,CANADA ,CU/OMS                       #A
& ,REV5UE ,AG5CY

              ,9COME ,TAX
          ,9T]PRET,N ,BULLET9
    
,SUBJECT3 ,9COME ,TAX ,ACT
  ,CAPITAL ,CO/ ,ALL[.E--,TRANSF]R$ &
  ,MISCLASSIFI$ ,PROP]TY
,NUMB]3 ,,IT-#AIJ;,R#B
,DATE3 ,DECEMB] #BI1 #AIHI
,REF];E3 ,SUBSEC;NS #AC7#E7 & 7#F7 7AL
  SEC;N #AAJC (! ,REGUL,NS7

               ,APPLIC,N
    
  ,? BULLET9 C.ELS & REPLACES ,9T]PRET,N
,BULLET9 ,,IT-#AIJ;,R DAT$ ,FEBRU>Y #BJ1
#AIHJ4 ,! -;TS "H9 ON SUBSEC;N #AC7#E7
APPLY 6TAX,N YE>S & FISCAL P]IODS -M5C+
AF ,JUNE #AG1 #AIHG T 5D AF #AIHG4 ,": X
IS NEC 6APPLY SUBSEC;N #AC7#E7 =A PRIOR
YE> OR P]IOD1 PL1SE REF] 6! LAW XF4
,CURR5T REVI.NS >E DESIGNAT$ 0V]TICAL
L9ES4                                 #A
                ,SUMM>Y              A#A
    
  ,? BULLET9 D1LS )! RULES = -PUT+ !
UNDEPRECIAT$ CAPITAL CO/ ( PROP]TY (A
PRESCRIB$ CLASS T HAS BE5 TRANSF]R$ F "O
CLASS 6ANO!R CLASS4 ,X AL D1LS )!
DIREC;N ! ,M9I/] MAY MAKE ": PROP]TY HAS
N BE5 PROP]LY CLASSIFI$ 0A TAXPAY]4

          ,4CUS.N & ,9T]PRET,N
    
#A4 ,SUBSEC;N #AC7#E7 3TA9S ! RULES =
  -PUT+ ! UNDEPRECIAT$ CAPITAL CO/ (
  PROP]TY (A PRESCRIB$ CLASS T HAS BE5
  TRANSF]R$ F "O CLASS 6ANO!R4 ,G5],Y1 !
  RULES 9 #AC7#E7 APPLY ":3
  7A7 A TRANSF] 2T TWO CLASSES IS NEC 2C
    ( AN AM5D;T 6! ,ACT OR ,REGUL,NS1
  7B7 MISCLASSIFI$ PROP]TY IS TRANSF]R$
    6XS PROP] CLASS PURSUANT 6SUBSEC;N
    #AC7#F7 7SEE #F 6#H 2L71
  7C7 A TAXPAY] MAKES AN ELEC;N "U SEC;N
    #AAJC (! ,REGUL,NS 69CLUDE ALL
    DEPRECIA# PROP]TY 9 A "PICUL> CLASS
                                      #B
             ,,IT-#AIJ;,R#B          B#A
    OR 6TRANSF] C]TA9 DEPRECIA# PROP]TY
    2T CLASSES1 OR
  7D7 PROP]TY T HAS BE5 PROP]LY 9CLUD$ 9
    A CLASS IS SUBSEQU5TLY TRANSF]R$
    6ANO!R CLASS 2C (A *ANGE ( XS USE 9
    ! 9COME E>N+ PROCESS4
  
