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(i) where the particular debt is capital
property, nil, and
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(ii) in any other case, the amount, if any,
by which
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(A) the cost amount to the creditor of
the particular debt
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(B) the specified cost to the creditor of
the particular debt; and
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(d) where no portion of the particular debt
is outstanding immediately after that time
and the particular debt is not capital
property, the creditor may deduct as a bad
debt in computing the creditor's income for
the year the amount described in
subparagraph (c)(ii) in respect of the
seizure.
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| Claims for
bad and
doubtful debts
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(8) Where a property is seized at any time
in a taxation year by a creditor in respect of a
debt, no amount in respect of the principal
amount of the debt shall be
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(a) deductible in computing the creditor's
income for the year or a subsequent taxation
year as a bad or doubtful debt; or
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(b) included after that time in computing,
for the purposes of this Act, any balance of
undeducted outlays, expenses or other
amounts of the creditor as a bad or doubtful
debt.
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(2) Subsection (1) applies to property
acquired or reacquired after February 21,
1994, other than property acquired or
reacquired pursuant to a court order made
before February 22, 1994.
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(3) Where a taxpayer so elects in writing
filed with the Minister of National Revenue,
paragraph 79(f) of the Act shall apply to the
taxpayer in respect of property reacquired
by the taxpayer after 1991 and to which
subsection (1) does not apply as if it read as
follows:
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(e.1) where the property is capital property
of the taxpayer and was disposed of by the
taxpayer to the other person in the year and
subsequently reacquired by the taxpayer in
the year, the taxpayer's proceeds of
disposition of the property shall be deemed
to be the lesser of the proceeds of
disposition of the property to the taxpayer
(determined without reference to this
paragraph) and the amount that is the
greater of
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(i) the amount, if any, by which such
proceeds (determined without reference
to this paragraph) exceeds such portion
of the proceeds as is represented by the
taxpayer's claim, and
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(ii) the cost amount to the taxpayer of the
property immediately before its
disposition by the taxpayer;
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(f) the taxpayer shall be deemed to have
reacquired the property at the amount, if
any, by which the cost at that time of the
taxpayer's claim exceeds the amount
described in subparagraph (e)(i) or (ii) in
respect of that property or the amount, if
any, by which the proceeds of disposition of
the property are reduced because of
paragraph (e.1), as the case may be;
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27. (1) Section 80 of the Act is replaced by
the following:
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| Definitions
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80. (1) In this section,
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``commercial
debt
obligation''
« créance
commerciale »
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``commercial debt obligation'' issued by a
debtor means a debt obligation issued by the
debtor
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(a) where interest was paid or payable by
the debtor in respect of it pursuant to a
legal obligation, or
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(b) if interest had been paid or payable by
the debtor in respect of it pursuant to a
legal obligation,
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an amount in respect of the interest was or
would have been deductible in computing
the debtor's income, taxable income or
taxable income earned in Canada, as the
case may be, if this Act were read without
reference to subsections 15.1(2) and
15.2(2), paragraph 18(1)(g), subsections
18(2), (3.1) and (4) and section 21;
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``commercial
obligation''
« dette
commerciale »
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``commercial obligation'' issued by a debtor
means
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(a) a commercial debt obligation issued
by the debtor, or
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(b) a distress preferred share issued by the
debtor;
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``debtor''
« débiteur »
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``debtor'' includes any corporation that has
issued a distress preferred share and any
partnership;
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``directed
person''
« personne
désignée »
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``directed person'' at any time in respect of a
debtor means
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(a) a taxable Canadian corporation or an
eligible Canadian partnership by which
the debtor is controlled at that time, or
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(b) a taxable Canadian corporation or an
eligible Canadian partnership that is
controlled at that time by
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(ii) the debtor and one or more persons
related to the debtor, or
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(iii) a person or group of persons by
which the debtor is controlled at that
time;
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``distress
preferred
share''
« action
privilégiée de
renflouement
»
|
``distress preferred share'' issued by a
corporation means, at any time, a share
issued after February 21, 1994 (other than a
share issued pursuant to an agreement in
writing entered into on or before that date)
