Income Tax Act — I-3.3 110.6
he cost to the elector of the property immediately before the disposition referred to in subparagraph 110.6(19)(a)(i), (B) where an amount would, if the disposition referred to in subparagraph 110.6(19)(a)(i) were a disposition for the purpose of section 7 or 35, be included under that section as a result of the disposition in computing the income of the elector, the lesser of (I) the elector’s proceeds of disposition of the property determined under subparagraph 110.6(19)(a)(i), and (II) the amount determined by the formula A - B where A is the amount, if any, by which the fair market value of the property at that time exceeds the amount that would, if the disposition referred to in subparagraph 110.6(19)(a)(i) were a disposition for the purpose of section 7 or 35, be included under that section as a result of the disposition in computing the income of the elector, and B is the amount that would be determined by the formula in subclause 110.6(19)(a)(ii)(C)(II) in respect of the property if clause 110.6(19)(a)(ii)(C) applied to the property, and (C) in any other case, the lesser of (I) the designated amount, and (II) the amount, if any, by which the fair market value of the property at that time exceeds the amount determined by the formula A - 1.1B where A is the designated amount, and B is the fair market value of the property at that time; (b) a business carried on by the elector (otherwise than as a member of a partnership) on February 22, 1994, (i) the amount that would be determined under subparagraph 14(1)(a)(v) at the end of that day in respect of the elector if (A) all the eligible capital property owned at that time by the elector in respect of the business were disposed of by the elector immediately before that time for proceeds of disposition equal to the amount designated in the election in respect of the business, and (B) the fiscal period of the business ended at that time shall be deemed to be a taxable capital gain of the elector for the taxation year in which the fiscal period of the business that includes that time ends from the disposition of a particular property and, for the purposes of this section, the particular property shall be deemed to have been disposed of by the elector at that time, and (ii) for the purpose of paragraph 14(3)(b), the amount of the taxable capital gain determined under subparagraph 110.6(19)(b)(i) shall be deemed to have been claimed, by a person who does not deal at arm’s length with each person or partnership that does not deal at arm’s length with the elector, as a deduction under this section in respect of a disposition at that time of the eligible capital property; and (c) an interest owned at the end of February 22, 1994 by the elector in a trust referred to in any of paragraphs (f) to (j) of the definition flow-through entity in subsection 39.1(1), the elector shall be deemed to have a capital gain for the year from the disposition on February 22, 1994 of property equal to the lesser of (i) the total of amounts designated in elections made under this subsection by the elector in respect of interests in the trust, and (ii) 4/3 of the amount that would, if all of the trust’s capital properties were disposed of at the end of February 22, 1994 for proceeds of disposition equal to their fair market value at that time and that portion of the trust’s capital gains and capital losses or its net taxable capital gains, as the case may be, arising from the dispositions as can reasonably be considered to represent the elector’s share thereof were allocated to or designated in respect of the elector, be the increase in the annual gains limit of the elector for the 1994 taxation year as a result of the dispositions. Application of subsection (19) (20) Subsection 110.6(19) applies to a property or to a business, as the case may be, of an elector only if (a) where the elector is an individual (other than a trust), (i) its application to all of the properties in respect of which elections w