Income Tax Regulations — 5301
5301 (1) Subject to subsections (6) and (8), for the purposes of subsections 157(4) and 161(9) of the Act, the first instalment base of a corporation for a particular taxation year means the product obtained when the aggregate of (a) the tax payable under Part I of the Act by the corporation for its taxation year preceding the particular year, and (b) the total of the taxes payable by the corporation under Parts VI, VI.1 and XIII.1 of the Act for its taxation year preceding the particular year is multiplied by the ratio that 365 is of the number of days in that preceding year. (2) Subject to subsections (6) and (8), for the purposes of subsections 157(4) and 161(9) of the Act, the second instalment base of a corporation for a particular taxation year means the amount of the first instalment base of the corporation for the taxation year immediately preceding the particular year. (3) For the purposes of subsection (1), where the number of days in the taxation year of a corporation immediately preceding the particular taxation year referred to therein is less than 183, the amount determined for the corporation under that subsection shall be the greater of (a) the amount otherwise determined for it under subsection (1); and (b) the amount that would be determined for it under subsection (1) if the reference in that subsection to “its taxation year preceding the particular year” were read as a reference to “its last taxation year, preceding the particular year, in which the number of days exceeds 182”. (4) Notwithstanding subsections (1) and (2), for the purposes of subsections 157(4) and 161(9) of the Act, (a) where a particular taxation year of a new corporation that was formed as a result of an amalgamation (within the meaning assigned by section 87 of the Act) is its first taxation year, (i) its first instalment base for the particular year means the total of all amounts each of which is equal to the product obtained when the total of (A) the tax payable under Part I of the Act, and (B) the total of the taxes payable under Parts VI, VI.1 and XIII.1 of the Act by a predecessor corporation (as defined in section 87 of the Act) for its last taxation year is multiplied by the ratio that 365 is to the number of days in that year, and (ii) its second instalment base for the particular year means the aggregate of all amounts each of which is an amount equal to the amount of the first instalment base of a predecessor corporation for its last taxation year; and (b) where a particular taxation year of a new corporation referred to in paragraph (a) is its second taxation year, (i) its first instalment base for the particular year means (A) where the number of days in its first taxation year is greater than 182, the amount that would, but for this subsection, be determined under subsection (1) for the year, and (B) in any other case, the greater of the amount that would, but for this subsection, be determined under subsection (1) for the year and its first instalment base for its first taxation year, and (ii) its second instalment base for the particular year means the amount of the first instalment base of the new corporation for its first taxation year. (5) For the purposes of subsection (4), where the number of days in the last taxation year of a predecessor corporation is less than 183, the amount determined under subparagraph (4)(a)(i) in respect of the predecessor corporation shall be the greater of (a) the amount otherwise determined under subparagraph (4)(a)(i) in respect of the predecessor corporation; and (b) the amount of the first instalment base of the predecessor corporation for its last taxation year. (6) Subject to subsection (7), where a subsidiary within the meaning of subsection 88(1) of the Act is winding up, and, at a particular time in the course of the winding up, all or substantially all of the property of the subsidiary has been distributed to a parent within the meaning of subsection 88(1) of the Act, the followin