by the corporation that is a share described
in paragraph (e) of the definition ``term
preferred share'' in subsection 248(1) that
would be a term preferred share at that time
if that definition were read without
reference to paragraphs (e) and (f);
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``eligible
Canadian
partnership''
« société de
personnes
canadienne
admissible »
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``eligible Canadian partnership'' at any time
means a Canadian partnership none of the
members of which is, at that time,
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(a) a non-resident owned investment
corporation,
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(b) a person exempt, because of
subsection 149(1), from tax under this
Part on all or part of the person's taxable
income,
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(c) a partnership, other than an eligible
Canadian partnership, or
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(d) a trust, other than a trust in which no
non-resident person and no person
described in paragraph (a), (b) or (c) is
beneficially interested;
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``excluded
obligation''
« dette
exclue »
|
``excluded obligation'' means an obligation
issued by a debtor where
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(a) the proceeds from the issue of the
obligation
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(i) were included in computing the
debtor's income or, but for the
expression ``other than a prescribed
amount'' in paragraph 12(1)(x), would
have been so included,
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(ii) were deducted in computing, for
the purposes of this Act, any balance of
undeducted outlays, expenses or other
amounts, or
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(iii) were deducted in computing the
capital cost or cost amount to the
debtor of any property of the debtor,
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(b) an amount paid by the debtor in
satisfaction of the entire principal
amount of the obligation would be
included in the amount determined under
paragraph 28(1)(e) or section 30 in
respect of the debtor,
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(c) section 78 applies to the obligation, or
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(d) the principal amount of the obligation
would, if this Act were read without
reference to sections 79 and 80 and the
obligation were settled without any
amount being paid in satisfaction of its
principal amount, be included in
computing the debtor's income because
of the settlement of the obligation;
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``excluded
property''
« bien exclu »
|
``excluded property'' at any time means
property of a non-resident debtor that would
not be taxable Canadian property of the
debtor if it were disposed of at that time by
the debtor;
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``excluded
security''
« valeur
mobilière
exclue »
|
``excluded security'' issued by a corporation
to a person as consideration for the
settlement of a debt means
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(a) a distress preferred share issued by the
corporation to the person, or
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(b) a share issued by the corporation to
the person under the terms of the debt,
where the debt was a bond, debenture or
note listed on a prescribed stock
exchange in Canada and the terms for the
conversion to the share were not
established or substantially modified
after the later of February 22, 1994 and
the time that the bond, debenture or note
was issued;
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``forgiven
amount''
« montant
remis »
|
``forgiven amount'' at any time in respect of a
commercial obligation issued by a debtor is
the amount determined by the formula
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A - B
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A is the lesser of the amount for which the
obligation was issued and the principal
amount of the obligation, and
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(a) the amount, if any, paid at that time
in satisfaction of the principal amount
of the obligation,
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(b) the amount, if any, included under
paragraph 6(1)(a) or subsection 15(1)
in computing the income of any person
because of the settlement of the
obligation at that time,
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(c) the amount, if any, deducted at that
time under paragraph 18(9.3)(f) in
computing the forgiven amount in
respect of the obligation,
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(d) the capital gain, if any, of the debtor
resulting from the application of
subsection 39(3) to the purchase at that
time of the obligation by the debtor,
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(e) such portion of the principal
amount of the obligation as relates to
an amount renounced under
subsection 66(10), (10.1), (10.2) or
(10.3) by the debtor,
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(f) any portion of the principal amount
of the obligation that is included in the
amount determined for A, B, C or D in
subsection 79(3) in respect of the
debtor for the taxation year of the
debtor that includes that time or for a
preceding taxation year,
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(g) the total of all amounts each of
which is a forgiven amount at a
previous time that the obligation was
deemed by subsection 80.01(8) or (9)
to have been settled,
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(h) such portion of the principal
amount of the obligation as can
reasonably be considered to have been
included under section 80.4 in
computing the debtor's income for a
taxation year that includes that time or
for a preceding taxation year,
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(i) where the debtor is a bankrupt at
that time, the principal amount of the
obligation,
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(j) such portion of the principal
amount of the obligation as represents
the principal amount of an excluded
obligation,
