Income Tax Act — I-3.3 142.4
 the obligation that was deducted in computing the taxpayer’s income for a taxation year ending at or before that time in respect of changes in the value of the obligation attributable to the fluctuation in the value of a currency of a country other than Canada relative to Canadian currency, other than an amount deducted under paragraph 142.3(1)(b), (p) an amount in respect of the obligation that was deducted under paragraph 20(1)(p) in computing the taxpayer’s income for a taxation year ending at or before that time, or (q) where the obligation was a capital property of the taxpayer on February 22, 1994, an amount required by paragraph 53(2)(b.2) or 53(2)(g) to be deducted in computing the adjusted cost base of the obligation to the taxpayer on that day; ( montant de base ) transition amount of a taxpayer in respect of the disposition of a specified debt obligation has the meaning assigned by regulation. ( montant de transition ) Scope of section (2) This section applies to the disposition of a specified debt obligation by a taxpayer that is a financial institution, except that this section does not apply to the disposition of a specified debt obligation that is a mark-to-market property for the taxation year in which the disposition occurs. Rules applicable to disposition (3) Where a taxpayer has disposed of a specified debt obligation after February 22, 1994, (a) except as provided by paragraph 79.1(7)(d) or this section, no amount shall be included or deducted in respect of the disposition in computing the taxpayer’s income; and (b) except where the obligation is an indexed debt obligation (other than a prescribed obligation), paragraph 20(14)(a) shall not apply in respect of the disposition. Inclusions and deductions re disposition (4) Subject to subsection 142.4(5), where after 1994 a taxpayer disposes of a specified debt obligation in a taxation year, (a) where the transition amount in respect of the disposition of the obligation is positive, it shall be included in computing the income of the taxpayer for the year; (b) where the transition amount in respect of the disposition of the obligation is negative, the absolute value of the transition amount shall be deducted in computing the income of the taxpayer for the year; (c) where the taxpayer has a gain from the disposition of the obligation, (i) the current amount of the gain shall be included in computing the income of the taxpayer for the year, and (ii) there shall be included in computing the taxpayer’s income for taxation years that end on or after the day of disposition the amount allocated, in accordance with prescribed rules, to the year in respect of the residual portion of the gain; and (d) where the taxpayer has a loss from the disposition of the obligation, (i) the current amount of the loss shall be deducted in computing the taxpayer’s income for the year, and (ii) there shall be deducted in computing the taxpayer’s income for taxation years that end on or after the day of disposition the amount allocated, in accordance with prescribed rules, to the year in respect of the residual portion of the loss. Gain or loss not amortized (5) Where after February 22, 1994 a taxpayer disposes of a specified debt obligation in a taxation year, and (a) the obligation is (i) an indexed debt obligation (other than a prescribed obligation), or (ii) a debt obligation prescribed in respect of the taxpayer, (b) the disposition occurred (i) before 1995, (ii) after 1994 in connection with the transfer of all or part of a business of the taxpayer to a person or partnership, or (iii) because of paragraph 142.6(1)(c), or (c) in the case of a taxpayer other than a life insurance corporation, (i) the disposition occurred before 1996, and (ii) the taxpayer elects in writing, filed with the Minister before July 1997, to have this paragraph apply, the following rules apply: (d) subsection 142.4(4) does not apply to the disposition, (e) there shall be included in computing the taxpayer’