Subsection 44(1) - Exchanges of property
Cases
Macklin v. The Queen, 92 DTC 6595, [1993] 1 CTC 21 (FCTD)
In August 1979 the taxpayer decided that she wished to have a portion of a farm then owned by her husband developed as a housing subdivision. In...
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|---|---|---|
| Tax Topics - Statutory Interpretation - Resolving Ambiguity | 53 |
Hawkins v. The Queen, 91 DTC 5502 (FCTD)
Joyal J. found that although "no particular formality would be required in order to meet the election requirements under section 44" (p. 5505),...
Mintenko v. The Queen, 88 DTC 6537, [1989] 1 CTC 40 (FCTD)
An amended schedule filed under cover of an accountant's letter dated May 31, 1982 was sufficient notification to Revenue Canada of the purchase...
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|---|---|---|
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Disposition | 61 | |
| Tax Topics - Income Tax Act - Section 54 - Principal Residence | 89 | |
| Tax Topics - Income Tax Act - Section 9 - Capital Gain vs. Profit - Real Estate | farm activity kept separate from trading activity | 124 |
Administrative Policy
S3-F3-C1 - Replacement Property
Form of taxpayer election
1.24 A taxpayer must elect to have the replacement property rules apply. The election should be made as follows:
- If the...
4 March 2015 External T.I. 2014-0550761E5 F - 44(1) et disposition partielle
A portion of a building was destroyed by fire, with a portion of the insurance proceeds used to reconstruct it. Although the building generated...
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|---|---|---|
| Tax Topics - Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(f) | inclusion of insurance proceeds applied to building repair | 116 |
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Former Business Property | part of building treated as former business property | 165 |
| Tax Topics - Income Tax Act - Section 54 - Proceeds of Disposition - Paragraph (f) | insurance proceeds received for destruction of part of building: compensation for property damaged rather than destroyed | 76 |
23 December 2014 External T.I. 2014-0551841E5 - Subsections 44(1) and 69(11) of the Act
Would proceeds of disposition deemed to arise by s. 69(11) be considered an amount that has become receivable by the taxpayer as proceeds of...
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|---|---|---|
| Tax Topics - Income Tax Act - Section 122.1 - Subsection 122.1(1) - Gross REIT Revenue | implied receipt of deemed proceeds | 111 |
15 November 2001 External T.I. 2001-0088285 F - deferral of gain on involuntary dispositions
Building 1 of Opco was destroyed by fire, then replaced through the construction of Building 2, which also was destroyed by fire and replaced by...
21 August 1995 External T.I. 9519755 - PROCEEDS OF DISPOSITION
In response to a question concerning s. 2 of the Partition of Property Act (B.C.), RC stated "if real property is jointly owned by three...
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|---|---|---|
| Tax Topics - Income Tax Act - Section 54 - Proceeds of Disposition | 95 |
26 July 1995 External T.I. 9501585 - court ordered partition & sale disposition
Where as a result of the bankruptcy of one of the four co-tenants of rental properties, a court-appointed trustee receives court approval for...
18 July 1995 T.I. (C.T.O. "Expropriation")
With respect to the sale of a portion of a ranch as a result of a possible expropriation, RC noted that "a sale based on the rumour of a possible...
24 April 1995 External T.I. 9504865 - EXCHANGES OF PROPERTY
A shareholder whose shares are acquired pursuant to s. 188 of the Business Corporations Act (Ontario) will be considered to have received his sale...
25 July 1991 Memorandum (Tax Window, No. 7, p. 5, ¶1371)
The word "replacement" contemplates a direct substitution. Accordingly, there must be a causal relationship between the disposition of one...
87 C.R. - Q.34
There is no provision permitting the extention of the time periods set out in section 44.
Articles
Kroft, "An Update on Select Legal Issues Relating to Dispositions and Exchanges of Property", 1995 Corporate Management Tax Conference Report, c. 10.
