,canada ,cu/oms #a & ,rev5ue ,ag5cy ,9tepret,n ,bullet9 ,subject3 ,9come ,tax ,act ,special ,res]ves ,numb]3 ,,it-#aed;,r ,date3 ,febru>y #ai1 #aihh ,ref];e3 ,p>agraphs #bj7#a77m71 7m4#a71 7m4#b7 & 7n7 7al subsec;ns #bj7#f71 7#g71 7#h71 7#bd7 & 7#be71 #hh7#a7 & #bh7#a7 & p>agraphs #ab7#a77a7 & 7e71 #gb7#a77a7 & #hg7#b77i7 & 7j77 ,applic,n ,? bullet9 c.els & replaces ,9t]pret,n ,bullet9 ,,it-#aed dat$ ,m>* #ad1 #aigd4 ,curr5t revi.ns >e designat$ 0v]tical l9es4 #a ,summ>y a#a ,"u specifi$ 3di;ns1 ! ,act provides = special res]ves : 5a# a taxpay] 6deduct1 9 -put+ 9come f a busi;s =a tax,n ye>1 am.ts 9clud$ 9 s* 9come t1 9 v g5]al t]ms1 may 2 reg>d$ ei z une>n$ 9come or anticipat$ future liabilities4 ,al? any s* res]ve am.t deduct$ 9 "o ye> m/ 2 a4$ back 69come 9 ! immly foll[+ ye>1 a new res]ve may 2 e/abli%$1 subject 6c]ta9 limits1 = ea* ye> s l;g z ! specifi$ 3di;ns prevail4 ,? bullet9 d1ls only ) res]ves t p]ta9 6transac;ns o!r ?an ^? 9volv+ returna# 3ta9]s 7see ,,it-#afe;,r7 &! sale ( r1l e/ate 7see ,,it-#aeb;,r#c74 ,4cus.n & ,9t]pret,n ,res]ve 9 ,respect ( ,gds & ,s]vices #a4 ,"u ! provi.ns ( subp>agraph #ab7#a77a77;i71 any am.t t is #b ,,it-#aed;,r b#a rcvd 9 a tax,n ye> 0a taxpay] 9 ! c\rse ( c>ry+ on busi;s t is on a3.t ( s]vices n r5d]$ or gds n deliv]$ 2f ! 5d (! ye> or t1 = any o!r r1son1 may 2 reg>d$ z n hav+ be5 e>n$ 9 ! ye> or a previ\s ye>1 m/ 2 9clud$ 9 -put+ ! taxpay]'s 9come f ! busi;s =! ye>4 #b4 ,": an am.t has be5 9clud$ 9 a taxpay]'s 9come 9 a3ord.e ) subp>agraph #ab7#a77a77;i71 p>agraph #bj7#a77m7 provides a def];t ( tax,n on s* une>n$ 9come 0p]mitt+ a taxpay] 6deduct1 9 -put+ 9come f a busi;s =a tax,n ye>1 an am.t n exce$+ a r1sona# am.t z a res]ve 9 respect ( 7a7 gds t x is r1sonably anticipat$ w h 6be deliv]$ af ! 5d (! ye>1 --------------------------------------#b 7b7 s]vices t x is r1sonably anticipat$ w h 6be r5d]$ af ! 5d (! ye>1 or 7c7 p]iods = : r5t or any o!r *>ge =! posses.n or use ( l& or *attels has be5 pd 9 adv.e 7see #h 2l74 #c ,,it-#aed;,r a#b ,h["e1 ! am.t ( ? res]ve is subject 6re/ric;ns impos$ 0subsec;ns #bj7#f7 & 7#g7 : >e expla9$ 9 #c & #f1 respectively1 2l4 #c4 ,subsec;n #bj7#f7 limits ! am.t t is deducti# z a res]ve pursuant 6p>agraph #bj7#a77m7 9 respect ( 7a7 >ticles ( food & dr9k t 7 n deliv]$ 2f ! 5d (! ye>1 or 7b7 transport,n n provid$ 2f ! 5d (! ye> 6an am.t n exce$+ ! a7regate (! am.ts 9 respect "!( t 7 actu,y 9clud$ 9 -put+ ! taxpay]'s 9come f ! busi;s =! ye>4 ,?us1 ! s-call$ 8ticket res]ves0 ( taxpay]s at ! 