,canada ,cu/oms                       #a
& ,rev5ue ,ag5cy

          ,9t]pret,n ,bullet9
    
,subject3 ,9come ,tax ,act
  ,special ,res]ves--,sale ( ,l&
,numb]3 ,,it-#aeb;,r#c
,date3 ,june #ah #aihe
,ref];e3 ,p>agraph #bj7#a77n7 & subsec;n
  #bj7#h7 7al sec;n #gh & p>agraphs
  #gb7#a77a7 & #gb7#b77a77

  ,? bullet9 c.els & replaces ,9t]pret,n
,bullet9 ,,it-#aeb;,r#b4 ,curr5t revi.ns
>e designat$ 0v]tical l9es4 ,proposals
3ta9$ 9 ! ,notices ( ,ways & ,m1ns
,mo;ns ( ,may #i & ,may #bc1 #aihe >e n
3sid]$ 9 ? rel1se4

#a4 ,? bullet9 d1ls )! op],n ( p>agraph
  #bj7#a77n7 z x relates 6! sale ( l& 7:
  norm,y 9cludes any build+s or o!r
  /ructures situat$ "!on7 9 ! c\rse (a
  busi;s4 ,= any tax,n ye>s 5d+ af    #a
             ,,it-#aeb;,r#c          a#a
  ,novemb] #ah1 #aigd1 p>agraph
  #bj7#a77n7 (! ,act provides t 9 -put+
  9come1 taxpay]s may deduct a r1sona#
  res]ve = c]ta9 am.ts :1 al? 9clud$ 9
  -put+ 9come1 >e n 8due0 until a "d t
  is af ! 5d (! tax,n ye>4 ,?us1 !
  res]ve w 2 all[$ only ": an am.t is [+
  b ! taxpay] has no imm legal "r 6call
  =! pay;t4

            ,res]ve ,all[a#
    
#b4 ,": prop]ty is sold 9 ! c\rse (!
  busi;s (a taxpay] & 9/al;ts (! sale
  price or a lump sum -mit;t1 :e!r
  secur$ 0mortgage or o!rwise1 >e n due
  until af ! 5d (! tax,n ye>1 ! taxpay]
  may claim a r1sona# res]ve 9 respect (
  t "p (! pr(it on ! sale t c r1sonably
  2 reg>d$ z n yet due4 ,x is important
  6note t a res]ve "u p>agraph
  #bj7#a77n7 is all[a# 9 respect ( only
  ! pr(it ele;t 9 ! am.t due af ! 5d (!
  tax,n ye>4 ,) respect 6! am.t       #b
             ,,it-#aeb;,r#c          b#a
  receiva# xf1 a res]ve = d\bt;l debts
  may 2 all[a# "u p>agraph #bj7#a77l71
  ": applica#4
#c4 ,! only require;t 9 reg>d 6! all[a#
  am.t (a res]ve 9 respect (! pr(it
  ele;t 9clud$ 9 ! am.t due af ! 5d (!
  tax,n ye> is t ! res]ve m/ 2 a r1sona#
  am.t4 ,norm,y1 x is 3sid]$ r1sona#
  6assume t ! pr(it ele;t 9 any am.t due
  af ! 5d (! tax,n ye> is ! propor;n (!
  am.t due t ! gross pr(it on ! sale
  be>s 6! gross sell+ price 72f any
  deduc;n = \tlays or exp5ses72 ?us a
  res]ve mi<t 2 all[$ equal 6! full am.t
  (! pr(it if
--------------------------------------#b
  no "p (! sell+ price 0 due4 ,/at$ z a
  =mula1 ! =ego+ wd be3

  ,gross pr(it gross sell+ price
  multipli$ 0am.t due af ! 5d (! tax,n
  ye> equals res]ve

