``specified debt obligation'' « titre de créance déterminé »	``specified debt obligation'' of a taxpayer means the interest held by the taxpayer in
	(a) a loan, bond, debenture, mortgage, note, agreement of sale or any other similar indebtedness, or
	(b) a debt obligation, where the taxpayer purchased the interest,
	other than an interest in an income bond, an income debenture, a small business development bond, a small business bond or a prescribed property.
Significant interest	(2) For the purpose of subsection (5) and the definition ``mark-to-market property'' in subsection (1), a taxpayer has a significant interest in a corporation at any time if
	(a) the taxpayer is related (otherwise than because of a right referred to in paragraph 251(5)(b)) to the corporation at that time; or
	(b) the taxpayer holds, at that time,
	(i) shares of the corporation that give the taxpayer 10% or more of the votes that could be cast under all circumstances at an annual meeting of shareholders of the corporation, and
	(ii) shares of the corporation having a fair market value of 10% or more of the fair market value of all the issued shares of the corporation.
Rules re significant interest	(3) For the purpose of determining under subsection (2) whether a taxpayer has a significant interest in a corporation at any time,
	(a) the taxpayer shall be deemed to hold each share that is held at that time by a person or partnership to whom the taxpayer is related (otherwise than because of a right referred to in paragraph 251(5)(b));
	(b) a share of the corporation acquired by the taxpayer by reason of the default of a debtor shall be disregarded where it is reasonable to consider that the share is being retained for the purpose of minimizing any losses in respect of the debtor's default; and
	(c) a share of the corporation that is prescribed in respect of the taxpayer shall be disregarded.
Extension of meaning of ``related''	(4) For the purposes of this subsection and subsections (2) and (3), a person or partnership shall be deemed to be related to a person or partnership where they would be related if, for the purpose of section 251,
	(a) every partnership and trust were considered to be a corporation;
	(b) subject to paragraph (c), all decisions relating to the conduct of a trust were made by majority vote of the beneficiaries of the trust, with each beneficiary having, at any time, a number of votes equal to the number determined by the formula
	100 x A B
	where
	A is the fair market value at that time of the beneficiary's beneficial interest in the trust, and
	B is the total of all amounts each of which is the fair market value at that time of a beneficial interest in the trust; and
	(c) where the amount that would be determined for B in paragraph (b) in respect of a trust is nil, the trust were considered not to be controlled by any person, partnership or group each member of which is a person or partnership.
Significant interest - transition	(5) For the purpose of the definition ``mark-to-market property'' in subsection (1), where
	(a) on October 31, 1994, a taxpayer whose 1994 taxation year ends after October 30, 1994 held a share of a corporation in which the taxpayer did not have a significant interest at any time in the year, and
	(b) at any time after the end of the year and before May 1995, the taxpayer has a significant interest in the corporation,
	the taxpayer has a significant interest in the corporation in the year and in any subsequent taxation year ending before the earliest time referred to in paragraph (b).
	Income from Specified Debt Obligations
Amounts to be included and deducted	142.3 (1) Subject to subsection (2), where a taxpayer that is, in a taxation year, a financial institution holds a specified debt obligation at any time in the year,
	(a) there shall be included in computing the income of the taxpayer for the year the amount, if any, prescribed in respect of the obligation;
	(b) there shall be deducted in computing the income of the taxpayer for the year the amount, if any, prescribed in respect of the obligation; and
	(c) except as provided by this subsection, paragraphs 12(1)(d) and (i) and 20(1)(l) and (p) and section 142.4, no amount shall be included or deducted in respect of payments under the obligation (other than fees and similar amounts) in computing the income of the taxpayer for the year.
Exception for certain obligations	(2) Subsection (1) does not apply for a taxation year in respect of a specified debt obligation of a taxpayer that is
	(a) a mark-to-market property for the year; or
	(b) an indexed debt obligation, other than a prescribed obligation.
	Disposition of Specified Debt Obligations
Definitions	142.4 (1) In this section,
``tax basis'' « montant de base »	``tax basis'' of a specified debt obligation at any time to a taxpayer means the amount, if any, by which the total of all amounts each of which is
	(a) the cost of the obligation to the taxpayer,
	(b) an amount included under subsection 12(3) or 16(2) or (3) or paragraph 142.3(1)(a) in respect of the obligation in computing the taxpayer's income for a taxation year beginning before that time,
	(c) subject to subsection 138(13), where the taxpayer acquired the obligation in a taxation year ending before February 23, 1994, the part of the amount, if any, by which
	(i) the principal amount of the obligation at the time it was acquired
	exceeds
	(ii) the cost to the taxpayer of the obligation
	that was included in computing the taxpayer's income for a taxation year ending before February 23, 1994,
	(d) subject to subsection 138(13), where the taxpayer is a life insurer, an amount in respect of the obligation that was deemed by paragraph 142(3)(a) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, as it read in its application to the 1977 taxation year, to be a gain for a taxation year ending before 1978,
	(e) where the obligation is an indexed debt obligation, an amount determined under subparagraph 16(6)(a)(i) in respect of the obligation and included in computing the income of the taxpayer for a taxation year beginning before that time,
	(f) an amount in respect of the obligation that was included in computing the taxpayer's income for a taxation year ending at or before that time in respect of changes in the value of the obligation attributable to the fluctuation in the value of a currency of a country other than Canada relative to Canadian currency, other than an amount included under paragraph 142.3(1)(a),
	(g) an amount in respect of the obligation that was included under paragraph 12(1)(i) in computing the taxpayer's income for a taxation year beginning before that time, or
