Income Tax Regulations — 1212
, each of which is an amount in respect of a disposition of property (other than a disposition of property, that had been used by the taxpayer, to any person with whom the taxpayer was not dealing at arm’s length) of the taxpayer before the earlier of December 12, 1979 and the particular time, the capital cost of which was added in computing the taxpayer’s supplementary depletion base by virtue of paragraph (a) or in computing the supplementary depletion base of a predecessor by virtue of paragraph (a) as it applied to the predecessor where the taxpayer is a successor corporation to the predecessor, as the case may be, and each of which is the amount that is equal to the lesser of (i) the proceeds of disposition of the property, and (ii) the capital cost of the property to the taxpayer or the predecessor, as the case may be, computed as if no amount had been included therein that is a cost of borrowing capital, including a cost incurred prior to the commencement of carrying on a business; (h) 33 1/3 per cent of the aggregate of all amounts, each of which is an amount in respect of a disposition of property (other than a disposition of property, that had been used by the taxpayer, to any person with whom the taxpayer was not dealing at arm’s length) of the taxpayer before the earlier of December 12, 1979 and the particular time, the capital cost of which was added in computing the taxpayer’s supplementary depletion base by virtue of paragraph (b) or in computing the supplementary depletion base of a predecessor by virtue of paragraph (b) as it applied to the predecessor where the taxpayer is a successor corporation to the predecessor, as the case may be, and each of which is the amount that is equal to the lesser of (i) the proceeds of disposition of the property, and (ii) the capital cost of the property to the taxpayer or the predecessor, as the case may be, computed as if no amount had been included therein that is a cost of borrowing capital, including any cost incurred prior to the commencement of carrying on a business; and (i) where the taxpayer is a predecessor, any amount required by paragraph (4)(b) to be deducted before the particular time in computing the taxpayer’s supplementary depletion base. (4) Subject to subsections 1202(5) and (6), where a corporation (in this section referred to as the “successor corporation”) has at any time (in this subsection referred to as the “time of acquisition”) after April 19, 1983 and in a taxation year (in this subsection referred to as the “transaction year”) acquired a property from another person (in this subsection referred to as the “predecessor”), the following rules apply: (a) for the purpose of computing the supplementary depletion base of the successor corporation as of any time after the time of acquisition, there shall be added an amount equal to the amount required by paragraph (b) to be deducted in computing the supplementary depletion base of the predecessor; and (b) for the purpose of computing the supplementary depletion base of the predecessor as of any time after the transaction year of the predecessor, there shall be deducted the amount, if any, by which (i) the supplementary depletion base of the predecessor immediately after the time of acquisition (assuming for this purpose that, in the case of an acquisition as a result of an amalgamation described in section 87 of the Act, the predecessor existed after the time of acquisition and no property was acquired or disposed of in the course of the amalgamation) exceeds (ii) the amount, if any, deducted under subsection (1) in computing the income of the predecessor for the transaction year of the predecessor. (5) [Repealed, SOR/91-79, s. 10] [NOTE: Application provisions are not included in the consolidated text; see relevant amending Acts and regulations.] SOR/79-245, s. 7; SOR/80-418, s. 6; SOR/81-974, s. 11; SOR/85-174, s. 11; SOR/85-696, ss. 2, 6; SOR/90-113, s. 8; SOR/90-733, s. 6; SOR/91-79, s. 10; SOR/94-686