9. (1) Subsection 37(1) of the Act is amended by adding the following after paragraph (f):
	(f.1) the total of all amounts each of which is the lesser of
	(i) the amount deducted under section 61.3 in computing the taxpayer's income for a preceding taxation year, and
	(ii) the amount, if any, by which the amount that was deductible under this subsection in computing the taxpayer's income for that preceding year exceeds the amount claimed under this subsection in computing the taxpayer's income for that preceding year,
	(2) Subsection (1) applies to taxation years that end after February 21, 1994.
	10. (1) The portion of subsection 39(3) of the Act after paragraph (b) is replaced by the following:
	to the extent that the amount determined under paragraph (a) or (b) would not, if section 3 were read in the manner described in paragraph (1)(a) and this Act were read without reference to subsections 80(12) and (13), be included or be deductible, as the case may be, in computing the taxpayer's income for the year or any other taxation year.
	(2) Subsection (1) applies to taxation years that end after February 21, 1994.
	11. (1) Clause 40(1)(a)(iii)(C) of the Act is replaced by the following:
	(C) a reasonable amount as a reserve in respect of such of the proceeds of disposition of the property that are payable to the taxpayer after the end of the year as can reasonably be regarded as a portion of the amount determined under subparagraph (i) in respect of the property, and
	(2) Subsection 40(2) of the Act is amended by adding the following after paragraph (e):
	(e.1) a taxpayer's loss, if any, from the disposition at any time to a particular person or partnership of an obligation that was, immediately after that time, payable by another person or partnership to the particular person or partnership is nil where the taxpayer, the particular person or partnership and the other person or partnership are related to each other at that time or would be related to each other at that time if paragraph 80(2)(j) applied for the purpose of this paragraph;
	(e.2) a taxpayer's loss on the settlement or extinguishment of a particular commercial obligation (in this paragraph having the meaning assigned by subsection 80(1)) issued by a person or partnership and payable to the taxpayer shall, where any part of the consideration given by the person or partnership for the settlement or extinguishment of the particular obligation consists of one or more other commercial obligations issued by the person or partnership to the taxpayer, be deemed to be the amount determined by the formula
	A x (B - C) B
	where
	A is the amount, if any, that would be the taxpayer's loss from the disposition of the particular obligation if this Act were read without reference to this paragraph,
	B is the total fair market value of all the consideration given by the person or partnership for the settlement or extinguishment of the particular obligation, and
	C is the total fair market value of the other obligations;
	(3) Subsection (1) applies to taxation years that end after February 21, 1994.
	(4) Paragraph 40(2)(e.1) of the Act, as enacted by subsection (2), applies to dispositions that occur after July 12, 1994, other than dispositions pursuant to agreements in writing entered into before July 13, 1994.
	(5) Paragraph 40(2)(e.2) of the Act, as enacted by subsection (2), applies to dispositions that occur after December 20, 1994, other than dispositions pursuant to agreements in writing entered into before December 21, 1994.
	12. (1) Clause 44(1)(e)(iii)(C) of the Act is replaced by the following:
	(C) a reasonable amount as a reserve in respect of such of the proceeds of disposition of the former property that are payable to the taxpayer after the end of the particular year as can reasonably be regarded as a portion of the amount determined under subparagraph (i) in respect of the property, and
	(2) Subsection (1) applies to taxation years that end after February 21, 1994.
	13. (1) Subsection 47(1) of the Act is amended by striking out the word ``and'' at the end of paragraph (a) and by adding the following after paragraph (b):
	(c) there shall be deducted, after the particular time, in computing the adjusted cost base to the taxpayer of each such identical property, the amount determined by the formula
	A B
	where
	A is the total of all amounts deducted under paragraph 53(2)(g.1) in computing immediately before the particular time the adjusted cost base to the taxpayer of the previously-acquired properties, and
	B is the number of such identical properties owned by the taxpayer immediately after the particular time or, where subsection (2) applies, the quotient determined under that subsection in respect of the acquisition; and
	(d) there shall be added, after the particular time, in computing the adjusted cost base to the taxpayer of each such identical property the amount determined under paragraph (c) in respect of the identical property.
	(2) Subsection (1) applies to taxation years that end after February 21, 1994.
