust, that would have been so received if this Act were read without reference to subsection 104(19)). Fair market value of shares held as inventory — excluded dividends (4.11) A qualified dividend shall not be included in the total determined under paragraph (4.1)(a), (b) or (c) if the shareholder establishes that (a) it was received while the shareholder and persons with whom the shareholder was not dealing at arm’s length did not hold in total more than 5% of the issued shares of any class of the capital stock of the corporation from which the dividend was received; and (b) it was received on a share that the shareholder held throughout the 365-day period that ended at the time referred to in subsection 112(4.1). Loss on share held by trust (4.2) Subject to subsections 112(5.5) and 112(5.6), the amount of any loss of a trust from the disposition of a share that is property (other than capital property) of the trust is deemed to be the amount of the loss determined without reference to this subsection minus (a) the total of all amounts each of which is a dividend received by the trust on the share, to the extent that the amount was not designated under subsection 104(20) in respect of a beneficiary of the trust; and (b) the total of all amounts each of which is a dividend received on the share that was designated under subsection 104(19) or 104(20) by the trust in respect of a beneficiary of the trust. Loss on share held by trust — excluded dividends (4.21) A qualified dividend shall not be included in the total determined under paragraph (4.2)(a) if the taxpayer establishes that (a) it was received when the trust and persons with whom the trust was not dealing at arm’s length did not own in total more than 5% of the issued shares of any class of the capital stock of the corporation from which the dividend was received; and (b) it was received on a share that the trust owned throughout the 365-day period that ended immediately before the disposition. Loss on share held by trust — excluded dividends (4.22) A qualified dividend shall not be included in the total determined under paragraph (4.2)(b) if the taxpayer establishes that (a) it was received w