Income Tax Act — I-3.3 39
owing party that is a corporation, (i) the borrowing party, (ii) a corporation resident in Canada of which (A) the borrowing party is a subsidiary wholly-owned corporation, or (B) a corporation described in this paragraph is a subsidiary wholly-owned corporation, (iii) a corporation resident in Canada (A) each share of the capital stock of which is owned by (I) the borrowing party, or (II) a corporation that is described in this subparagraph or subparagraph (ii), or (B) all or substantially all of the capital stock of which is owned by one or more corporations resident in Canada that are borrowing parties in respect of the creditor affiliate because of subsection 90(7), or (iv) a partnership each member of which is (A) a corporation described in any of subparagraphs (i) to (iii), or (B) another partnership described in this subparagraph; and (b) in the case of a borrowing party that is a partnership, (i) the borrowing party, (ii) if each member — determined as if each member of a partnership that is a member of another partnership is a member of that other partnership — of the borrowing party is either a particular corporation resident in Canada (in this paragraph referred to as the “parent”) or a corporation resident in Canada that is a subsidiary wholly-owned corporation , as defined in subsection 87(1.4), of the parent, (A) the parent, or (B) a corporation resident in Canada that is a subsidiary wholly-owned corporation , as defined in subsection 87(1.4), of the parent, or (iii) a partnership each member of which is any of (A) the borrowing party, (B) a corporation described in subparagraph (ii), and (C) another partnership described in this subparagraph. Upstream loan — transitional set-off election (2.3) Subsection (2.1) and paragraph 95(2)(g.04) do not apply in respect of a repayment, in whole or in part, of a loan or indebtedness if an election has been filed with the Minister before 2019 jointly by (a) the borrowing party; (b) if the creditor is a creditor affiliate, each qualifying entity of which the creditor affiliate is a foreign affiliate; and (c) if the creditor is a creditor partnership, each qualifying entity of which a member of the creditor partnership is a foreign affiliate. Gain in respect of purchase of bonds, etc., by issuer (3) Where a taxpayer has issued any bond, debenture or similar obligation and has at any subsequent time in a taxation year and after 1971 purchased the obligation in the open market, in the manner in which any such obligation would normally be purchased in the open market by any member of the public, (a) the amount, if any, by which the amount for which the obligation was issued by the taxpayer exceeds the purchase price paid or agreed to be paid by the taxpayer for the obligation shall be deemed to be a capital gain of the taxpayer for the taxation year from the disposition of a capital property, and (b) the amount, if any, by which the purchase price paid or agreed to be paid by the taxpayer for the obligation exceeds the greater of the principal amount of the obligation and the amount for which it was issued by the taxpayer shall be deemed to be a capital loss of the taxpayer for the taxation year from the disposition of a capital property, to the extent that the amount determined under paragraph 39(3)(a) or 39(3)(b) would not, if section 3 were read in the manner described in paragraph 39(1)(a) and this Act were read without reference to subsections 80(12) and 80(13), be included or be deductible, as the case may be, in computing the taxpayer’s income for the year or any other taxation year. Election concerning disposition of Canadian securities (4) Except as provided in subsection 39(5), where a Canadian security has been disposed of by a taxpayer in a taxation year and the taxpayer so elects in prescribed form in the taxpayer’s return of income under this Part for that year, (a) every Canadian security owned by the taxpayer in that year or any subsequent taxation year shall be