5d (a tax,n ye> may n exce$ ! doll> am.t at t "t ( unredeem$ tickets : 7 issu$ dur+ ! tax,n ye> & 9clud$ 9 t ye>'s 9come4 ,a taxpay] :o _c det]m9e ! am.t ( unredeem$ tickets may calculate ! am.t on ! basis ( pa/ exp]i;e4 #d ,,it-#aed;,r b#b #d4 ,": subsec;n #bj7#f7 is n applica#1 a r1sona# am.t =a res]ve norm,y is ! gross proce$s rcvd 0! taxpay]1 9 ei ! curr5t or a prec$+ ye>1 9 respect ( ^? gds or s]vices : pa/ exp]i;e or o!r factors 9dicate w h 6be deliv]$ or provid$ af ! 5d (! ye>4 ,"! is no ne$ 6e/imate ! pr(it on s* gds or s]vices s9ce ! res]ve is n re/rict$ 6! e/imat$ co/s (! gds 6be deliv]$ or ! s]vices 6be r5d]$4 #e4 ,": a taxpay] issues trad+ /amps or special ca% regi/] tapes ) an "utak+ 6redeem !m = m]*&ise1 a r1sona# res]ve is all[a# =! co/ ( m]*&ise t w h 6be deliv]$ 6redeem /amps or tapes issu$ & n redeem$ 0! 5d (! tax,n ye>4 #f4 ,0virtue ( subsec;n #bj7#g71 p>agraph #bj7#a77m7 does n apply 6all[ a deduc;n 7a7 9 -put+ 9come f a busi;s ": s* 9come is -put$ 9 a3ord.e )! 8ca% me?od0 z au?oriz$ 0subsec;n #bh7#a71 or #e ,,it-#aed;,r c#b 7b7 ( any am.t z a res]ve 9 respect ( 7;i7 gu>antees1 9demnities or w>ranties1 or 7;ii7 9sur.e1 except t 9 -put+ 9come =a tax,n ye> f an 9sur.e busi;s1 o!r ?an a life 9sur.e busi;s1 an 9sur.e corpor,n may deduct prescrib$ am.ts z policy res]ves4 --------------------------------------#c #g4 ,! g5]al limit,ns ( subsec;n #bj7#g71 z describ$ 9 #f abv1 d n apply 6a res]ve : is au?oriz$ 0p>agraph #bj7#a77m4#a7 =! #aigi & subsequ5t tax,n ye>s4 ,"u p>agraph #bj7#a77m4#a71 ": a taxpay] has sold an ext5d$ w>ranty plan 6a p]son ) :om ! taxpay] 0 d1l+ at >m's l5g? & provid$ t 7a7 ! taxpay]1 9 -put+ 9come f a busi;s =a tax,n ye>1 has 9clud$ an am.t 9 respect (! sale (! plan1 7b7 ! taxpay]'s only oblig,n "u ! plan is 6provide gds & s]vices ) respect #f ,,it-#aed;,r a#c only 6prop]ty manufactur$ 0! taxpay] or 0a corpor,n relat$ 6! taxpay]1 & 7c7 ! taxpay] has 9sur$ ! liabil;y "u ! plan ) an 9sur] t c>ries on an 9sur.e busi;s 9 ,canada1 ! taxpay]1 9 -put+ 9come =! ye>1 may deduct a r1sona# am.t 9 respect ( gds or s]vices t pursuant 6! plan x is r1sonably anticipat$ w h 6be deliv]$ or r5d]$ af ! 5d (! ye>1 n exce$+1 h["e1 t por;n (! 9sur.e premium pd or paya# t relates 6! p]iod af ! 5d (! ye> & 6! taxpay]'s liabil;y 9 respect ( an \tlay or exp5se made or 9curr$ af ,decemb] #aa1 #aigi4 ,res]ve 9 ,respect ( ,r5t ,rcvd 9 ,adv.e #h4 ,subp>agraph #bj7#a77m77;iii7 p]mits a taxpay] 6deduct1 9 -put+ 9come =a tax,n ye>1 a r1sona# am.t z a res]ve 9 respect ( r5t =! posses.n or use ( l& or *attels t has be5 rcvd 9 adv.e #g ,,it-#aed;,r b#c & 9clud$ 9 -put+ ! taxpay]'s 9come f a busi;s =! ye> or a previ\s ye>4 ,norm,y1 a r1sona# am.t = ? purpose is t "p (! r5t rcvd 9 adv.e : relates 6! p]iod af ! 