Income Tax Regulations — 1102
lass 41 of that person or partnership immediately before the disposition of the property by the person or partnership and the amount, if any, by which that undepreciated capital cost is reduced as a result of that disposition; and (b) there shall be included in Class 41.1 of the taxpayer that portion, if any, of the property that is not the portion included in Class 41 of the taxpayer under paragraph (a). (14.12) If, after March 20, 2013, a taxpayer acquires a property (other than an oil sands property) in circumstances to which subsection (14) applies and the property was depreciable property that was included in Class 41, because of paragraph (a) or (a.1) of that Class, by the person or partnership from whom the taxpayer acquired the property, the following rules apply: (a) there may be included in Class 41 of the taxpayer only that portion of the property the capital cost of which portion to the taxpayer is the lesser of the undepreciated capital cost of Class 41 of that person or partnership immediately before the disposition of the property by the person or partnership and the amount, if any, by which that undepreciated capital cost is reduced as a result of that disposition; and (b) there shall be included in Class 41.2 of the taxpayer that portion, if any, of the property that is not the portion included in Class 41 of the taxpayer under paragraph (a). (14.13) Subsection (14) does not apply to an acquisition of property by a taxpayer from a person in respect of which the property was included in any of Classes 54 to 56. Townsite Costs (14.2) For the purpose of paragraph 13(7.5)(a) of the Act, a property is prescribed in respect of a taxpayer where the property would, if it had been acquired by the taxpayer, be property included in Class 10 in Schedule II because of paragraph (l) of that Class. Surface Construction and Bridges (14.3) For the purpose of paragraph 13(7.5)(b) of the Act, prescribed property is any of (a) a road (other than a specified temporary access road), sidewalk, airplane runway, parking area, storage area or similar surface construction; (b) a bridge; and (c) a property that is ancillary to any property described in paragraph (a) or (b). Manufacturing and Processing Enterprises (15) For the purposes of subsection 13(10) of the Act, (a) property is hereby prescribed that is (i) a building included in Class 3 or 6 in Schedule II, or (ii) machinery or equipment included in Class 8 in Schedule II, except (iii) property that may reasonably be regarded as having been acquired for the purpose of producing coal from a coal mine or oil, gas, metals or industrial minerals from a resource referred to in section 1201 as it read immediately before it was repealed by section 2 of Order in Council P.C. 1975-1323 of June 12, 1975, or (iv) property acquired for use outside Canada; and (b) a business carried on by the taxpayer is hereby prescribed as a manufacturing or processing business if, (i) for the fiscal period in which the property was acquired, or (ii) for the fiscal period in which a reasonable volume of business was first carried on, whichever was later, the revenue received by the taxpayer, in the course of carrying on the business from (iii) the sale of goods processed or manufactured by the taxpayer in Canada, (iv) the leasing or renting of goods that were processed or manufactured by the taxpayer in Canada, (v) advertisements in a newspaper or magazine that was produced by the taxpayer in Canada, and (vi) construction carried on by the taxpayer in Canada, was not less than 2/3 of the revenue of the business for the period. (16) For the purposes of paragraph (15)(b), revenue means gross revenue minus the aggregate of (a) amounts that were paid or credited in the period, to customers of the business, in relation to such revenue as a bonus, rebate or discount or for returned or damaged goods; and (b) amounts included therein by virtue of section 13 or subsection 23(1) of the Act. Election for Certain Manufa