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(k) where the debtor is a partnership
and the obligation was, since the later
of the creation of the partnership or the
issue of the obligation, always payable
to a member of the partnership actively
engaged, on a regular, continuous and
substantial basis, in those activities of
the partnership that are other than the
financing of the partnership business,
the principal amount of the obligation,
and
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(l) the amount, if any, given at or
before that time by the debtor to
another person as consideration for the
assumption by the other person of the
obligation;
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``person''
« personne »
|
``person'' includes a partnership;
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``relevant loss
balance''
« solde de
pertes
applicable »
|
``relevant loss balance'' at a particular time for
a commercial obligation and in respect of a
debtor's non-capital loss, farm loss,
restricted farm loss or net capital loss, as the
case may be, for a particular taxation year
means the amount of such loss that would be
deductible in computing the debtor's
taxable income or taxable income earned in
Canada, as the case may be, for the taxation
year that includes that time if
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(a) the debtor had sufficient incomes
from all sources and sufficient taxable
capital gains,
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(b) subsections (3) and (4) did not apply
to reduce such loss at or after that time,
and
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(c) paragraph 111(4)(a) and subsection
111(5) did not apply to the debtor,
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except that, where the debtor is a
corporation the control of which was
acquired at a previous time by a person or
group of persons and the particular year
ended before the previous time, the relevant
loss balance at the particular time for the
obligation and in respect of such loss for the
particular year shall be deemed to be nil
unless
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(d) the obligation was issued by the
debtor before, and not in contemplation
of, the acquisition of control, or
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(e) all or substantially all of the proceeds
from the issue of the obligation were used
to satisfy the principal amount of another
obligation to which paragraph (d) or this
paragraph would apply if the other
obligation were still outstanding;
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``successor
pool''
« compte de
société
remplaçante »
|
``successor pool'' at any time for a
commercial obligation and in respect of an
amount determined in relation to a debtor
means such portion of that amount as would
be deductible under subsection 66.7(2), (3),
(4) or (5), as the case may be, in computing
the debtor's income for the taxation year
that includes that time, if
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(a) the debtor had sufficient incomes
from all sources,
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(b) subsection (8) did not apply to reduce
the amount so determined at that time,
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(c) the year ended immediately after that
time, and
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|
(d) paragraphs 66.7(4)(a) and (5)(a) were
read without reference to the expressions
``30% of'' and ``10% of'', respectively,
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except that the successor pool at that time
for the obligation shall be deemed to be nil
unless
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|
(e) the obligation was issued by the
debtor before, and not in contemplation
of, the event described in paragraph
(8)(a) that gives rise to the deductibility
under subsection 66.7(2), (3), (4) or (5),
as the case may be, of all or part of that
amount in computing the debtor's
income, or
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(f) all or substantially all of the proceeds
from the issue of the obligation were used
to satisfy the principal amount of another
obligation to which paragraph (e) or this
paragraph would apply if the other
obligation were still outstanding;
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|
``unrecognize
d loss''
« perte non
constatée »
|
``unrecognized loss'' at a particular time, in
respect of an obligation issued by a debtor,
from the disposition of a property means the
amount that would, but for subparagraph
40(2)(g)(ii), be a capital loss from the
disposition at or before the particular time
of a debt or other right to receive an amount,
except that where the debtor is a
corporation the control of which was
acquired before the particular time and after
the time of the disposition by a person or
group of persons, the unrecognized loss at
the particular time in respect of the
obligation shall be deemed to be nil unless
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|
(a) the obligation was issued by the
debtor before, and not in contemplation
of, the acquisition of control, or
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|
(b) all or substantially all of the proceeds
from the issue of the obligation were used
to satisfy the principal amount of another
obligation to which paragraph (a) or this
paragraph would apply if the other
obligation were still outstanding.
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|
|
| Application of
debt
forgiveness
rules
|
(2) For the purposes of this section,
|
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|
|
(a) an obligation issued by a debtor is
settled at any time where the obligation is
settled or extinguished at that time
(otherwise than by way of a bequest or
inheritance or as consideration for the issue
of a share described in paragraph (b) of the
definition ``excluded security'' in
subsection (1));
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|
(b) an amount of interest payable by a
debtor in respect of an obligation issued by
the debtor shall be deemed to be an
obligation issued by the debtor that
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(i) has a principal amount, and
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