5d (! ye> = : posses.n or use (! l& or *attels m/ 2 made availa#4 8,l&0 9cludes any build+s or o!r /ructures "!on1 & 8*attels0 9cludes a %ip4 ,transf] ( an ,oblig,n 6,provide ,gds or ,s]vices #i4 ,": a taxpay] 7! pay]7 has 7a7 "u p>agraph #ab7#a77a71 9clud$ 9 9come =a tax,n ye> an am.t t is on a3.t ( gds n deliv]$ or s]vices n r5d]$ 2f ! 5d (! ye>1 & 7b7 has pd a r1sona# am.t 6ano!r taxpay] 7! recipi5t7 = "utak+ 6provide s* gds & s]vices1 ) respect 6! #aihb & subsequ5t tax,n ye>s1 if ! pay] #h ,,it-#aed;,r c#c &! recipi5t h jo9tly & validly elect$ 9 a3ord.e ) subsec;n #bj7#be71 ! foll[+ rules apply3 7c7 ! pay]1 0virtue ( subsec;n #bj7#bd71 may deduct ! am.t s pd 9 -put+ 9come =! tax,n ye> 9 : ! pay;t 0 made1 --------------------------------------#d 7d7 ! recipi5t1 =! purpose ( p>agraph #ab7#a77a71 & 0virtue ( subsec;n #bj7#bd71 % 2 deem$ 6h rcvd ! pay;t 9 ! c\rse (a busi;s on a3.t ( s]vices n r5d]$ or gds n deliv]$ 2f ! 5d (! tax,n ye> 9 : ! pay;t 0 rcvd1 7e7 ! pay]1 0virtue ( subsec;n #bj7#bd71 _c claim a res]ve "u p>agraph #bj7#a77m7 9 respect ( ^? gds or s]vices =! tax,n ye> 9 : ! pay;t 0 made or = any subsequ5t tax,n ye>1 & #i ,,it-#aed;,r a#d 7f7 ! recipi5t c claim a res]ve "u p>agraph #bj7#a77m7 9 respect ( ^? gds & s]vices 6! ext5t provid$4 ,res]ve 9 ,respect ( ,am.t ,due ,f ! ,sale ( ,prop]ty ,o!r ,?an ,r1l ,e/ate #aj4 ,subject 6! -;ts 9 #ac 2l1 a res]ve is deducti# "u p>agraph #bj7#a77n7 ": gds >e sold &! t]ms (! sale provide t at l1/ "p (! am.t due is n due = m ?an two ye>s f ! "d on : ! prop]ty 0 sold4 ,2f s* a res]ve is all[a#1 h["e1 ! sale price m/ h be5 9clud$ 9 9come =! ye> 9 : ! sale 0 made1 & "s "p ( t sale price m/ 2 due af ! 5d (! tax,n ye> = : ! res]ve is claim$4 ,x is important 6note t a res]ve is all[a# only 9 respect (! pr(it ele;t 9 ! am.t due4 ,a res]ve = d\bt;l debts may 2 all[$ "u p>agraph #bj7#a77l7 =! debt xf4 #aj ,,it-#aed;,r b#d #aa4 ,! only require;t 9 reg>d 6! all[a# am.t (a res]ve 9 respect (! pr(it ele;t 9 s* an am.t due is t ! res]ve m/ 2 a r1sona# am.t4 ,norm,y1 x is 3sid]$ r1sona# 6assume t ! pr(it ele;t 9 any am.t due is t propor;n ( s* am.t t ! gross pr(it on ! sale be>s 6! gross sell+ price2 ?us a res]ve miagraph #bj7#a77n7 does n apply 6all[ a deduc;n 9 -put+ ! 9come (a taxpay] =a tax,n --------------------------------------#e ye> f a busi;s 9 respect (a prop]ty sold 9 ! c\rse (! busi;s 9 any case ":1 7a7 z provid$ 0subsec;n #bj7#h71 ! taxpay]1 at ! 