Income Tax Act — I-3.3 142.51
Definitions 142.51 (1) The following definitions apply for the purposes of this section and subsections 142.5(8.1) and (8.2). base year of a taxpayer means the taxpayer’s taxation year that immediately precedes its transition year. ( année de base ) transition amount of a taxpayer for the taxpayer’s transition year is the positive or negative amount determined by the formula A – B where A is the total of all amounts each of which is the fair market value, at the end of the taxpayer’s base year, of a transition property of the taxpayer; and B is the total of all amounts each of which is the cost amount to the taxpayer, at the end of the taxpayer’s base year, of a transition property of the taxpayer. ( montant transitoire ) transition property of a taxpayer means a property that (a) was a specified debt obligation held by the taxpayer at the end of the taxpayer’s base year; (b) was not a mark-to-market property of the taxpayer for the taxpayer’s base year, but would have been a mark-to-market property of the taxpayer for the taxpayer’s base year if the property had been carried at the property’s fair market value in the taxpayer’s balance sheet as at the end of each taxation year of the taxpayer that ends after the taxpayer last acquired the property (otherwise than by reason of a reacquisition under subsection 142.5(2)) and before the commencement of the taxpayer’s transition year; and (c) was a mark-to-market property of the taxpayer for the transition year of the taxpayer. ( bien transitoire ) transition year of a taxpayer means the taxpayer’s first taxation year that begins after 2022. ( année transitoire ) Transition year income inclusion (2) If a taxpayer is an insurer in its transition year, there shall be included in computing the taxpayer’s income for its transition year the absolute value of the negative amount, if any, of the taxpayer’s transition amount. Transition year income deduction (3) If a taxpayer is an insurer in its transition year, there shall be deducted in computing the taxpayer’s income for its transition year the positive amount, if any, of the taxpayer’s transition amount. Transition year income inclusion reversal (4) If an amount has been included under subsection (2) in computing a taxpayer’s income for its transition year, there shall be deducted in computing the taxpayer’s income for each particular taxation year of the taxpayer that ends after the beginning of the transition year, and in which particular taxation year the taxpayer is an insurer, the amount determined by the formula A × B/1825 where A is the amount included under subsection (2) in computing the taxpayer’s income for the transition year; and B is the number of days in the particular taxation year that are before the day that is 1825 days after the first day of the transition year. Transition year income deduction reversal (5) If an amount has been deducted under subsection (3) in computing a taxpayer’s income for its transition year, there shall be included in computing the taxpayer’s income, for each particular taxation year of the taxpayer ending after the beginning of the transition year, and in which particular taxation year the taxpayer is an insurer, the amount determined by the formula A × B/1825 where A is the amount deducted under subsection (3) in computing the taxpayer’s income for the transition year; and B is the number of days in the particular taxation year that are before the day that is 1825 days after the first day of the transition year. Winding-up (6) If a taxpayer has, in a winding-up to which subsection 88(1) has applied, been wound-up into another corporation (referred to in this subsection as the “parent”), and immediately after the winding-up the parent is an insurer, in applying subsections (4) and (5) in computing the income of the taxpayer and of the parent for particular taxation years that end on or after the first day (referred to in this subsection as the “start day”) on which assets of the taxpayer w