	14. (1) Section 49 of the Act is amended by adding the following after subsection (3):
Option to acquire specified property exercised	(3.01) Where at any time a taxpayer exercises an option to acquire a specified property,
	(a) there shall be deducted after that time in computing the adjusted cost base to the taxpayer of the specified property the total of all amounts deducted under paragraph 53(2)(g.1) in computing, immediately before that time, the adjusted cost base to the taxpayer of the option; and
	(b) the amount determined under paragraph (a) in respect of that acquisition shall be added after that time in computing the adjusted cost base to the taxpayer of the specified property.
	(2) Subsection (1) applies to taxation years that end after February 21, 1994.
	15. (1) The portion of subsection 50(1) of the Act after subparagraph (b)(ii) is replaced by the following:
	(iii) at the end of the year,
	(A) the corporation is insolvent,
	(B) neither the corporation nor a corporation controlled by it carries on business,
	(C) the fair market value of the share is nil, and
	(D) it is reasonable to expect that the corporation will be dissolved or wound up and will not commence to carry on business
	and the taxpayer elects in the taxpayer's return of income for the year to have this subsection apply in respect of the debt or the share, as the case may be, the taxpayer shall be deemed to have disposed of the debt or the share, as the case may be, at the end of the year for proceeds equal to nil and to have reacquired it immediately after the end of the year at a cost equal to nil.
	(2) Subsection (1) applies to taxation years that end after February 21, 1994.
	16. (1) Subsection 51(1) of the Act is amended by adding the following after paragraph (d):
	(d.1) there shall be deducted, after the exchange, in computing the adjusted cost base to the taxpayer of a share acquired by the taxpayer on the exchange, the amount determined by the formula
	A x B C
	where
	A is the total of all amounts deducted under paragraph 53(2)(g.1) in computing, immediately before the exchange, the adjusted cost base to the taxpayer of the convertible property,
	B is the fair market value, immediately after the exchange, of that share, and
	C is the fair market value, immediately after the exchange, of all the shares acquired by the taxpayer on the exchange,
	(d.2) the amount determined under paragraph (d.1) in respect of a share shall be added, after the exchange, in computing the adjusted cost base to the taxpayer of the share,
	(2) Subsection (1) applies to taxation years that end after February 21, 1994.
	17. (1) Paragraph 53(1)(f.1) of the Act is replaced by the following:
	(f.1) where the taxpayer is a taxable Canadian corporation and the property was disposed of by another taxable Canadian corporation to the taxpayer in circumstances such that paragraph (f.2) does not apply so as to increase the adjusted cost base to the other corporation of shares of the capital stock of the taxpayer and the capital loss from the disposition was deemed by paragraph 40(2)(e) or (e.1) or 85(4)(a) to be nil, the amount that would otherwise have been the capital loss from the disposition;
	(f.11) where the property was disposed of by a person (other than a non-resident person or a person exempt from tax under this Part on the person's taxable income) or by an eligible Canadian partnership (within the meaning assigned by subsection 80(1)) to the taxpayer in circumstances such that paragraph (f.1) does not apply so as to increase the adjusted cost base to the taxpayer of the property, paragraph (f.2) does not apply so as to increase the adjusted cost base to that person of shares of the capital stock of the taxpayer and the capital loss from the disposition was deemed by paragraph 40(2)(e.1) or 85(4)(a) to be nil, the amount that would otherwise be the capital loss from the disposition;
	(f.12) where the property is a particular commercial obligation (in this paragraph having the meaning assigned by subsection 80(1)) payable to the taxpayer as consideration for the settlement or extinguishment of another commercial obligation payable to the taxpayer and the taxpayer's loss from the disposition of the other obligation was reduced because of paragraph 40(2)(e.2), the proportion of the reduction that the principal amount of the particular obligation is of the total of all amounts each of which is the principal amount of a commercial obligation payable to the taxpayer as consideration for the settlement or extinguishment of that other obligation;
	(2) Subsection 53(1) of the Act is amended by striking out the word ``and'' at the end of paragraph (o), by adding the word ``and'' at the end of paragraph (p) and by adding the following after paragraph (p):
	(q) any amount required under paragraph (4)(b), (5)(b), (6)(b), 47(1)(d), 49(3.01)(b), 51(1)(d.2), 86(4)(b) or 87(5.1)(b) or (6.1)(b) to be added in computing the adjusted cost base to the taxpayer of the property.
