Income Tax Regulations — 1100
be considered to be the portion of the revenue that has not been included in the investor’s income in the particular taxation year or a previous taxation year; (c) where, at any time, a revenue guarantee, other than (i) a revenue guarantee in respect of which paragraph (b) applies, or (ii) a revenue guarantee under which the person (in this subsection referred to as the “guarantor”) who agrees to provide the revenue under the terms of the guarantee is a person who does not deal at arm’s length with either the investor or the person from whom the investor acquired the film or tape (in this subsection referred to as the “vendor”) and in respect of which the Minister of Communications certifies that (A) the guarantor is a licenced broadcaster or bona fide film or tape distributor, and (B) the cost of the film or tape does not include any amount for or in respect of the guarantee, is entered into in respect of the film or tape, the amount, if any, that may reasonably be considered to be the portion of the revenue that is to be received by the investor under the terms of the revenue guarantee that has not been included in the investor’s income in the particular taxation year or a preceding taxation year, if (iii) the guarantor and the investor are not dealing at arm’s length, (iv) the vendor and the guarantor are not dealing at arm’s length, or (v) the vendor or a person not dealing at arm’s length with the vendor undertakes in any way, directly or indirectly, to fulfill all or any part of the guarantor’s obligations under the terms of the revenue guarantee; (d) where, at any time, a revenue guarantee, other than a revenue guarantee in respect of which paragraph (b) or (c) applies, is entered into in respect of the film or tape, the amount, if any, that may reasonably be considered to be the portion of the revenue that is to be received by the investor under the terms of the revenue guarantee that (i) is not due to the investor until a time that is more than four years after the first day on which the guarantor has the right to the use of the film or tape, and (ii) has not been included in the investor’s income in the particular taxation year or a previous taxation year; and (e) the portion of any debt obligation of the investor outstanding at the end of the particular year that is convertible into an interest in the film or tape or in the investor. (21.1) Despite subsections (0.1) and (1), where a taxpayer has acquired property described in paragraph (s) of Class 10 in Schedule II, or in paragraph (m) of Class 12 of Schedule II, the deduction in respect of the property otherwise allowed to the taxpayer under subsection (0.1) or (1) in computing the taxpayer’s income for a taxation year shall not exceed the amount that it would be if the capital cost to the taxpayer of the property were reduced by the portion of any debt obligation of the taxpayer outstanding at the end of the year that is convertible into an interest or, for civil law, a right in the property or an interest in the taxpayer. (22) Notwithstanding subsection (1), where an investor has acquired a film or tape after his 1977 taxation year and before 1979 and the principal photography or taping in respect of the film or tape is completed after a particular taxation year and not later than March 1, 1979, in no case shall the deduction in respect of property of Class 12 in Schedule II otherwise allowed to the investor by virtue of subsection (1) in computing his income for the particular taxation year exceed the amount, otherwise determined, if the capital cost to the investor of the film or tape were reduced by the amount, if any, by which (a) the capital cost to the investor of the film or tape as of the end of the year exceeds (b) the amount that may reasonably be considered to be the investor’s proportionate share of the production costs incurred in respect of the film or tape to March 1, 1979. (23) For the purposes of paragraph (21)(a), (a) in respect of a film or ta