	(h) where the obligation was a capital property of the taxpayer on February 22, 1994, an amount required by paragraph 53(1)(f) or (f.1) to be added in computing the adjusted cost base of the obligation to the taxpayer on that day
	exceeds the total of all amounts each of which is
	(i) an amount deducted under paragraph 142.3(1)(b) in respect of the obligation in computing the taxpayer's income for a taxation year beginning before that time,
	(j) the amount of a payment (other than proceeds of disposition of the obligation) received by the taxpayer under the obligation at or before that time in respect of an amount included by any of paragraphs (a) to (f) in determining the tax basis of the obligation to the taxpayer at that time,
	(k) subject to subsection 138(13), where the taxpayer acquired the obligation in a taxation year ending before February 23, 1994, the part of the amount, if any, by which
	(i) the cost to the taxpayer of the obligation
	exceeds
	(ii) the principal amount of the obligation at the time it was acquired
	that was deducted in computing the taxpayer's income for a taxation year ending before February 23, 1994,
	(l) subject to subsection 138(13), where the taxpayer is a life insurer, an amount in respect of the obligation that was deemed by paragraph 142(3)(b) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, as it read in its application to the 1977 taxation year, to be a loss for a taxation year ending before 1978,
	(m) an amount that was deducted under subsection 20(14) in respect of the obligation in computing the taxpayer's income for a taxation year beginning before that time,
	(n) where the obligation is an indexed debt obligation, an amount determined under subparagraph 16(6)(a)(ii) in respect of the obligation and deducted in computing the income of the taxpayer for a taxation year beginning before that time,
	(o) an amount in respect of the obligation that was deducted in computing the taxpayer's income for a taxation year ending at or before that time in respect of changes in the value of the obligation attributable to the fluctuation in the value of a currency of a country other than Canada relative to Canadian currency, other than an amount deducted under paragraph 142.3(1)(b),
	(p) an amount in respect of the obligation that was deducted under paragraph 20(1)(p) in computing the taxpayer's income for a taxation year ending at or before that time, or
	(q) where the obligation was a capital property of the taxpayer on February 22, 1994, an amount required by paragraph 53(2)(b.2) or (g) to be deducted in computing the adjusted cost base of the obligation to the taxpayer on that day;
``transition amount'' « montant de transition »	``transition amount'' of a taxpayer in respect of the disposition of a specified debt obligation has the meaning assigned by regulation.
Scope of section	(2) This section applies to the disposition of a specified debt obligation by a taxpayer that is a financial institution, except that this section does not apply to the disposition of a specified debt obligation that is a mark-to-market property for the taxation year in which the disposition occurs.
Rules applicable to disposition	(3) Where a taxpayer has disposed of a specified debt obligation after February 22, 1994,
	(a) except as provided by this section, no amount shall be included or deducted in respect of the disposition in computing the income of the taxpayer; and
	(b) except where the obligation is an indexed debt obligation (other than a prescribed obligation), paragraph 20(14)(a) shall not apply in respect of the disposition.
Inclusions and deductions re disposition	(4) Subject to subsection (5), where after 1994 a taxpayer has, in a taxation year, disposed of a specified debt obligation,
	(a) where the current amount in respect of the disposition of the obligation is positive, it shall be included in computing the income of the taxpayer for the year;
	(b) where the current amount in respect of the disposition of the obligation is negative, it shall be deducted in computing the income of the taxpayer for the year;
	(c) where the taxpayer has a gain from the disposition of the obligation, there shall be included in computing the taxpayer's income for taxation years that end on or after the day of disposition the amount allocated, in accordance with prescribed rules, to the year in respect of the residual portion of the gain; and
	(d) where the taxpayer has a loss from the disposition of the obligation, there shall be deducted in computing the taxpayer's income for taxation years that end on or after the day of disposition the amount allocated, in accordance with prescribed rules, to the year in respect of the residual portion of the loss.
Gain or loss not amortized	(5) Where a taxpayer has, in a taxation year and after February 22, 1994, disposed of a specified debt obligation, and either
	(a) the obligation is
	(i) an indexed debt obligation (other than a prescribed obligation), or
	(ii) a debt obligation prescribed in respect of the taxpayer, or
	(b) the disposition occurred
	(i) before 1995,
	(ii) after 1994 in connection with the transfer of all or part of a business of the taxpayer to a person or partnership, or
	(iii) because of paragraph 142.6(1)(c),
	the following rules apply:
	(c) subsection (4) does not apply to the disposition,
	(d) where the taxpayer has a gain from the disposition of the obligation, the gain shall be included in computing the income of the taxpayer for the year, and
	(e) where the taxpayer has a loss from the disposition of the obligation, the loss shall be deducted in computing the income of the taxpayer for the year.
Gain or loss from disposition of obligation	(6) For the purposes of this section,
	(a) where the amount determined under paragraph (c) in respect of the disposition of a specified debt obligation by a taxpayer is positive, that amount is the taxpayer's gain from the disposition of the obligation;
	(b) where the amount determined under paragraph (c) in respect of the disposition of a specified debt obligation by a taxpayer is negative, that amount is the taxpayer's loss from the disposition of the obligation; and
	(c) the amount determined under this paragraph in respect of the disposition of a specified debt obligation by a taxpayer is the positive or negative amount determined by the formula
	A - (B + C)
	where
	A is the taxpayer's proceeds of disposition,
	B is the tax basis of the obligation to the taxpayer immediately before the time of disposition, and
	C is
	(i) where subsection (4) applies to the disposition, the taxpayer's transition amount in respect of the disposition, and
	(ii) in any other case, nil.