	(3) Subsection 53(2) of the Act is amended by adding the following after paragraph (g):
	(g.1) any amount required under paragraph (4)(a), (5)(a), (6)(a), 47(1)(c), 49(3.01)(a), 51(1)(d.1), 86(4)(a) or 87(5.1)(a) or (6.1)(a) to be deducted in computing the adjusted cost base to the taxpayer of the property or any amount by which that adjusted cost base is required to be reduced because of subsection 80(9), (10) or (11);
	(4) Section 53 of the Act is amended by adding the following after subsection (3):
Recomputa- tion of adjusted cost base on transfers and deemed dispositions	(4) Where at any time in a taxation year a person or partnership (in this subsection referred to as the ``vendor'') disposes of a specified property and the proceeds of disposition of the property are determined under paragraph 48.1(1)(c), section 70 or 73, subsection 85(1), paragraph 85.1(1)(a), 87(4)(a) or (c) or 88(1)(a), subsection 97(2) or 98(2), paragraph 98(3)(f) or (5)(f), subsection 104(4), paragraph 107(2)(a), (2.1)(a), (4)(d) or (5)(a) or 111(4)(e) or section 128.1,
	(a) there shall be deducted after that time in computing the adjusted cost base to the person or partnership (in this subsection referred to as the ``transferee'') who acquires or reacquires the property at or immediately after that time the amount, if any, by which
	(i) the total of all amounts deducted under paragraph (2)(g.1) in computing, immediately before that time, the adjusted cost base to the vendor of the property,
	exceeds
	(ii) the amount that would be the vendor's capital gain for the year from that disposition if this Act were read without reference to subparagraph 40(1)(a)(iii) and subsection 100(2); and
	(b) the amount determined under paragraph (a) in respect of that disposition shall be added after that time in computing the adjusted cost base to the transferee of the property.
Recomputa- tion of adjusted cost base on other transfers	(5) Where at any time in a taxation year a person or partnership (in this subsection referred to as the ``vendor'') disposes of a specified property to another person or partnership (in this subsection referred to as the ``transferee''), the vendor and the transferee do not deal with each other at arm's length (or would not deal with each other at arm's length if paragraph 80(2)(j) applied for the purpose of this subsection) and the proceeds of disposition of the property at that time are not determined under any of the provisions referred to in subsection (4),
	(a) there shall be deducted after that time in computing the adjusted cost base to the transferee of the property the amount, if any, by which
	(i) the total of all amounts deducted under paragraph (2)(g.1) in computing, immediately before that time, the adjusted cost base to the vendor of the property
	exceeds
	(ii) the amount that would be the vendor's capital gain for the year from that disposition if this Act were read without reference to subparagraph 40(1)(a)(iii) and subsection 100(2); and
	(b) the amount determined under paragraph (a) in respect of that disposition shall be added after that time in computing the adjusted cost base to the transferee of the property.
Recomputa- tion of adjusted cost base on amalgamation	(6) Where a capital property that is a specified property is acquired by a new corporate entity at any time as a result of the amalgamation or merger of 2 or more predecessor corporations,
	(a) there shall be deducted after that time in computing the adjusted cost base to the new entity of the property the total of all amounts deducted under paragraph (2)(g.1) in computing, immediately before that time, the adjusted cost base to a predecessor corporation of the property, unless those amounts are otherwise deducted under that paragraph in computing the adjusted cost base to the new entity of the property; and
	(b) the amount deducted under paragraph (a) in respect of the acquisition shall be added after that time in computing the adjusted cost base to the new entity of the property.
	(5) Subsections (1) to (4) apply to taxation years that end after February 21, 1994.
	18. (1) Paragraph (h) of the definition ``proceeds of disposition'' in section 54 of the Act is replaced by the following:
	(h) any amount included in computing a taxpayer's proceeds of disposition of the property because of section 79, and
	(2) Paragraph (e) of the definition ``superficial loss'' in section 54 of the Act is replaced by the following:
	(e) was a disposition of property by the taxpayer to which paragraph 40(2)(e.1) or subsection 85(4) applies.
	(3) Section 54 of the Act is amended by adding the following in alphabetical order:
``specified property'' « bien déterminé »	``specified property'' of a taxpayer is capital property of the taxpayer that is
	(a) a share,
	(b) a capital interest in a trust,
	(c) an interest in a partnership, or
	(d) an option to acquire specified property of the taxpayer;