Income Tax Regulations — 4608
4608 (1) In this section, joint exploration corporation has the meaning assigned by paragraph 66(15)(g) of the Act; ( société d’exploration en commun ) principal-business corporation has the meaning assigned by paragraph 66(15)(h) of the Act; ( société exploitant une entreprise principale ) shareholder corporation has the meaning assigned by paragraph 66(15)(i) of the Act; ( société actionnaire ) well means an exploratory probe or an oil or gas well. ( puits ) (2) For the purposes of the definition qualified Canadian exploration expenditure in subsection 127(9) of the Act, the prescribed expenditure of a taxpayer for a taxation year is the aggregate of all amounts each of which is the amount, if any, by which (a) the specified expenses of the taxpayer for the year in respect of the well exceed (b) the base amount of the taxpayer at the end of the year in respect of the well. (3) For the purposes of this section, the specified expenses of a taxpayer for a taxation year in respect of a well that is an exploratory probe is the aggregate of all expenses that (a) would be Canadian exploration expenses of the taxpayer by reason of any of subparagraphs 66.1(6)(a)(i), (iv) and (v) of the Act if the references in subparagraphs 66.1(6)(a)(iv) and (v) of the Act (as those subparagraphs read on November 30, 1985) to “any of subparagraphs (i) to (iii.1)” were read as references to “subparagraph (i)”; (b) were incurred (i) in the year, and (ii) after November 1985 and before 1991; (c) were incurred in the drilling or completing of the exploratory probe or in building a temporary access road to, or preparing the site in respect of, the probe; and (d) are not non-qualifying expenses of the taxpayer. (4) For the purposes of this section, the specified expenses of a taxpayer for a taxation year in respect of a well that is an oil or gas well is the aggregate of all expenses that (a) would be Canadian exploration expenses of the taxpayer by virtue of any of subparagraphs 66.1(6)(a)(ii) to (ii.2), (iv) and (v) of the Act if the references in subparagraphs 66.1(6)(a)(iv) and (v) of the Act (as those subparagraphs read on November 30, 1985) to “subparagraphs (i) to (iii.1)” were read as references to “subparagraphs (ii) to (ii.2)”; (b) were incurred in respect of the well (i) in the year, and (ii) after November 1985 and before 1991; and (c) are not non-qualifying expenses of the taxpayer. (5) For the purposes of subsections (3) and (4), a non-qualifying expense of a taxpayer is an expense that (a) may reasonably be regarded as having been incurred as consideration for services to be rendered after 1990 or for property that cannot reasonably be considered to be for use by the taxpayer before 1991; (b) was or is to be renounced by the taxpayer at any time under subsection 66(10.1) or (12.6) of the Act; (c) is or was a Canadian exploration and development overhead expense, within the meaning of section 1206, of the taxpayer, of a partnership of which the taxpayer was a member or of a joint exploration corporation of which the taxpayer was a shareholder corporation; (d) is an eligible cost or expense within the meaning of the Petroleum Incentives Program Act or the Petroleum Incentives Program Act , Chapter P-4.1 of the Statutes of Alberta, 1981, in respect of which, or in respect of part of which, the taxpayer, a partnership of which the taxpayer was a member, a joint exploration corporation of which the taxpayer was a shareholder corporation or a principal-business corporation of which the taxpayer was a shareholder, has received, is deemed to have received, is entitled to receive or may reasonably be expected to receive an incentive under either of those Acts; or (e) was included in determining the specified expenses of any other taxpayer for a taxation year. (6) For the purposes of this section, the base amount of a taxpayer at the end of a particular taxation year in respect of a well is the amount, if any, by which the taxpayer’s threshold amoun