Income Tax Act — I-3.3 85
nership interest of any member of the partnership shall be deemed to be the cost to the member of all shares and property receivable or received by the member as consideration for the disposition of the interest plus the amount of any money received by the member as consideration for the disposition, and (h) where the partnership has distributed partnership property referred to in paragraph 85(3)(c) to a member of the partnership, the partnership shall be deemed to have disposed of that property for proceeds equal to the cost amount to the partnership of the property immediately before its distribution. (4) [Repealed, 1998, c. 19, s. 116] Rules on transfers of depreciable property (5) Where subsection 85(1) or 85(2) has applied to a disposition at any time of depreciable property to a person (in this subsection referred to as the “transferee”) and the capital cost to the transferor of the property exceeds the transferor’s proceeds of disposition of the property, for the purposes of sections 13 and 20 and any regulations made for the purpose of paragraph 20(1)(a), (a) the capital cost to the transferee of the property is deemed to be the amount that was its capital cost to the transferor; and (b) the excess is deemed to have been deducted by the transferee under paragraph 20(1)(a) in respect of the property in computing income for taxation years that ended before that time. Acquisition of certain tools — capital cost and deemed depreciation (5.1) If subsection (1) has applied in respect of the acquisition at any particular time of any depreciable property by a corporation from an individual, the cost of the property to the individual was included in computing an amount under paragraph 8(1)(r) or (s) in respect of the individual, and the amount that would be the cost of the property to the individual immediately before the transfer if this Act were read without reference to subsection 8(7) (which amount is in this subsection referred to as the “individual’s original cost”) exceeds the individ­ual’s proceeds of disposition of the property, (a) the capital cost to the corporation of the property is deemed to be equal to the individual’s original cost; and (b) the amount by which the individual’s original cost exceeds the individual’s proceeds of disposition in respect of the property is deemed to have been deducted by the corporation under paragraph 20(1)(a) in respect of the property in computing income for taxation years that ended before that particular time. Time for election (6) Any election under subsection 85(1) or 85(2) shall be made on or before the day that is the earliest of the days on or before which any taxpayer making the election is required to file a return of income pursuant to section 150 for the taxation year in which the transaction to which the election relates occurred. Late filed election (7) Where the election referred to in subsection 85(6) was not made on or before the day on or before which the election was required by that subsection to be made and that day is after May 6, 1974, the election shall be deemed to have been made on that day if, on or before the day that is 3 years after that day, (a) the election is made in prescribed form; and (b) an estimate of the penalty in respect of that election is paid by the taxpayer or the partnership, as the case may be, when that election is made. Special cases (7.1) Where, in the opinion of the Minister, the circumstances of a case are such that it would be just and equitable (a) to permit an election under subsection 85(1) or 85(2) to be made after the day that is 3 years after the day on or before which the election was required by subsection 85(6) to be made, or (b) to permit an election made under subsection 85(1) or 85(2) to be amended, the election or amended election shall be deemed to have been made on the day on or before which the election was so required to be made if (c) the election or amended election is made in prescribed form, and (d) an estima