5d (! ye> or at any "t 9 ! immly foll[+ tax,n ye> 7;i7 0 exempt f tax "u ,"p ;,i (! ,act1 or 7;ii7 0 n resid5t 9 ,canada & did n c>ry on ! busi;s 9 ,canada1 7b7 z provid$ 0subsec;n #bj7#h71 ! sale o3urr$ m ?an #cf mon?s 2f ! 5d (! ye> if ! prop]ty 0 sold af ,novemb] #ab1 #aiha1 or 7c7 z provid$ 0p>agraph #gb7#a77a71 ! taxpay] di$ 9 ! tax,n ye>4 ,! #cf mon? limit describ$ 9 7b7 abv does n apply ) respect 6prop]ty #ab ,,it-#aed;,r a#e sold 2f ,novemb] #ac1 #aiha1 or sold af ,novemb] #ab1 #aiha if ! sale o3urr$ pursuant 6! t]ms 9 exi/;e on t date ( an (f] or agree;t 9 writ+ made or 5t]$ 96on or 2f t date4 ,res]ves ,foll[+ an ,amalgam,n #ad4 ,": two or m corpor,ns h amalgamat$ z describ$ 9 sec;n #hg1 ! new corpor,n w 2 5titl$ 6deduct am.ts "u p>agraph #bj7#a77m71 7m4#a71 7m4#b7 or 7n71 z ! case may be1 6! same ext5t t a pr$ecessor corpor,n wd h be5 s 5titl$ _h ! amalgam,n n o3urr$4 ,? 5title;t is pres]v$ "? ! amalgam,n process 0! deem+ provi.ns ( p>agraphs #hg7#b77i7 & 7j71 :i*"e may 2 applica# 9 ! circum/.es4 ,res]ves ,foll[+ a ,w9d+-,up #ae4 ,": a subsidi>y corpor,n has be5 w.d up 96xs p>5t corpor,n 9 #ac ,,it-#aed;,r b#e circum/.es s* t ! rules 9 subsec;n #hh7#a7 7 applica#1 ! p>5t corpor,n w 2 5titl$1 0virtue ( p>agraph #hh7#a77e4#b71 6deduct am.ts "u p>agraph #bj7#a77m71 7m4#a71 7m4#b7 or 7n71 z ! case may be1 6! same ext5t t ! subsidi>y wd h be5 s 5titl$ _h ! w9d+-up n o3urr$4 ,am.t ( ,res]ve 6be ,9clud$ 9 ,9come #af4 ,pursuant 6p>agraph #ab7#a77e71 any am.t deduct$ z a res]ve "u p>agraph #bj7#a77m7 or 7n7 or subsec;n #bj7#g7 &1 =! #aigi & subsequ5t tax,n ye>s1 p>agraph #bj7#a77m4#a7 is requir$ 6be 9clud$ 9 -put+ a taxpay]'s 9come f a busi;s =! tax,n ye> immly foll[+ ! ye> 9 : any s* deduc;n 0 made4 ,a new corpor,n >is+ \ ( an amalgam,n is1 0virtue ( subp>agraph #hg7#b77g77;i7 & p>agraph #ab7#a77e71 requir$ 69clude 9 9come = xs f/ tax,n ye> any am.t #ad ,,it-#aed;,r c#e t a pr$ecessor corpor,n deduct$ z a res]ve 9 -put+ 9come = xs la/ tax,n ye>4 ,simil>ly1 0virtue ( p>agraph #hh7#a77e4#b7 & subp>agraph #hg7#b77g77;i71 a p>5t corpor,n --------------------------------------#f m/ 9clude 9 9come = xs tax,n ye> dur+ : x rcvd ! assets (a subsidi>y on a w9d+-up any am.t t ! subsidi>y deduct$ z a res]ve 9 -put+ 9come = xs la/ tax,n ye>4 ,repay;t ( ,am.t ,previ\sly ,9clud$ 9 ,9come #ag4 ,": a taxpay] 7a7 has1 "u p>agraph #ab7#a77a71 9clud$ an am.t 9 9come =a "picul> tax,n ye> or a previ\s ye>1 7b7 has repd ! am.t 9 ! "picul> tax,n ye> or "!af1 & 7c7 has made ! repay;t 9 ! #aihb or any subsequ5t tax,n ye>1 #ae ,,it-#aed;,r a#f ! am.t repd may1 0virtue ( p>agraph #bj7#a77m4#b71 2 deduct$ 0! taxpay] 9 -put+ 9come f a busi;s =! ye> 9 : ! repay;t o3urr$4 #af