Income Tax Regulations — 1100
gregate of all amounts previously allowed as deductions in respect of the expenditure. Patents (9) Where a part or all of the cost of a patent is determined by reference to the use of the patent, in lieu of the deduction allowed under paragraph (1)(c), a taxpayer, in computing his income for a taxation year from a business or property, as the case may be, may deduct such amount as he may claim in respect of property of Class 14 in Schedule II not exceeding the lesser of (a) the aggregate of (i) that part of the capital cost determined by reference to the use of the patent in the year, and (ii) the amount that would be computed under subparagraph (1)(c)(i) if the capital cost of the patent did not include the amounts determined by reference to the use of the patent in that year and previous years; and (b) the undepreciated capital cost to him as of the end of the taxation year (before making any deduction under this subsection for the taxation year) of property of the class. (9.1) Where a part or all of the capital cost to a taxpayer of property that is a patent, or a right to use patented information, is determined by reference to the use of the property and that property is included in Class 44 in Schedule II, in lieu of the deduction allowed under paragraph (1)(a), there may be deducted in computing the taxpayer’s income for a taxation year from a business or property such amount as the taxpayer may claim in respect of property of the class not exceeding the lesser of (a) the total of (i) that part of the capital cost that is determined by reference to the use of the property in the year, and (ii) the amount that would be deductible for the year by reason of paragraph (1)(a) in respect of property of the class if the capital cost of property of the class did not include the amounts determined under subparagraph (i) for the year and preceding taxation years; and (b) the undepreciated capital cost to the taxpayer as of the end of the taxation year (before making any deduction under this subsection for the taxation year) of property of the class. (10) Reserved. Rental Properties (11) Despite subsections (0.1) and (1), in no case shall the aggregate of deductions, each of which is a deduction in respect of property of a prescribed class owned by a taxpayer that includes rental property owned by him, otherwise allowed to the taxpayer by virtue of subsection (0.1) or (1) in computing his income for a taxation year, exceed the amount, if any, by which (a) the aggregate of amounts each of which is (i) his income for the year from renting or leasing a rental property owned by him, computed without regard to paragraph 20(1)(a) of the Act, or (ii) the income of a partnership for the year from renting or leasing a rental property of the partnership, to the extent of the taxpayer’s share of such income, exceeds (b) the aggregate of amounts each of which is (i) his loss for the year from renting or leasing a rental property owned by him, computed without regard to paragraph 20(1)(a) of the Act, or (ii) the loss of a partnership for the year from renting or leasing a rental property of the partnership, to the extent of the taxpayer’s share of such loss. (12) Subject to subsection (13), subsection (11) does not apply in respect of a taxation year of a taxpayer that was, throughout the year, (a) a life insurance corporation, or a corporation whose principal business was the leasing, rental, development or sale, or any combination thereof, of real property owned by it; or (b) a partnership each member of which was (i) a corporation described in paragraph (a), or (ii) another partnership described in this paragraph. (13) For the purposes of subsection (11), where a taxpayer or partnership has a leasehold interest in a property that is property of Class 1, 3 or 6 in Schedule II by virtue of subsection 1102(5) and the property is leased by the taxpayer or partnership to a person who owns the land, an interest therein or an option in respect ther