Tax wiki
s. 61.2
PART I — Income Tax · DIVISION B — Computation of Income · SUBDIVISION E — Deductions in Computing Income
Reserve for debt forgiveness for resident individuals
Not yet annotated · Text current to 2026-06-21 · section last amended 2004-08-31
Current text
There may be deducted in computing the income for a taxation year of an individual (other than a trust) resident in Canada throughout the year such amount as the individual claims not exceeding the amount determined by the formula
A + B - 0.2(C - $40,000)
where
is the amount, if any, by which
the total of all amounts each of which is an amount that, because of the application of section 80 to an obligation payable by the individual (or a partnership of which the individual was a member) was included under subsection 80(13) in computing the income of the individual for the year or the income of the partnership for a fiscal period that ends in the year (to the extent that, where the amount was included in computing income of a partnership, it relates to the individual’s share of that income)
exceeds
the total of all amounts deducted because of paragraph 80(15)(a) in computing the individual’s income for the year,
is the amount, if any, included under section 56.2 in computing the individual’s income for the year, and
is the greater of $40,000 and the individual’s income for the year, determined without reference to this section, paragraph 20(1)(ww), section 56.2, paragraph 60(w), subsection 80(13) and paragraph 80(15)(a).
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 61.2 links to the one before it.
Enacting and amending legislation
- 1995, c. 21, s. 20; 2000, c. 19, s. 8
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
Citation
Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.), s. 61.2.