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56. (1) Subparagraph 20(1)(b)(i) of the
Income Tax Application Rules is replaced by
the following:
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(i) for the purposes of the amended Act
(other than, where paragraph 13(7)(e) of
that Act applies in determining the
capital cost to that other taxpayer of the
property, for the purposes of paragraphs
8(1)(j) and (p) and sections 13 and 20 of
that Act), that other taxpayer shall be
deemed to have acquired the property at
a capital cost equal to the proceeds
deemed to have been received for the
property by the person from whom that
other taxpayer acquired the property, and
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(2) Subsection 20(1) of the Rules is
amended by striking out the word ``and'' at
the end of paragraph (a), by adding the
word ``and'' at the end of paragraph (b) and
by adding the following after
paragraph (b):
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(c) where the taxpayer is deemed by
subsection 110.6(19) of the amended Act to
have reacquired the property,
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(i) for the purposes of that Act (other
than, where paragraph 13(7)(e) of that
Act applies in determining the capital
cost to the taxpayer of the property, for
the purposes of paragraphs 8(1)(j) and (p)
and sections 13 and 20 of that Act), the
taxpayer shall be deemed to have
reacquired the property at a capital cost
equal to the taxpayer's proceeds of
disposition of the property determined
under paragraph (a) in respect of the
disposition that immediately preceded
the reacquisition, and
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(ii) for the purposes of this subsection,
the taxpayer's capital cost of the property
after the reacquisition shall be deemed to
be equal to the taxpayer's capital cost of
the property before the reacquisition and
the taxpayer shall be considered to have
owned the property without interruption
from December 31, 1971 until such time
after February 22, 1994 as the taxpayer
disposes of it.
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(3) Subsection (1) applies to acquisitions
of property that occur after May 22, 1985.
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(4) Subsection (2) applies to the 1994 and
subsequent taxation years.
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57. Section 26 of the Rules is amended by
adding the following after subsection (28):
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| Effect of
election under
subsection
110.6(19)
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(29) Where subsection 110.6(19) of the
amended Act applies to a particular property,
for the purposes of determining the cost and
the adjusted cost base to a taxpayer of any
property at any time after February 22, 1994,
the particular property shall be deemed not to
have been owned by any taxpayer on
December 31, 1971.
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