Income Tax Act — I-3.3 34.2
s deductible or is an allowable capital loss under subsection (4) in respect of a partnership for the year, is deemed to have the same character and to be in the same proportions as the income and taxable capital gains included in the corporation’s income for the immediately preceding taxation year under subsection (2) or (3) in respect of the partnership, (iv) an amount claimed as a reserve under subsection (11) in respect of a partnership for the year is deemed to have the same character and to be in the same proportions as the qualifying transitional income in respect of the partnership for the year, and (v) an amount, a portion of which is included in income under paragraph (12)(a), or is deemed to be a taxable capital gain under paragraph (12)(b), in respect of a partnership for the year, is deemed to have the same character and to be in the same proportions as the amount claimed as a reserve under subsection (11) in respect of the partnership for the immediately preceding taxation year; (b) a corporation’s capital dividend account, as defined in subsection 89(1), is to be determined without reference to this section; and (c) the reference in subparagraph 53(2)(c)(i.4) to an amount deducted under subsection (11) by a taxpayer includes an amount deemed to be an allowable capital loss under subparagraph (11)(b)(ii). Designation — qualified resource expense (6) A corporation may designate an amount for a taxation year in respect of a qualified resource expense under the definition adjusted stub period accrual in subsection (1) subject to the following rules: (a) the corporation cannot designate an amount for the year in respect of a qualified resource expense in respect of a partnership except to the extent the corporation obtains from the partnership, before the corporation’s filing-due date for the year, information in writing identifying the corporation’s qualified resource expenses described (i) in paragraph (h) of the definition Canadian exploration expense in subsection 66.1(6), determined as if those expenses had been incurred by the partnership in its last fiscal period that ended in the year, (ii) in paragraph (f) of the definition Canadian development expense in subsection 66.2(5), determined as if those expenses had been incurred by the partnership in its last fiscal period that ended in the year, (iii) in paragraph (e) of the definition foreign resource expense in subsection 66.21(1), determined as if those expenses had been incurred by the partnership in its last fiscal period that ended in the year, and (iv) in paragraph (b) of the definition Canadian oil and gas property expense in subsection 66.4(5), determined as if those expenses had been incurred by the partnership in its last fiscal period that ended in the year; and (b) the amount designated for the year by the corporation is not to exceed the maximum amount that would be deductible by the corporation under any of sections 66.1, 66.2, 66.21 and 66.4 in computing its income for the year if (i) the amounts referred to in paragraph (a) in respect of the partnership were the only amounts relevant in determining the maximum amount, and (ii) the fiscal period of the partnership that begins in the year and ends after the year had ended at the end of the year and each qualified resource expense were deemed under subsection 66(18) to be incurred by the corporation at the end of the year. No additional income — bankrupt (7) Subsections (2) and (3) do not apply in computing a corporation’s income for a taxation year in respect of a partnership if the corporation becomes a bankrupt in the year. Foreign affiliates (8) This section does not apply for the purposes of computing, for a taxation year of a foreign affiliate of a corporation resident in Canada, (a) the foreign accrual property income of the affiliate in respect of the corporation; and (b) except to the extent that the context otherwise requires, the exempt surplus or exempt deficit, the hybrid surplus or hy