Income Tax Act — I-3.3 40
perty of which is such a film production) on expenditures contemplated by the document that was filed before February 22, 1994; (c) the amount was raised before 1995 pursuant to the terms of an offering memorandum distributed as part of an offering of securities where (i) the memorandum contained a complete or substantially complete description of the securities contemplated in the offering as well as the terms and conditions of the offering, (ii) the memorandum was distributed before February 22, 1994, (iii) solicitations in respect of the sale of the securities contemplated by the memorandum were made before February 22, 1994, (iv) the sale of the securities was substantially in accordance with the memorandum, and (v) the funds are expended in accordance with the memorandum before 1995 (except that the funds may be expended before March 2, 1995 in the case of a partnership all or substantially all of the property of which is a film production prescribed for the purpose of subparagraph 96(2.2)(d)(ii) the principal photography of which or, in the case of such a production that is a television series, one episode of the series, commences before 1995 and the production is completed before March 2, 1995, or an interest in one or more partnerships all or substantially all of the property of which is such a film production); or (d) the amount was used for an activity that was carried on by the partnership on February 22, 1994 but not for a significant expansion of the activity nor for the acquisition or production of a film production. Whether carrying on business before February 22, 1994 (3.17) For the purpose of subsection 40(3.15), a partnership in respect of which paragraph 40(3.16)(a), 40(3.16)(b) or 40(3.16)(c) applies shall be considered to have actively carried on the business, or earned income from the property, contemplated in the document referred to in that paragraph throughout the period beginning February 22, 1994 and ending on the earlier of the closing date, if any, stipulated in the document and January 1, 1995. Deemed partner (3.18) For the purpose of subsection 40(3.1), a member of a partnership who acquired an interest in the partnership after February 22, 1994 shall be deemed to have held the interest on February 22, 1994 where the member acquired the interest (a) in circumstances in which (i) paragraph 70(6)(d.1) applied, (ii) where the member is an individual, the member’s spouse or common-law partner held the partnership interest on February 22, 1994, (iii) where the member is a trust, the taxpayer by whose will the trust was created held the partnership interest on February 22, 1994, and (iv) the partnership interest was, immediately before the death of the spouse or common-law partner or the taxpayer, as the case may be, an excluded interest; (b) in circumstances in which (i) paragraph 70(9.2)(c) applied, (ii) the member’s parent held the partnership interest on February 22, 1994, and (iii) the partnership interest was, immediately before the parent’s death, an excluded interest; (c) in circumstances in which (i) paragraph 70(9.3)(e) applied, (ii) the trust referred to in subsection 70(9.3) or the taxpayer by whose will the trust was created held the partnership interest on February 22, 1994, and (iii) the partnership interest was, immediately before the death of the spouse or common-law partner referred to in subsection 70(9.3), an excluded interest; or (d) before 1995 pursuant to a document referred to in subparagraph 40(3.16)(a)(i) or paragraph 40(3.16)(b) or 40(3.16)(c). Non-application of subsection (3) (3.19) Subsection 40(3) does not apply in any case where subsection 40(3.1) applies. Non-application of subsection (3.1) (3.2) Subsection 40(3.1) does not apply in any case where paragraph 98(1)(c) or 98.1(1)(c) applies. Deemed capital gain under section 180.01 (3.21) If, in respect of a taxation year, a taxpayer has made an election under subsection 180.01(1), the amount deemed to be a capital gain un