Income Tax Regulations — 5907
f the affiliate any taxable capital gain or allowable capital loss from the disposition of which would, if that excluded property were disposed of, be included under any of paragraphs (c) to (e) of this definition or of the definition net loss , as the case may be, is the amount, if any, by which (iv) the portion of the affiliate’s taxable capital gain for the year from the particular disposition that accrued after its 1975 taxation year exceeds (v) the portion of any income or profits tax paid to the government of a country for the year by the affiliate that can reasonably be regarded as tax that was paid for the year in respect of the amount determined under subparagraph (iv); ( gains nets ) net loss of a foreign affiliate of a corporation for a taxation year of the affiliate (a) from an active business carried on by it in a country is the amount of its loss for the year from that active business carried on in that country minus the portion of any income or profits tax refunded by the government of a country for the year to the affiliate that can reasonably be regarded as tax refunded in respect of that loss, (b) in respect of foreign accrual property income is the amount, if any, by which (i) the amount, if any, by which (A) the total of (I) the amount that would be determined for D in the formula in the definition foreign accrual property income in subsection 95(1) of the Act for the year, if the Act were read without regard to its clauses 95(2)(f.11)(ii)(D) and (E), (II) the amount determined under paragraph (a) of the description of E in that formula for the year, (III) the amount determined for G in that formula for the year, and (IV) the amount determined for H in that formula for the year exceeds (B) the total of the amounts determined under the descriptions of A, A.1, A.2, B and C in the definition foreign accrual property income in subsection 95(1) of the Act for the year exceeds (ii) the portion of any income or profits tax refunded by the government of a country for the year to the affiliate that can reasonably be regarded as tax refunded in respect of the amount determined under subparagraph (i), (c) from dispositions of property used or held by it principally for the purpose of gaining or producing income from an active business carried on by it in a country that is not a designated treaty country (other than Canada) is the amount, if any, by which (i) the portion of the affiliate’s allowable capital losses for the year from those dispositions that can reasonably be considered to have accrued after November 12, 1981 exceeds (ii) the portion of any income or profits tax refunded by the government of a country for the year to the affiliate that can reasonably be regarded as tax refunded in respect of the amount determined under subparagraph (i), (d) [Repealed, 2013, c. 34, s. 85] (e) from the disposition of a property, that is an excluded property of the affiliate that is described in paragraph (c) of the definition excluded property in subsection 95(1) of the Act but that would not be an excluded property of the affiliate if that paragraph were read in the manner described in sub-subclause (d)(ii)(E)(II)2 of the definition exempt earnings is the amount, if any, by which (i) the portion of the affiliate’s allowable capital loss for the year from the disposition of the property that accrued after its 1975 taxation year exceeds (ii) the portion of any income or profits tax refunded by the government of a country for the year to the affiliate that can reasonably be regarded as tax that was refunded in respect of the amount determined under subparagraph (i), and (f) from a particular disposition of a property, that is an excluded property of the affiliate because of paragraph (c.1) of the definition excluded property in subsection 95(1) of the Act, that related to (i) an amount that was receivable under an agreement that relates to the sale of a particular property the taxable capital gain or allowable capital loss fr