Income Tax Regulations — 1205
1205 (1) For the purposes of this Part earned depletion base of a taxpayer as of a particular time means the amount by which 33 1/3 per cent of the aggregate of (a) all amounts, in respect of expenditures (other than expenditures to acquire property under circumstances that entitled the taxpayer to a deduction under section 1202 or would so entitle the taxpayer if the amounts referred to in paragraphs 1202(2)(a) and (b) were sufficient for the purpose) incurred by the taxpayer after November 7, 1969 and before the particular time, each of which was (i) a Canadian exploration and development expense or would have been such an expense if it had been incurred after 1971 and was actually incurred before May 7, 1974, other than (A) a cost of borrowing capital, including any cost incurred prior to the commencement of carrying on a business, that was a Canadian exploration expense or an exploration, prospecting and development expense, as the case may be, of the taxpayer, (B) the cost to the taxpayer of any Canadian resource property acquired by the taxpayer, (C) a Canadian exploration and development expense that was incurred after a mine had come into production in reasonable commercial quantities and may reasonably be considered to be related to the mine or to a potential or actual extension thereof, (D) an expense that would have been described in clause (C) if it had been incurred after 1971, (E) an expense renounced by the taxpayer under subsection 66(10) of the Act or subsection 29(7) of the Income Tax Application Rules , (F) an amount that, by virtue of subparagraph 66(15)(b)(iv) of the Act, was a Canadian exploration and development expense or would have been such an expense if it had been incurred after 1971, if such amount was a cost or expense referred to in clause (A), (B), (C), (D) or (E) that was incurred by an association, partnership or syndicate referred to in that subparagraph, or (G) an amount that, by virtue of subparagraph 66(15)(b)(v) of the Act, was a Canadian exploration and development expense or would have been such an expense if it had been incurred after 1971, if such amount was a cost or expense referred to in clause (A), (B), (C), (D) or (E) that the taxpayer incurred pursuant to an agreement referred to in that subparagraph, (ii) the stated percentage of a Canadian exploration expense other than (A) a cost of borrowing capital, including any cost incurred prior to the commencement of carrying on a business, that was a Canadian exploration expense of the taxpayer, (B) an expense renounced by the taxpayer under subsection 66(10.1) of the Act, (C) an amount that, by virtue of subparagraph 66.1(6)(a)(iv) of the Act, was a Canadian exploration expense, if such amount was an expense referred to in clause (A), (B), (E), (F), (G) or (H) that was incurred by a partnership referred to in that subparagraph, (D) an amount that, by virtue of subparagraph 66.1(6)(a)(v) of the Act, was a Canadian exploration expense, if such amount was an expense referred to in clause (A), (B), (E), (F), (G), or (H) that the taxpayer incurred pursuant to an agreement referred to in that subparagraph, (E) an amount described in clause 66.1(6)(a)(ii)(B) or (ii.1) (B) of the Act, (F) an amount that was a Canadian exploration and development overhead expense of the taxpayer, (G) an amount that was a Canadian oil and gas exploration expense of the taxpayer, or (H) an expense described in subparagraph 66.1(6)(a)(iii) of the Act incurred after April 19, 1983, (iii) a Canadian development expense incurred before 1981 other than (A) a cost of borrowing capital, including any cost incurred prior to the commencement of carrying on a business, that was a Canadian development expense of the taxpayer, (B) an expense renounced by the taxpayer under subsection 66(10.2) of the Act, (C) an amount referred to in subparagraph 66.2(5)(a)(iii) of the Act, (D) an amount that, by virtue of subparagraph 66.2(5)(a)(iv) of the Act, was a Canadian development e