                                      #c
             ,,it-#aeb;,r#c          a#b
  ,hav+ calculat$ :at is a r1sona#
  res]ve1 a taxpay] ne$ n claim !
  maximum am.t ( t res]ve 9 any "picul>
  tax,n ye>1 b may claim s* am.t up 6!
  maximum z he wi%es4
#d4 ,a claim =a res]ve "u p>agraph
  #bj7#a77n7 = an am.t equal 6! less] (!
  gross pr(it on ! sale or ! am.t due af
  ! 5d (! tax,n ye> w n 2 all[$ z x is n
  3sid]$ r1sona# 6assume t ! v5dor rcvs
  no pr(it until af he has recov]$ 8
  full 9ve/;t 9 ! prop]ty sold4
#e4 ,subsec;n #bj7#h7 provides t no
  res]ve may 2 claim$ 9 a tax,n ye> "u
  p>agraph #bj7#a77n7 ": a taxpay]1 at !
  5d (! ye> or at any "t 9 ! immly
  foll[+ ye>1 0 exempt f tax "u any
  provi.n ( ,"p ;,i (! ,act or 0 n a
  resid5t ( ,canada & did n c>ry on !
  busi;s 9 ,canada 7e6ective = prop]ty
  sold af ,may #f1 #aigd74 ,= prop]ty
  sold 2f ,may #f1 #aigd1 no res]ve may
  2 claim$ 9 a tax,n ye> ": ! taxpay]
  c1s$ 6be a resid5t ( ,canada or     #d
             ,,it-#aeb;,r#c          b#b
  2came exempt f tax "u any provi.n (
  ,"p ;,i (! ,act at any "t 9 ! ye> or 9
  ! immly foll[+ ye>4 ,9 a4i;n1 p>agraph
  #gb7#a77a7 provides t no res]ve may 2
  claim$ 9 ! ye> (a taxpay]'s d1? un.s 8
  legal repres5tative &! transf]ee use !
  elec;n p]mitt$ 0p>agraph #gb7#b77a7 (!
  ,act4
#f4 ,subsec;n #bj7#h7 al provides t1 )
  respect 6prop]ty sold af ,novemb] #ab1
  #aiha o!rwise ?an pursuant 6! t]ms (a
  writt5 agree;t or (f] made or 5t]$
  96on or 2f t date1 no res]ve may 2
  claim$ =a tax,n ye> : 5ds m ?an #cf
  mon?s af ! date ( sale4 ,acly1 a
  res]ve "u p>agraph #bj7#a77n7 is
  limit$ 6a maximum ( ?ree ye>s4

      ,non-,>m's ,l5g? ,transac;ns
    
#g4 ,9 a4i;n 6! abv crit]ia = det]m9+
  :at is a r1sona# am.t z a res]ve1 !
  ,de"p;t w take cogniz.e (! foll[+
                                      #e
             ,,it-#aeb;,r#c          c#b
  factors ": ! "pies >e n d1l+ ) ea* o!r
  at >m's l5g?3
  7a7 any 4posi;n (! prop]ty 0! pur*as]1
  7b7 :e!r ! t]ms ( pay;t =! prop]ty >e
    r1sona#1 &
  7c7 :e!r ! t]ms ( pay;t =! prop]ty >e
    adh]$ to4
--------------------------------------#c
#h4 ,": ! t]ms ( pay;t =! sale ( prop]ty
  9 a non->m's l5g? transac;n >e r1sona#
  b >e n adh]$ to1 a r1sona# am.t all[a#
  z a res]ve 6! v5dor ord9>ily is ! am.t
  t wd h be5 all[a# _h ! pay;ts be5
  made4
#i4 ,": prop]ty is sold 9 a non->m's
  l5g? transac;n &! t]ms ( pay;t =!
  prop]ty ext5d until af ! 5d (! second
  foll[+ tax,n ye> (! pur*as]1 !
  applic,n ( sec;n #gh1 3c]n+ unpd
  am.ts1 %d 2 3sid]$ 0! pur*as]4
  ,p>agraph #gh7#a77b7 provides t an
  agree;t 9 prescrib$ =m 9 respect ( an
  unpd am.t is e6ective = purposes (!
                                      #f
             ,,it-#aeb;,r#c          a#c
  ,9come ,tax ,act 7: wd 9clude p>agraph
  #bj7#a77n774

