Income Tax Act — I-3.3 66.7
Successor of Canadian exploration and development expenses 66.7 (1) Subject to subsections 66.7(6) and 66.7(7), where after 1971 a corporation (in this subsection referred to as the “successor”) acquired a particular Canadian resource property (whether by way of a purchase, amalgamation, merger, winding-up or otherwise), there may be deducted by the successor in computing its income for a taxation year an amount not exceeding the total of all amounts each of which is an amount determined in respect of an original owner of the particular property that is the lesser of (a) the Canadian exploration and development expenses incurred by the original owner before the original owner disposed of the particular property to the extent that those expenses were not otherwise deducted in computing the income of the successor for the year, were not deducted in computing the income of the successor for a preceding taxation year and were not deductible under subsection 66(1) or deducted under subsection 66(2) or 66(3) by the original owner, or deducted by any predecessor owner of the particular property, in computing income for any taxation year, and (b) the amount, if any, by which (i) the part of the successor’s income for the year that may reasonably be regarded as attributable to (A) the amount included in computing its income for the year under paragraph 59(3.2)(c) that may reasonably be regarded as attributable to the disposition by it in the year or a preceding taxation year of any interest in or right to — or, for civil law, any right in or to — the particular property to the extent that the proceeds of the disposition have not been included in determining an amount under clause 29(25)(d)(i)(A) of the Income Tax Application Rules , this clause, clause (3)(b)(i)(A) or paragraph (10)(g) for a preceding taxation year, (B) its reserve amount for the year in respect of the original owner and each predecessor owner, if any, of the particular property, or (C) production from the particular property, computed as if no deduction were allowed under section 29 of the Income Tax Application Rules , this section or any of sections 65 to 66.5, exceeds the total of (ii) all other amounts deducted under subsection 29(25) of the Income Tax Application Rules , this subsection and subsections 66.7(3), 66.7(4) and 66.7(5) for the year that can reasonably be regarded as attributable to the part of its income for the year described in subparagraph 66.7(1)(b)(i) in respect of the particular property, and (iii) all amounts added because of subsection 80(13) in computing the amount determined under subparagraph 66.7(1)(b)(i). Successor of foreign exploration and development expenses (2) Subject to subsections 66.7(6) and 66.7(8), where after 1971 a corporation (in this subsection referred to as the “successor”) acquired a particular foreign resource property (whether by way of a purchase, amalgamation, merger, winding-up or otherwise), there may be deducted by the successor in computing its income for a taxation year an amount not exceeding the total of all amounts each of which is an amount determined in respect of an original owner of the particular property that is the lesser of (a) the amount, if any, by which (i) the foreign exploration and development expenses incurred by the original owner before the original owner disposed of the particular property to the extent that those expenses were incurred when the original owner was resident in Canada, were not otherwise deducted in computing the successor’s income for the year, were not deducted in computing the successor’s income for a preceding taxation year and were not deductible by the original owner, nor deducted by any predecessor owner of the particular property, in computing income for any taxation year exceeds (ii) the total of all amounts each of which is an amount by which the amount described in this paragraph is required because of subsection 80(8) to be reduced at or before the end of the year,