Income Tax Act — I-3.3 66
anadian development expense in subsection 66.2(5) the amount that became payable by that person. Limitation of FEDE (12.4) Where, as a result of a transaction that occurs after May 6, 1974, an amount becomes receivable by a taxpayer at a particular time in a taxation year and the consideration given by the taxpayer for the amount receivable is property (other than a foreign resource property) or services, the original cost of which to the taxpayer can reasonably be regarded as having been primarily foreign exploration and development expenses of the taxpayer (or would have been so regarded if they had been incurred by the taxpayer after 1971 and the definition foreign exploration and development expenses in subsection (15) were read without reference to paragraph (k) of that definition), the following rules apply: (a) in computing the taxpayer’s foreign exploration and development expenses at that time, there shall be deducted the amount receivable by the taxpayer; (b) where the amount receivable exceeds the total of the taxpayer’s foreign exploration and development expenses incurred before that time to the extent that those expenses were not deducted or deductible, as the case may be, in computing the taxpayer’s income for a preceding taxation year, there shall be included in the amount referred to in paragraph 59(3.2)(a) the amount, if any, by which the amount receivable exceeds the total of (i) the taxpayer’s foreign exploration and development expenses incurred before that time to the extent that those expenses were not deducted or deductible, as the case may be, in computing the taxpayer’s income for a preceding taxation year, and (ii) the amount, designated by the taxpayer in prescribed form filed with the taxpayer’s return of income for the year, not exceeding the portion of the amount receivable for which the consideration given by the taxpayer was property (other than a foreign resource property) or services, the original cost of which to the taxpayer can reasonably be regarded as having been primarily (A) specified foreign exploration and development expenses in respect of a country, or (B) foreign resource expenses in respect of a country; and (c) where an amount is included in the amount referred to in paragraph 59(3.2)(a) by virtue of paragraph 66(12.4)(b), the total of the taxpayer’s foreign exploration and development expenses at that time shall be deemed to be nil. Limitations of foreign resource expenses (12.41) Where a particular amount described in subsection (12.4) becomes receivable by a taxpayer at a particular time, there shall at that time be included in the value determined for G in the definition cumulative foreign resource expense in subsection 66.21(1) in respect of the taxpayer and a country the amount designated under subparagraph (12.4)(b)(ii) by the taxpayer in respect of the particular amount and the country. Partnerships (12.42) For the purposes of subsections (12.4) and (12.41), where a person or partnership is a member of a particular partnership and a particular amount described in subsection (12.4) becomes receivable by the particular partnership in a fiscal period of the particular partnership, (a) the member’s share of the particular amount is deemed to be an amount that became receivable by the member at the end of the fiscal period; and (b) the amount deemed by paragraph (a) to be an amount receivable by the member is deemed to be an amount (i) that is described in subsection (12.4) in respect of the member, and (ii) that has the same attributes for the member as it did for the particular partnership. Unitized oil or gas field in Canada (12.5) Where, pursuant to an agreement between a taxpayer and another person to unitize an oil or gas field in Canada, an amount has become receivable by the taxpayer at a particular time from that other person in respect of Canadian oil and gas property expense incurred by the taxpayer in respect of that field or any part thereof, the following rules