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Disposition | 0 | |
| Tax Topics - Income Tax Act - Section 44 - Subsection 44(2) | 0 |
Paragraph 44(1)(a)
Administrative Policy
5 March 2008 External T.I. 2007-0231831E5 F - Roulement de biens
Two individuals who are equal co-owners of two rental properties wish to terminate the undivided ownership so that each of them becomes a full...
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|---|---|---|
| Tax Topics - Income Tax Act - Section 54 - Proceeds of Disposition - Paragraph (d) | court-directed sale by partition court does not generate proceeds under para. (d) | 175 |
Paragraph 44(1)(c)
Administrative Policy
S3-F3-C1 - Replacement Property
Replacement property can be acquired at any time after notice of intention to take
1.11 Where … a former property was taken under statutory...
Paragraph 44(1)(e)
Administrative Policy
S3-F3-C1 - Replacement Property
Example of s. 44(2) timing and reduced capital gain where proceeds not fully reinvested
- Example 3 (para. 1.14): The taxpayer’s property with an...
Replacement Share
Administrative Policy
8 April 2008 Internal T.I. 2008-0267811I7 F - Article 44.1 - Désignation tardive
In the year of disposition of the eligible small business corporation shares, the taxpayer filed an income tax return but failed to include the...
Subsection 44(2) - Time of disposition and of receipt of proceeds
Articles
Kroft, "An Update on Select Legal Issues Relating to Dispositions and Exchanges of Property", 1995 Corporate Management Tax Conference Report, c. 10.
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|---|---|---|
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Disposition | 0 | |
| Tax Topics - Income Tax Act - Section 44 - Subsection 44(1) | 0 |
Paragraph 44(2)(a)
Cases
The Queen v. Shaw, 93 DTC 5121, [1993] 1 CTC 221 (F.C.A.)
The farm lands of the taxpayer were expropriated pursuant to the Expropriation Act (Alberta) in 1977. Following the settlement in 1986 of an...
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|---|---|---|
| Tax Topics - Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(c) | 190 | |
| Tax Topics - Income Tax Act - Section 16 - Subsection 16(1) | requires distinguishing of capital sum and interest | 123 |
| Tax Topics - Income Tax Act - Section 54 - Proceeds of Disposition - Paragraph (d) | 190 |
Laurentide Rendering Inc. v. The Queen, 84 DTC 6153, [1982] CTC 400 (FCTD), aff'd 88 DTC 6331, [1988] 2 CTC 200 (FCA)
It was suggested that s. 44(2)(a) was in large part a codification of existing case law as to when expropriation proceeds are to be included in...
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|---|---|---|
| Tax Topics - Statutory Interpretation - Absurdities | 57 | |
| Tax Topics - Statutory Interpretation - Retroactivity/Retrospectivity | 39 |
Paragraph 44(2)(b)
See Also
Loukras v. MNR, 90 DTC 1557, [1990] 2 CTC 2044 (TCC)
The taxpayer's entitlement to compensation was considered to have been finally determined by a judgment of the Trial Division of the Federal Court...
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|---|---|---|
| Tax Topics - Income Tax Act - Section 152 - Subsection 152(4) - Paragraph 152(4)(a) - Subparagraph 152(4)(a)(ii) | 42 |
Paragraph 44(2)(c)
Administrative Policy
11 September 1992 Memorandum (Tax Window, No. 24, p. 10, ¶2231)
Where the proceeds of disposition deemed to be receivable under s. 44(2)(c) are not determinable, Revenue Canada will seek a waiver, failing which...
Subsection 44(5) - Replacement property
See Also
Livingston v. The Queen, 2015 TCC 24
The taxpayer and the estate of his mother co-owned (as tenants-in-common) a dairy farm and as well as the livestock, farming equipment, feed, milk...
Klanten Farms Ltd. v. The Queen, 2007 DTC 1095, 2007 TCC 348
The taxpayer unsuccessfully submitted that a property acquired by the taxpayer for farming was a replacement property for a property that was used...
