Income Tax Act — I-3.3 149
roperty, other than property used exclusively for and directly in the course of providing the dining, recreational or sporting facilities provided by it for its members; (f) in computing the taxable income of the trust for each taxation year (i) there may be deducted, in addition to any other deductions permitted by this Part, $2,000, and (ii) no deduction shall be made under section 112 or 113; and (g) the provisions of Subdivision K of Division B (except subsections 104(1) and 104(2)) do not apply in respect of the trust. Apportionment rule (6) Where it is necessary for the purpose of this section to ascertain the taxable income of a taxpayer for a period that is a part of a taxation year, the taxable income for the period shall be deemed to be the proportion of the taxable income for the taxation year that the number of days in the period is of the number of days in the taxation year. Time for filing (7) A corporation the taxable income of which for a taxation year is exempt from tax under this Part because of paragraph 149(1)(j) shall file with the Minister a prescribed form containing prescribed information on or before its filing-due date for the year. Penalty for failure to file on time (7.1) Where a corporation fails to file the prescribed form as required by subsection 149(7) for a taxation year, it is liable to a penalty equal to the amount determined by the formula A × B where A is the greater of (a) $500, and (b) 2% of its taxable income for the year; and B is the lesser of (a) 12, and (b) the number of months in whole or in part that are in the period that begins on the day on or before which the prescribed form is required to be filed and ends on the day it is filed. Interpretation of para. (1)(j) (8) For the purpose of paragraph 149(1)(j), (a) a corporation is controlled by another corporation if more than 50% of its issued share capital (having full voting rights under all circumstances) belongs to (i) the other corporation, or (ii) the other corporation and persons with whom the other corporation does not deal at arm’s length, but a corporation shall be deemed not to have acquired control of a corporation if it has not purchased (or otherwise acquired for a consideration) any of the shares in the capital stock of that corporation; and (b) there shall be included in computing a corporation’s income and in determining its gross revenue the amount of all gifts received by the corporation and all amounts contributed to the corporation to be used for scientific research and experimental development. Rules for determining gross revenue (9) In determining the gross revenue of a corporation for the purpose of determining whether it is described by paragraph 149(1)(j) for a taxation year, (a) there may be deducted an amount not exceeding its gross revenue for the year computed without including or deducting any amount under this subsection; and (b) there shall be included any amount that has been deducted under this subsection for the preceding taxation year. Becoming or ceasing to be exempt (10) If at any time (in this subsection referred to as that time ), a person — that is a corporation or, if that time is after September 12, 2013, a trust — becomes or ceases to be exempt from tax under this Part on its taxable income, the following rules apply: (a) the taxation year of the person that would, but for this paragraph, have included that time is deemed to end immediately before that time, a new taxation year of the person is deemed to begin at that time and, for the purpose of determining the person’s fiscal period after that time, the person is deemed not to have established a fiscal period before that time; (a.1) for the purpose of computing the person’s income for its first taxation year that ends after that time, the person is deemed to have deducted under sections 20, 138 and 140 in computing the person’s income for its taxation year that ended immediately before that time, the greatest amount that could have bee