Income Tax Regulations — 1100
e it last became a specified leasing property were blended payments of principal and interest, calculated in accordance with clause (B), on the loan applied firstly on account of interest on principal, secondly on account of interest on unpaid interest, and thirdly on account of principal, and (ii) the amount that would have been deductible under this section for the taxation year (in this subparagraph referred to as the “particular year”) that includes the time (in this subparagraph referred to as the “particular time”) at which the property last became a specified leasing property of the taxpayer, if (A) the property had been transferred to a separate prescribed class at the later of (I) the beginning of the particular year, and (II) the time at which the property was acquired by the taxpayer, (B) the particular year had ended immediately before the particular time, and (C) where the property was not a specified leasing property immediately before the particular time, subsection (3) had applied, exceeds (iii) the aggregate of all amounts deducted by the taxpayer in respect of the property by reason of this subsection before the commencement of the year and after the time at which it last became a specified leasing property; and (b) the amount, if any, by which, (i) the aggregate of all amounts that would have been deducted by the taxpayer under this Part in respect of the property under paragraph 20(1)(a) of the Act in computing the income of the taxpayer for the year and all preceding taxation years had this subsection and subsections (11) and (15) not applied, and had the taxpayer, in each such year, deducted under paragraph 20(1)(a) of the Act the maximum amount allowed under this Part, read without reference to this subsection and subsections (11) and (15), in respect of the property, exceeds (ii) the total depreciation allowed to the taxpayer before the commencement of the year in respect of the property. (1.11) In this section and subsection 1101(5n), specified leasing property of a taxpayer at any time means depreciable property (other than exempt property) that is (a) used at that time by the taxpayer or a person with whom the taxpayer does not deal at arm’s length principally for the purpose of gaining or producing gross revenue that is rent or leasing revenue, (b) the subject of a lease at that time to a person with whom the taxpayer deals at arm’s length and that, at the time the lease was entered into, was a lease for a term of more than one year, and (c) the subject of a lease of property where the tangible property, other than exempt property, that was the subject of the lease had, at the time the lease was entered into, an aggregate fair market value in excess of $25,000, but, for greater certainty, does not include intangible property, or for civil law incorporeal property, (including systems software and property referred to in paragraph (w) of Class 10 or paragraph (n) or (o) of Class 12 in Schedule II). (1.12) Despite subsections (0.1), (1) and (1.1), where, in a taxation year, a taxpayer has acquired a property that was not used by the taxpayer for any purpose in that year and the first use of the property by the taxpayer is a lease of the property in respect of which subsection (1.1) applies, the amount allowed to the taxpayer under subsections (0.1) and (1) in respect of the property for the year shall be deemed to be nil. (1.13) For the purposes of this section, (a) exempt property means (i) general purpose office furniture or office equipment included in Class 8 in Schedule II (including, for greater certainty, mobile office equipment such as cellular telephones and pagers) or general purpose electronic data processing equipment and ancillary data processing equipment, included in paragraph (f) of Class 10 in Schedule II, other than any individual piece thereof having a capital cost to the taxpayer in excess of $1,000,000, (i.1) general-purpose electronic data processing equipment and ancillary data p