Depaoli v. The Queen, 96 DTC 1820, [1996] 3 CTC 2640 (TCC)
Prior to the expropriation of their 33-acre vacant property, which they intended to use on retirement to build a house and operate a farm, the...
McKervey v. MNR, 92 DTC 1570, [1992] 2 CTC 2015 (TCC)
In finding that land acquired by the taxpayer for use "in the rather varied mélange of businesses that he carried on - truck dismantling, selling...
Administrative Policy
3 December 2019 CTF Roundtable Q. 14, 2019-0824481C6 - Replacement Property Rules
A manufacturer, which wishes to expand its operations, acquires a piece of vacant land and takes three years to build a new plant. It then moves...
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| Tax Topics - Income Tax Act - Section 13 - Subsection 13(4.1) | property acquired in advance for expansion purposes can qualify | 83 |
S3-F3-C1 - Replacement Property
Replacement property can be acquired before disposition
1.5 In general, a replacement property can either be acquired before or after the...
18 February 2008 External T.I. 2006-0205321E5 F - BAA-corpropriété indivise, QFP-undivided interest
Two brothers (B1 and B2) hold several pieces of farmland in equal co-ownership. Some of their children are actively involved in farming. B2...
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|---|---|---|
| Tax Topics - Income Tax Act - 101-110 - Section 110.6 - Subsection 110.6(1) - Qualified Farm or Fishing Property | a co-ownership interest in a farm can qualify as a qualified farm property | 147 |
31 July 2006 External T.I. 2005-0156171E5 - Leasehold interest as replacement property
"The capital cost of a leasehold interest in respect of a building may qualify as a replacement property for a building that is a former business...
15 October 2004 External T.I. 2004-0068421E5 F - Bien de remplacement
The taxpayer and his brother acquired, in equal shares, a rental property ("Immovable A") that was rented to residential – as well as commercial...
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|---|---|---|
| Tax Topics - Income Tax Act - Section 44 - Subsection 44(5) - Paragraph 44(5)(a.1) | rental use is a similar use even if shift from residential to commercial use | 147 |
27 January 2004 External T.I. 2003-005326
A retirement home that is acquired to replace a motel would not be considered to be a replacement property: "a retirement home is not a property...
21 June 1999 External T.I. 9911515 - REPLACEMENT PROPERTY
If a corporation, that has disposed of a former business property, acquires the shares of a qualified family farm corporation and winds it up...
IT-259R3 "Exchanges of Property"
"A taxpayer who changes from one business category to another but continues to deal in the same product will normally be considered to be in a...
30 January 1995 External T.I. 9424865 - REPLACEMENT PROPERTY RULES
"The words 'replacement property' contemplate a direct substitution, such that there is a causal relationship between the disposition of the...
31 March 1994 External T.I. 9331515 - REPLACEMENT PROPERTY
There is nothing in s. 44(5)(a) to require that the "former property" have produced income in the past or that the replacement property produce...
4 September 1991 T.I. (Tax Window, No. 9, p. 23, ¶1441)
Where a business property owned by a taxpayer is used in an active business by a partnership each member of which is related to the taxpayer, the...
3 September 1991 T.I. (Tax Window, No. 8, p. 18, ¶1432)
A small hotel with a pub and restaurant that provides entertainment, liquor and food services would likely qualify as a similar business when...
21 August 1991 Memorandum (Tax Window, No. 8, p. 17, ¶1401)
Where a taxpayer acquires a new motel to replace an expropriated one, s. 44(5)(a) will not be available as the previous motel was operated by the...
6 June 1991 T.I. (Tax Window, No. 4, p. 22, ¶1284)
An apartment building earning residential rents may be a replacement property for a warehouse or office building which was used by the taxpayer (a...
1 February 1990 T.I. (July 1990 Access Letter, ¶1321)
Where a taxpayer in the business of operating rest homes sold the rest homes and bought a hotel, the operation of the hotel generally would not be...
