Income Tax Regulations — 1100
or producing income from a business carried on in Canada (other than the business of selling the product of the particular property) or from another property situated in Canada, or (ii) a corporation or partnership described in subsection (26), where the owner was (iii) a corporation whose principal business was, throughout the year, (A) the renting or leasing of leasing property or property that would be leasing property but for subsection (18), (19) or (20), (B) the renting or leasing of property referred to in clause (A) combined with the selling and servicing of property of the same general type and description, or (C) the manufacturing of property described in Class 34, 43.1, 43.2, 47 or 48 in Schedule II that it sells or leases, and the gross revenue of the corporation for the year from that principal business was not less than 90 per cent of the gross revenue of the corporation for the year from all sources, or (iv) a partnership each member of which was (A) a corporation described in subparagraph (iii) or paragraph (26)(a), or (B) another partnership described in this subparagraph. (26) Subsection (24) does not apply to a taxation year of a taxpayer that was, throughout the year, (a) a corporation whose principal business throughout the year was (i) manufacturing or processing, (ii) mining operations, or (iii) the sale, distribution or production of electricity, natural gas, oil, steam, heat or any other form of energy or potential energy; or (b) a partnership each member of which was (i) a corporation described in paragraph (a), or (ii) another partnership described in this paragraph. (27) Specified energy property of a person or partnership does not include property acquired by the person or partnership after February 9, 1988 and before 1990 (a) pursuant to an obligation in writing entered into by the person or partnership before February 10, 1988; (b) pursuant to the terms of a prospectus, preliminary prospectus, registration statement or offering memorandum filed before February 10, 1988 with a public authority in Canada pursuant to and in accordance with the securities legislation of any province; (c) pursuant to the terms of an offering memorandum distributed as part of an offering of securities where (i) the offering memorandum contained a complete or substantially complete description of the securities contemplated in the offering as well as the terms and conditions of the offering of the securities, (ii) the offering memorandum was distributed before February 10, 1988, (iii) solicitations in respect of the sale of the securities contemplated by the offering memorandum were made before February 10, 1988, and (iv) the sale of the securities was substantially in accordance with the offering memorandum; or (d) as part of a project where, before February 10, 1988, (i) some of the machinery or equipment to be used in the project had been acquired, or agreements in writing for the acquisition of that machinery or equipment had been entered into, by or on behalf of the person or partnership, and (ii) an approval had been received by or on behalf of the person or partnership from a government environmental authority in respect of the location of the project. (28) A property acquired by a taxpayer (a) in the course of a reorganization in respect of which, if a dividend were received by a corporation in the course of the reorganization, subsection 55(2) of the Act would not be applicable to the dividend by reason of the application of paragraph 55(3)(b) of the Act, or (b) from a person with whom the taxpayer was not dealing at arm’s length (otherwise than by virtue of a right referred to in paragraph 251(5)(b) of the Act) at the time the property was acquired that would otherwise be specified energy property of the taxpayer shall be deemed not to be specified energy property of the taxpayer if, immediately before it was so acquired by the taxpayer, it was not, by virtue of subsection (27), this subsection or subsection (