Income Tax Application Rules — I-3.31 26
ological and geophysical expenses, incurred by the partnership while the taxpayer was a member thereof, on or in respect of exploring or drilling for petroleum or natural gas in Canada as were incurred in the period and after 1948, to the extent that those expenses were not deducted in computing the taxpayer’s income from the partnership for the taxpayer’s 1971 or any preceding taxation year, and (g) all amounts received by the taxpayer before 1972 as, on account of, in lieu of payment of or in satisfaction of, a distribution of the taxpayer’s share of the partnership profits or partnership capital. Idem (15) For the purposes of this section and subsection 88(2.1) of the amended Act, the actual cost to a taxpayer, as of any particular time after 1971, of any shares (in this subsection referred to as “new shares”) of any class of the capital stock of a new corporation formed as a result of an amalgamation of two or more corporations (within the meaning of section 85 i of the former Act as it read in its application to the 1971 taxation year) that were (a) owned by the taxpayer on December 31, 1971, and thereafter without interruption until the particular time, and (b) acquired by the taxpayer by the conversion, because of the amalgamation, of shares of the capital stock of a predecessor corporation into shares of the capital stock of the new corporation, means that proportion of the actual cost to the taxpayer of any shares owned by the taxpayer that were so converted because of the amalgamation that the fair market value, immediately after the amalgamation, of the new shares of that class so acquired by the taxpayer is of the fair market value, immediately after the amalgamation, of all of the shares of the capital stock of the new corporation so acquired by the taxpayer. Idem (16) For the purposes of this section, the actual cost to an individual, as of any particular time after 1971, of any share of the capital stock of a corporation that was (a) owned by the individual on December 31, 1971 and thereafter without interruption until the particular time, and (b) acquired by the individual in a taxation year before 1972 under an agreement referred to in subsection 85 a (1) of the former Act as it read in its application to that taxation year, means an amount equal to the greater of (c) the actual cost to the individual of the share computed without regard to this subsection, and (d) the fair market value of the share at the time the individual so acquired it. Idem (17) For the purposes of this section and subsection 88(2.1) of the amended Act, the actual cost to a taxpayer, as of any particular time after 1971, of any capital property received by the taxpayer before 1972 and owned by the taxpayer thereafter without interruption until the particular time means, (a) where the property was so received as, on account of, in lieu of payment of or in satisfaction of, a dividend payable in kind (other than a stock dividend) in respect of a share owned by the taxpayer of the capital stock of a corporation, the fair market value of that property at the time the property was so received; (b) where the property so received was a share of the capital stock of a corporation received by the taxpayer as a stock dividend, the amount that, because of the receipt of the share, was deemed by subsection 81(3) of the former Act to have been received by the taxpayer as a dividend; and (c) where the property was so received from a pension fund or plan, an employees profit sharing plan, a retirement savings plan, a deferred profit sharing plan or a supplementary unemployment benefit plan, the fair market value of that property at the time the property was so received. Application (17.1) Where a taxpayer is deemed to have acquired a property because of subsection 138(11.3) of the amended Act, this section does not apply in respect of any subsequent disposition or deemed disposition of the property. Transfer of farm land by a farmer to his child at deat