Tax wiki
s. 51.1

PART I — Income Tax · DIVISION B — Computation of Income · SUBDIVISION C — Taxable Capital Gains and Allowable Capital Losses · Indexed Security Investment Plans

Conversion of debt obligation

Not yet annotated · Text current to 2026-06-21 · section last amended 2004-08-31

Current text

Where

(a)

a taxpayer acquires a bond, debenture or note of a debtor (in this section referred to as the “new obligation”) in exchange for a capital property of the taxpayer that is another bond, debenture or note of the same debtor (in this section referred to as the “convertible obligation”),

(b)

the terms of the convertible obligation conferred on the holder the right to make the exchange, and

(c)

the principal amount of the new obligation is equal to the principal amount of the convertible obligation,

the cost to the taxpayer of the new obligation and the proceeds of disposition of the convertible obligation shall be deemed to be equal to the adjusted cost base to the taxpayer of the convertible obligation immediately before the exchange.

Source: Justice Laws Website. Not an official version.

Historic text

This section has not been amended since the start of the point-in-time record on 31 August 2004.

Earlier versions: Justice Laws point-in-time versions of the Act (from 31 August 2004), and CanLII (under “Versions”). On Justice Laws, each version of section 51.1 links to the one before it.

Enacting and amending legislation

1995, c. 21, s. 50

Text before 2004 is found in the annual Statutes of Canada cited above. Application and coming-into-force provisions are not part of the consolidation; see the amending Acts.

Cross-references

Referred to in

s. 126

References are generated from the statutory text and list other sections of the Act only.

Citation

Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.), s. 51.1.