Income Tax Application Rules — I-3.31 26
ct of the interest, throughout the period beginning at the beginning of that fiscal period and ending at the time the taxpayer acquired the interest, the same position in relation to the partnership as the taxpayer would have had in relation thereto if, throughout that period, the taxpayer had been the owner of the interest. Amounts deemed to be required to be deducted in respect of interest in partnership (9.3) For the purpose of computing, at any particular time after 1971, the adjusted cost base to a taxpayer of an interest in a partnership of which the taxpayer was a member on December 31, 1971 and thereafter without interruption until the particular time, the lesser of (a) the amount, if any, by which (i) the total of all amounts in respect of the interest determined under paragraph (9.1)(d) exceeds (ii) the total of (A) the taxpayer’s share, determined at the beginning of the first fiscal period of the partnership ending after 1971, of the tax equity of the partnership at the particular time, and (B) the amount in respect of the interest determined under paragraph (9.1)(b), and (b) the amount, if any, by which (i) the total of all amounts in respect of the interest determined as of the particular time under paragraphs 14(e) to (g) exceeds (ii) the total of all amounts in respect of the interest determined as of the particular time under paragraphs 14(a) to (d), shall be deemed to be required by subsection 53(2) of the amended Act to be deducted. Application of s. 53 of amended Act in respect of interest in partnership (9.4) For the purpose of computing, at any particular time after 1971, the adjusted cost base to a taxpayer of an interest in a partnership of which the taxpayer was a member on December 31, 1971 and thereafter without interruption until the particular time, (a) the reference in clause 53(1)(e)(i)(B) of the amended Act to “relating to” shall be read as a reference to “relating to section 14 or to”; and (b) clause 53(2)(c)(i)(B) of the amended Act shall be read as follows: “(B) paragraphs 12(1)(o) and (z.5), 18(1)(m) and 20(1)(v.1), section 31, subsection 40(2), section 55 and subsections 69(6) and (7) of this Act, paragraphs 20(1)(gg) and 81(1)(r) and (s) of the Income Tax Act , chapter 148 of the Revised Statutes of Canada, 1952, and the provisions of the Income Tax Application Rules relating to section 14, and” Where paragraph 128.1(1)(b) of amended Act applies (10) Where subsection 48(3) of the amended Act, as it read in its application before 1993, or paragraph 128.1(1)(b) of the amended Act applies for the purpose of determining the cost to a taxpayer of any property, this section does not apply for that purpose. Fair market value of publicly-traded securities (11) For the purposes of this section, the fair market value on valuation day of any property prescribed to be a publicly-traded share or security shall be deemed to be the greater of the amount, if any, prescribed in respect of that property and the fair market value of that property, otherwise determined, on valuation day. Fair market value of share of foreign affiliate (11.1) For the purposes of computing the fair market value (a) on December 31, 1971, or (b) at any subsequent time for the purposes of subsection (4), of any shares owned by a taxpayer resident in Canada of the capital stock of a foreign affiliate of the taxpayer, the fair market value at that time of any asset owned by the foreign affiliate at that time (c) that was subsequently acquired by the taxpayer from the foreign affiliate (i) as a dividend payable in kind, (ii) as a benefit the amount of which was deemed by paragraph 80.1(4)(b) of the amended Act to have been received by the taxpayer as a dividend from the foreign affiliate, or (iii) as consideration for the settlement or extinguishment of an obligation described in subsection 80.1(5) of the amended Act, and (d) in respect of which subsection 80.1(4) or (5), as the case may be, of the amended Act applies because of an e