Income Tax Act — I-3.3 112
s not deal at arm’s length; and (c) financial institution , mark-to-market property and tracking property have the same meaning as in subsection 142.2(1). Interpretation — qualified dividend (6.1) For the purposes of this section, a dividend on a share is a qualified dividend to the extent that (a) it is a dividend other than a dividend received under subsection 84(3); or (b) it is received under subsection 84(3) and, (i) if the share is held by an individual other than a trust, the dividend is received by the individual, (ii) if the share is held by a corporation, the dividend is received by the corporation while it is a private corporation, and is paid by another private corporation, (iii) if the share is held by a trust, (A) the dividend is received by the trust, (B) the dividend is designated under subsection 104(19) by the trust in respect of a beneficiary and (I) the beneficiary is an individual other than a trust, (II) the beneficiary is a private corporation when the dividend is received by it and the dividend is paid by another private corporation, (III) the beneficiary is another trust that does not designate the dividend under subsection 104(19), or (IV) the beneficiary is a partnership all of the members of which are, when the dividend is received, a person described by any of subclauses (I) to (III), or (C) the dividend is designated by the trust under subsection 104(19) in respect of a beneficiary that is another trust or a partnership and the trust establishes that the dividend is received by a person described by any of subclauses (B)(I) to (III), and (iv) if the share is held by a partnership, (A) the dividend is included in the income of a member of a partnership and (I) the member is an individual, or (II) the member is a private corporation when the dividend is received by it and the dividend is paid by another private corporation, or (B) the dividend is designated under subsection 104(19) by a member of a partnership that is a trust in respect of a beneficiary described by any of subclauses (iii)(B)(I) to (IV) or is described by clause (iii)(C). Rules where shares exchanged (7) Where a share (in this subsection referred to as the “new share”) has been acquired in exchange for another share (in this subsection referred to as the “old share”) in a transaction to which section 51, 85.1, 86 or 87 applies, for the purposes of the application of any of subsections 112(3) to 112(3.32) in respect of a disposition of the new share, the new share is deemed to be the same share as the old share, except that (a) any dividend received on the old share is deemed for those purposes to have been received on the new share only to the extent of the proportion of the dividend that (i) the shareholder’s adjusted cost base of the new share immediately after the exchange is of (ii) the shareholder’s adjusted cost base of all new shares immediately after the exchange acquired in exchange for the old share; and (b) the amount, if any, by which a loss from the disposition of the new share is reduced because of the application of this subsection shall not exceed the proportion of the shareholder’s adjusted cost base of the old share immediately before the exchange that (i) the shareholder’s adjusted cost base of the new share immediately after the exchange is of (ii) the shareholder’s adjusted cost base of all new shares, immediately after the exchange, acquired in exchange for the old share. Synthetic disposition  — holding period (8) If a synthetic disposition arrangement is entered into in respect of a property owned by a taxpayer and the synthetic disposition period of the arrangement is 30 days or more, for the purposes of paragraphs (3.01)(b) and (3.11)(b), subclauses (3.2)(a)(ii)(C)(I) and (3.3)(a)(ii)(C)(I) and paragraphs (3.31)(b), (3.32)(b), (4.01)(b), (4.11)(b), (4.21)(b), (4.22)(b), (5.1)(b) and (5.21)(b) and subsection (9), the taxpayer is deemed not to own the property during the synthetic disposition period. Exceptio