Income Tax Regulations — 5204
5204 If a corporation is a member of a partnership at any time in a taxation year of the corporation, the following definitions apply: cost of capital of the corporation for the year means an amount equal to the aggregate of (a) 10 per cent of the aggregate of all amounts each of which is the gross cost to the corporation of a property referred to in paragraph 1100(1)(e), (f), (g) or (h), paragraph 1102(1)(d) or (g) or Schedule II that (i) was owned by the corporation at the end of the year, and (ii) was used by the corporation at any time during the year, (b) the aggregate of all amounts each of which is the rental cost incurred by the corporation during the year for the use of any property a portion of the gross cost of which would be included by virtue of paragraph (a) if the property were owned by the corporation at the end of the year, and (c) that proportion of the aggregate of the amounts that would be determined under paragraphs (a) and (b) in respect of the partnership for its fiscal period coinciding with or ending in the taxation year of the corporation if the references in those paragraphs to “the corporation” were read as references to “the partnership” and the references in those paragraphs to “the year” were read as references to “the fiscal period of the partnership coinciding with or ending in the year”, that (i) the corporation’s share of the income or loss of the partnership for that fiscal period is of (ii) the income or loss of the partnership for that fiscal period, as the case may be, but for the purposes of this definition, the gross cost of a property or rental cost for the use of any property does not include that portion of those costs that reflects the extent to which the property was used by the corporation during the year or by the partnership during its fiscal period coinciding with or ending in the year (d) in an active business carried on outside Canada, (e) to earn Canadian investment income or foreign investment income as defined in subsection 129(4) of the Act on the assumption that subsection 129(4) of the Act applied to a partnership as well as to a corporation, (f) in activities engaged in for the purpose of earning Canadian resource profits of the corporation or the partnership, as the case may be, or (g) in activities referred to in subparagraph 66(15)(b)(i), (ii) or (v), subparagraph 66(15)(e)(i) or (ii), subparagraph 66.1(6)(a)(i), (ii), (iii) or (v) or subparagraph 66.2(5)(a)(i), (ii) or (v) of the Act; ( coût en capital ) cost of labour of the corporation for the year means an amount equal to the aggregate of (a) the salaries and wages paid or payable during the year to all employees of the corporation for services performed during the year, (b) all other amounts each of which is an amount paid or payable during the year for the performance during the year, by any person other than an employee of the corporation, of functions relating to (i) the management or administration of the corporation, (ii) scientific research as defined in section 2900, or (iii) a service or function that would normally be performed by an employee of the corporation, and (c) that proportion of the aggregate of the amounts that would be determined under paragraphs (a) and (b) in respect of the partnership for its fiscal period coinciding with or ending in the taxation year of the corporation if the references in those paragraphs to “the corporation” were read as references to “the partnership” and the references in those paragraphs to “the year” were read as references to the “fiscal period of the partnership coinciding with or ending in the year”, that (i) the corporation’s share of the income or loss of the partnership for that fiscal period is of (ii) the income or loss of the partnership for that fiscal period, as the case may be, but for the purposes of this definition, the salaries and wages referred to in paragraph (a) or other amounts referred to in paragraph (b), of the corporation or the partnershi