Income Tax Regulations — 1100
his loss for the year from renting, leasing or earning royalties from, a property referred to in subparagraph (a)(i), computed without regard to paragraph 20(1)(a) of the Act, or (ii) the loss of a partnership for the year from renting, leasing or earning royalties from, a property referred to in subparagraph (a)(ii), to the extent of the taxpayer’s share of such loss. (16) Subsection (15) does not apply in respect of a taxation year of a taxpayer that was, throughout the year, (a) a corporation whose principal business was (i) renting or leasing of leasing property or property that would be leasing property but for subsection (18), (19) or (20), or (ii) renting or leasing of property referred to in subparagraph (i) combined with selling and servicing of property of the same general type and description, if the gross revenue of the corporation for the year from such principal business was not less than 90 per cent of the gross revenue of the corporation for the year from all sources; or (b) a partnership each member of which was (i) a corporation described in paragraph (a), or (ii) another partnership described in this paragraph. (17) Subject to subsection (18), in this section and section 1101, leasing property of a taxpayer or a partnership means depreciable property other than (a) rental property, (b) computer tax shelter property, or (c) property referred to in paragraph (w) of Class 10 or in paragraph (n) of Class 12 in Schedule II, where such property is owned by the taxpayer or the partnership, whether jointly with another person or otherwise, if, in the taxation year in respect of which the expression is being applied, the property was used by the taxpayer or the partnership principally for the purpose of gaining or producing gross revenue that is rent, royalty or leasing revenue, but for greater certainty, does not include a property leased by the taxpayer or the partnership to a lessee, in the ordinary course of the taxpayer’s or partnership’s business of selling goods or rendering services, under an agreement by which the lessee undertakes to use the property to carry on the business of selling, or promoting the sale of, the taxpayer’s or partnership’s goods or services. (17.1) For the purposes of subsection (17), where, in a taxation year, a taxpayer or a partnership has acquired a property (a) that was not used for any purpose in that year, and (b) the first use of the property by the taxpayer or the partnership was principally for the purpose of gaining or producing gross revenue that is rent, royalty or leasing revenue, the property shall be deemed to have been used in the taxation year in which it was acquired principally for the purpose of gaining or producing gross revenue that is rent, royalty or leasing revenue. (17.2) For the purposes of subsections (1.11) and (17), gross revenue derived in a taxation year from (a) the right of a person or partnership, other than the owner of a property, to use or occupy the property or a part thereof, and (b) services offered to a person or partnership that are ancillary to the use or occupation by the person or partnership of the property or the part thereof shall be considered to be rent derived in the year from the property. (17.3) Subsection (17.2) does not apply in any particular taxation year to property owned by (a) a corporation, where the property is used in a business carried on in the year by the corporation; (b) an individual, where the property is used in a business carried on in the year by the individual in which he is personally active on a continuous basis throughout that portion of the year during which the business is ordinarily carried on; or (c) a partnership, where the property is used in a business carried on in the year by the partnership if at least 2/3 of the income or loss, as the case may be, of the partnership for the year is included in the determination of the income of (i) members of the partnership who are individuals that are personally a