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|---|---|---|
| Tax Topics - Income Tax Act - Section 13 - Subsection 13(4.1) | 35 |
Paragraph 44(5)(a)
Administrative Policy
S3-F3-C1 - Replacement Property
Whether more than one replacement property
1.35 In some situations, it may be necessary to purchase more than one property to replace another...
2016 Ruling 2016-0632001R3 - Replacement Property
Background
The two taxpayers are spouses and the sole shareholders of Farmco. Prior to the expropriation of Old Farmland, Farmco carried on its...
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|---|---|---|
| Tax Topics - Statutory Interpretation - Interpretation Act - Subsection 33(2) | reference to "the" replacement property included 2 replacement properties | 44 |
Paragraph 44(5)(a.1)
Administrative Policy
S3-F3-C1 - Replacement Property
Similar use test based on similar business test and same physical type
1.38 Where the former property was used for the purpose of gaining or...
13 November 2014 External T.I. 2014-0535041E5 F - Bien de remplacement Location d'immeubles
A couple who co-owned various rental properties received insurance proceeds on the complete destruction of one of the properties, and purchased...
13 March 2013 External T.I. 2012-0473291E5 F - Société de personnes - maison détruite par le feu
The Taxpayer was a partner of a partnership carrying on a farming business and owning more than half a hectare of land on which there was a...
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|---|---|---|
| Tax Topics - Income Tax Act - Section 40 - Subsection 40(2) - Paragraph 40(2)(b) | partner can use the principal residence exemption re gain allocated by partnership from disposition of personally-used principal residence, including following s. 44 deferral | 263 |
| Tax Topics - Income Tax Act - Section 40 - Subsection 40(2) - Paragraph 40(2)(c) | s. 40(2)(c) unavailable re disposition of building only from fire | 111 |
2 June 2010 External T.I. 2010-0354951E5 F - Bien de remplacement-disp. involontaire
Does a rental property acquired to replace a parking lot (generating rental income) that was expropriated qualify as a "replacement property"? In...
21 May 2010 External T.I. 2009-0352221E5 F - Bien de remplacement- résidence principale
If the property being involuntarily disposed of is a secondary residence, could a second home in the same or different tourist region, or with...
17 February 2005 External T.I. 2004-0090411E5 F - Bien de remplacement-dispos. involontaire
Regarding the situation where a corporation’s building and equipment were destroyed by fire and it used the insurance proceeds to invest in a...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 13 - Subsection 13(4) | rollover not available where building replaced by interest in partnership carrying on a similar business because the partnership interest is not depreciable property | 74 |
15 October 2004 External T.I. 2004-0068421E5 F - Bien de remplacement
The taxpayer and his brother acquired, in equal shares, a rental property ("Immovable A") that was rented to residential – as well as commercial...
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| Tax Topics - Income Tax Act - Section 44 - Subsection 44(5) | replacement property can be acquired from a related person | 183 |
Paragraph 44(5)(b)
Administrative Policy
S3-F3-C1 - Replacement Property
Meaning of similar business
1.41 The term similar business as used in the phrase “the same or a similar business” or “from that or a similar...
17 February 2014 External T.I. 2014-0517491E5 F - Bien de remplacement - usages multiples
Mr. A owned a property (Building A) whose upper floors were used from residential rentals and whose ground floor was rented out to businesses...
11 October 2013 APFF Roundtable, 2013-0495681C6 F - Bien de remplacement
ABC Inc. leased Building A to Opco, a sister corp. which used Building A in an active business. In January 2013, Building A was expropriated (with...
30 September 2013 External T.I. 2013-0505151E5 F - Biens de remplacement
Mr. A leased a rental property owned by him ("Initial Property") to Opco (wholly-owned by him) for use in carrying on its business. After the...
30 September 2004 External T.I. 2004-00842
The replacement property rules cannot be used with respect to a sale of vacant land to a municipality given that vacant land is not "used" by the...
Subsection 44(6)
Administrative Policy
S3-F3-C1 - Replacement Property
Reallocation under s. 44(6)
1.18 … [U]nder subsection 44(6), a taxpayer may be permitted to reallocate the POD of a former business property...