ARCHIVED - Reassessment where option exercised in subsequent year

From: Canada Revenue Agency

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Reassessment where option exercised in subsequent year

REFERENCE: Reassessment where option exercised in subsequent year IT-384R, November 6,1989 " Application " - The purpose of this Special Release is to update Interpretation Bulletin IT-384R as a result of amendments to the Income Tax Act by S.C. 1988, c.55 (formerly Bill C-139). Bulletin Revisions 1, Paragraph 8 of IT-384R is replaced by the following:

"8. The provisions of subsection 49(4) do not apply to the disposition of property under an option granted, extended or renewed after November 21, 1985 and exercised prior to 1988 where the option was to acquire property and was granted by an individual. Where such an option was exercised in a year subsequent to the one in which it was granted and prior to 1988, none of the consideration received by the grantor in respect of the option will be added to the proceeds of disposition of the property transferred on the exercise of the option, and the grantor's return of income for any prior year will not be adjusted by reason only of the exercise of the option. The provisions of subsections 49(3) and (4) will apply to dispositions of property under options granted by an individual that are exercised after 1987.

Note: Bill C-28, given First reading on June 20, 1989, introduced amendments to section 152 which, if enacted, will affect paragraph 3 of IT-384R. The normal reassessment period for mutual fund trusts and all corporations, except Canadian-controlled private corporations, will be extended to four years from the day of mailing of a notice of an original assessment or of a notification that no tax is payable for a taxation year. This change will be applicable after April 27, 1989 with exceptions for taxation years where

(a) a notice of an original assessment for the year or

(b) a notification that no tax was payable for the year was mailed on before April 27, 1986.

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