        ,res]ve ,": ,sale ( ,l&
          ,9volves a ,mortgage
    
#aj4 ,a sale ( l& (t5 9volves ! giv+ (a
  mortgage 0! pur*as] 6! v5dor1 !
  assump;n 0! pur*as] (a mortgage alr
  giv5 6a ?ird "py 0! v5dor or1 "s"ts1 !
  3t9u+ exi/;e (a mortgage giv5 0! v5dor
  b n assum$ 0! pur*as]4 ,! transac;n
  3/itutes a 8sale0 =! purpose (
  p>agraph #bj7#a77n7 ev5 ": x is made
  0m1ns (a l;g-t]m pur*ase-&-sale
  agree;t "u : ! pur*as] _c obta9 a cle>
  title 6! prop]ty until ! agree;t has
  be5 -plet$ or ! mortgage has be5
  4*>g$4 ,": ! circum/.es (a sale 9volve
  "o or m mortgages1 ! =mula set \ abv
  may 2 alt]$ dep5d+ on ! circum/.es 9 !
  "picul> case4 ,"s typical situ,ns >e
  \tl9$ 2l4
                                      #g
             ,,it-#aeb;,r#c          b#c
#aa4 ,an am.t secur$ 0a mortgage giv5 0!
  pur*as] 6! v5dor z "p-pay;t (! pur*ase
  price is an 8am.t due0 af ! 5d (!
  tax,n ye> 6! v5dor =! purposes (! abv
  =mula1 & x rema9s s f ye> 6ye> 6!
  ext5t t x is held 0! v5dor & xs
  pr9cipal am.t has n 2come due 0! 5d (a
  "picul> ye>4 ,": bl5d$ pay;ts (
  pr9cipal & 9t]e/ >e 2+ made 0!
  pur*as]1 only ! "p ( ea* s* pay;t t is
  made on a3.t (! pr9cipal acts 6reduce
  ! am.t due 6! v5dor =! calcul,n (!
  res]ve4
#ab4 ,a simple case is ":1 = example1 !
  gross sell+ price (a p>cel ( l& 0
  4#cjj1jjj1 ! gross pr(it 0 4#cj1jjj1
  &! pur*as] pd ca% ( 4#ajj1jjj & gave !
  v5dor a mortgage ( 4#bjj1jjj4
  ,applic,n (! =mula at ! 5d (! ye> (
  sale wd all[ ! v5dor a res]ve z
  foll[s1 provid$ no fur!r pay;ts h be5
  made3

                                      #h
             ,,it-#aeb;,r#c          c#c
  4#cj1jjj divid$ 04#cjj1jjj multipli$
  04#bjj1jjj equals 4#bj1jjj res]ve
--------------------------------------#d
#ac4 ,": ! v5dor has previ\sly giv5 a
  mortgage 6a ?ird "py ei at ! "t (
  acquisi;n (! l& or 6f9.e ! co/ (
  improve;ts 6! l& 9clud+ 3/ruc;n (a
  build+ on ! prop]ty1 &! unpd bal.e (!
  mortgage is assum$ 0! pur*as] z "p-
  pay;t (! pur*ase price1 t unpd bal.e
  may 2 deduct$ f ! gross sell+ price 9
  ! denom9ator (! =mula 9 #ab abv 6>rive
  at a r1sona# res]ve4 ,= 9/.e1 if !
  prop]ty sold = 4#cjj1jjj &! pur*as] pd
  4#dj1jjj ca%1 gave a second mortgage =
  4#hj1jjj 6! v5dor1 assum$ mortgages (
  4#ej1jjj & 4#acj1jjj =! orig9al
  acquisi;n (! l& &! 3/ruc;n (! build+
  respectively1 &! v5dor made a gross
  pr(it ( 4#cj1jjj1 a r1sona# am.t z a
  res]ve cd 2 calculat$ z foll[s at ! 5d
  (! ye> ( sale1 provid$ no fur!r pay;ts
  h be5 made3
                                      #i
             ,,it-#aeb;,r#c          a#d
  4#cj1jjj divid$ 04#abj1jjj multipli$
  04#hj1jjj equals 4#bj1jjj res]ve

  ,? excep;n does n apply ": ! v5dor has
  giv5 a mortgage on ! prop]ty = any o!r
  r1son1 & "! wd "!=e 2 no reduc;n (!
  denom9ator = s* a mortgage t 0 assum$
  0! pur*as]4















                                     #aj