Income Tax Act — I-3.3 49
under paragraph 53(2)(g.1) in computing, immediately before that time, the adjusted cost base to the taxpayer of the option; and (b) the amount determined under paragraph 49(3.01)(a) in respect of that acquisition shall be added after that time in computing the adjusted cost base to the taxpayer of the specified property. Where option to dispose exercised (3.1) Where an option to dispose of property is exercised so that property is disposed of by a taxpayer (in this subsection referred to as the “vendor”) or so that property is acquired by another taxpayer (in this subsection referred to as the “purchaser”), for the purpose of computing the income of each such taxpayer the granting and the exercise of the option shall be deemed not to be dispositions of property and there shall be deducted (a) in computing the vendor’s proceeds of disposition of the property, the adjusted cost base to the vendor of the option; and (b) in computing the cost to the purchaser of the property, the consideration received by the purchaser for the option. Option granted before February 23, 1994 (3.2) Where an individual (other than a trust) who disposes of property pursuant to the exercise of an option that was granted by the individual before February 23, 1994 so elects in the individual’s return of income for the taxation year in which the disposition occurs, subsection 49(3) does not apply in respect of the disposition in computing the income of the individual. Reassessment where option exercised in subsequent year (4) Where (a) an option granted by a taxpayer in a taxation year (in this subsection referred to as the “initial year”) is exercised in a subsequent taxation year (in this subsection referred to as the “subsequent year”), (b) the taxpayer has filed a return of the taxpayer’s income for the initial year as required by section 150, and (c) on or before the day on or before which the taxpayer was required by section 150 to file a return of the taxpayer’s income for the subsequent year, the taxpayer has filed an amended return for the initial year excluding from the taxpayer’s income the proceeds received by the taxpayer for the granting of the option, such reassessment of the taxpayer’s tax, interest or penalties for the year shall be made as is necessary to give effect to the exclusion. Idem (5) Where a taxpayer has granted an option (in this subsection referred to as the “original option”) to which subsection 49(1), 49(2) or 49(2.1) applies, and grants one or more extensions or renewals of that original option, (a) for the purposes of subsections 49(1), 49(2) and 49(2.1), the granting of each extension or renewal shall be deemed to be the granting of an option at the time the extension or renewal is granted; (b) for the purposes of subsections (2) to (4) and subparagraph (b)(iv) of the definition disposition in subsection 248(1), the original option and each extension or renewal of it is deemed to be the same option; and (c) subsection 49(4) shall be read as if the year in which the original option was granted and each year in which any extension or renewal thereof was granted were all initial years. [NOTE: Application provisions are not included in the consolidated text; see relevant amending Acts and regulations.] R.S., 1985, c. 1 (5th Supp.), s. 49; 1994, c. 7, Sch. II, s. 27; 1995, c. 3, s. 13, c. 21, s. 14; 2001, c. 17, s. 34; 2013, c. 34, s. 188