Income Tax Act — I-3.3 34.2
n the case of a corporation that is a member of a partnership in respect of which there is a multi-tier alignment, the corporation has been a member of the partnership continuously since before March 22, 2011 to the end of the year, (ii) in the case of a corporation that is a member of a partnership in respect of which there is no multi-tier alignment, the corporation is a member of the partnership (A) at the end of the partnership’s fiscal period that begins before March 22, 2011 and ends in the year of the corporation that includes March 22, 2011, (B) at the end of the partnership’s fiscal period commencing immediately after the fiscal period referred to in clause (A) and continues to be a member until after the end of the year of the corporation that includes March 22, 2011, and (C) continuously since before March 22, 2011 until the end of the year; (b) if at the end of the year or at any time in the following taxation year, (i) the corporation’s income is exempt from tax under this Part, or (ii) the corporation is non-resident and the partnership does not carry on business through a permanent establishment (as defined for the purpose of subsection 16.1(1)) in Canada; or (c) if the year ends immediately before another taxation year (i) at the beginning of which the partnership no longer principally carries on the activities to which the reserve relates, (ii) in which the corporation becomes a bankrupt, or (iii) in which the corporation is dissolved or wound up (other than in circumstances to which subsection 88(1) applies). Deemed partner (14) A corporation that cannot claim an amount under subsection (11) for a taxation year in respect of a partnership solely because it has disposed of its interest in the partnership is deemed for the purposes of paragraph (13)(a) to be a member of a partnership continuously until the end of the taxation year if (a) the corporation disposed of its interest to another corporation related to, or affiliated with, the corporation at the time of the disposition; and (b) a corporation related to, or affiliated with, the corporation has the partnership interest referred to in paragraph (a) at the end of the taxation year. Computing qualifying transitional income — special rules (15) For the purposes of determining a corporation’s qualifying transitional income, the income or loss, as the case may be, of a partnership for a fiscal period shall be computed as if (a) the partnership had deducted for the period the maximum amount deductible in respect of any expense, reserve, allowance or other amount; (b) this Act were read without reference to paragraph 28(1)(b); and (c) the partnership had made an election under paragraph 34(a). Qualifying transition income adjustment  — conditions for application (16) Subsection (17) applies for a particular taxation year of a corporation and for each subsequent taxation year for which the corporation may claim an amount under subsection (11) in respect of a partnership if the particular year is the first taxation year (a) that is after the taxation year in which the corporation has, or would have if the partnership had income, an adjusted stub period accrual that is included in the corporation’s qualifying transitional income in respect of the partnership by reason of paragraph (b) of the definition qualifying transitional income in subsection (1); and (b) in which ends the fiscal period of the partnership that began in the taxation year referred to in paragraph (a). Adjustment of qualifying transitional income (17) If this subsection applies in respect of a partnership for a taxation year of a corporation, the adjusted stub period accrual included in the corporation’s qualifying transitional income in respect of the partnership for the year is computed as if (a) the descriptions in paragraph (a) and subparagraph (b)(i) of the definition adjusted stub period accrual in subsection (1) read as follows: A is the total of all amounts each of which is the corporation