Easements
2. The granting of an easement or a public right of way is a disposition of a part of the property in respect of which it is granted. For the purpose of section 43, the Department normally accepts an amount equal to the proceeds from such a disposition as being the reasonable portion of the adjusted cost base of the whole property attributable to the part disposed of in such cases as well as in cases where a portion of a property is expropriated in fee simple for use as a right of way, provided that:
(a) the area of the portion of the property that was expropriated or in respect of which an easement or right of way was granted is not more than 20% of the area of the total property; and
(b) the amount of the compensation received is not more than 20% of the amount of the adjusted cost base of the total property.
Mortgage instalments
4. ...[A]n installment payment made on a mortgage is a disposition of property because it is a transaction or event by which the property (i.e. the mortgage principal) is redeemed in part. For the purpose of computing the capital gain where an installment payment is received on a discounted mortgage, the proceeds of disposition are the portion of the installment payment received on account of the mortgage principal, and the ACB of the property disposed of is, by virtue of section 43, an amount equal to the proceeds of disposition less a portion of the discount as determined on the basis of a pro rata share of all amounts receivable as payments on account of the total principal indebtedness of the borrower. In effect, a capital gain is realized in respect of the discount each time an installment payment is received.
5. However, for administrative purposes, where the amount of the mortgage discount is relatively minor, the taxpayer may treat it as only being realized in payments received by him after he has fully recovered his acquisition cost of the mortgage.
