Haas Estate v. Canada, 2001 DTC 5001 (FCA) -- summary under Article 13

Where a United States resident has disposed of Canadian real property, the calculation of the reduction under Article XIII(9) of the Canada-U.S. Convention begins at the point at which the gain first began to accrue for Canadian income tax purposes which, in the case of properties acquired prior to V-Day, means the starting point for calculating the reduction will be December 31, 1971. "Thus, calculating the amount of reduction in such cases entails subtracting the V-Day value from the proceeds of disposition and multiplying the difference by the number of months that the gain accrued from V-Day to 1985, divided by the number of months the gain accrued from V-Day to date of disposition. That was the conclusion in Kubicek." (p. 6702)