  ,SEE ! CURR5T V].N ( ,,IT-#DFD =A
  4CUS.N ON SUBSEC;N #AC7#E.A7 ": A
  TAXPAY]1 :O HAS A L1SEHOLD 9T]E/ 9 A
  PROP]TY1 ACQUIRES [N]%IP ( T PROP]TY4
#B4 ,P>AGRAPH #AC7#E77A7 DEEMS !
  TRANSF]R$ PROP]TY 6BE DEPRECIA#
  PROP]TY (! CLASS 6: ! PROP]TY IS
  TRANSF]R$ 7"H9AF REF]R$ 6Z ! 8O!R
  CLASS07
--------------------------------------#B
  & N DEPRECIA# PROP]TY (! CLASS 9 : !
  TRANSF]R$ PROP]TY =M]LY 0 9CLUD$
  7"H9AF REF]R$ 6Z ! 8=M] CLASS074 ,?
  PROVIDES =! TRANSF] (! CAPITAL CO/ (!
  PROP]TY 6! O!R CLASS4
#C4 ,"U P>AGRAPH #AC7#E77B7 AN AM.T IS
  DET]M9$ T IS !N EXCLUD$ 9 -PUT+ !   #C
             ,,IT-#AIJ;,R#B          A#B
  TOTAL DEPRECI,N ALL[$ 6A TAXPAY] =
  PROP]TY (! =M] CLASS & IS 9CLUD$ 9
  -PUT+ ! TOTAL DEPRECI,N ALL[$ 6!
  TAXPAY] = PROP]TY (! O!R CLASS4 ,!
  AM.T CALCULAT$ IS USU,Y ! TOTAL ( ALL
  CAPITAL CO/ ALL[.E CLAIM$ 0! TAXPAY]
  ON ! TRANSF]R$ PROP]TY 2F ! YE> (
  TRANSF] 7SEE #D 2L74 ,H["E1 9 ORD]
  6PREV5T A RECAPTURE F O3URR+ 9 ! =M]
  CLASS1 ": ! EXCESS (! ORIG9AL CAPITAL
  CO/ (! TRANSF]R$ PROP]TY OV] !
  UNDEPRECIAT$ CAPITAL CO/ (! =M] CLASS
  IMMLY 2F ! TRANSF] IS GRT] ?AN ! AM.T
  CALCULAT$ 9 ! PREVI\S S5T;E1 !N ?
  EXCESS IS US$ 9/1D4
#D4 ,9 ! CALCUL,N (! DEPRECI,N PREVI\SLY
  CLAIM$ ON ! TRANSF]R$ PROP]TY1 ! RATE
  6BE US$1 PURSUANT 6#AC7#E77B77II71 IS
  ! E6ECTIVE RATE DEDUCT$ 9 RESPECT (!
  =M] CLASS 9 A "PICUL> YE>4 ,":1 =
  EXAMPLE1 9 "O TAX,N YE> A TAXPAY]
  CLAIM$ & 0 ALL[$1 ON A CLASS HAV+ A
  #BJ P] C5T MAXIMUM RATE1 ONLY 4#ABE ON
  AN UNDEPRECIAT$ CAPITAL CO/ (       #D
             ,,IT-#AIJ;,R#B          B#B
  4#A1JJJ1 ! E6ECTIVE RATE DEDUCT$ 0
  #AB.E P] C5T4 ,X IS ? RATE ( #AB.E P]
  C5T T IS US$ 9 DET]M9+ ! AM.T (
  DEPRECI,N ALL[$ 9 T YE> ON PROP]TY
  LAT] TRANSF]R$ 6ANO!R CLASS4
#E4 ,! RULES 9 SUBSEC;N #AC7#E7 3C]N+
  TRANSF]S ( PROP]TY APPLY ONLY 6!
  PROP]TY T IS 9 ! TAXPAY]'S POSSES.N ON
  ! DATE Z ( : ! TRANSF] IS 6BE MADE4 ,=
  EXAMPLE1 SUBSEC;N #AC7#E7 WD N APPLY
  6A PROP]TY 9 CLASS #H 4POS$ ( 9 A
  TAX,N YE> PRIOR 6! TAX,N YE> 9 RESPECT
  ( : ! ,M9I/] HAS MADE A DIREC;N "U
  SUBSEC;N #AC7#F7 7SEE #F 2L7 3C]N+ !
  PROP]TY4 ,ACLY1 PROCE$S F 4POSI;N (
  PROP]TY T 0 9 AN 9CORRECT CLASS AT !
  "T X 0 4POS$ (1 REMA9 Z A CR$IT 6T
  CLASS4
#F4 ,": A TAXPAY] HAS MISCLASSIFI$
  DEPRECIA# PROP]TY OR %D H RECLASSIFI$
  X PURSUANT 6A *ANGE 9 ! ,ACT OR !
  ,REGUL,NS OR 2C (A *ANGE 9 XS USE 9 !
  9COME E>N+ PROCESS1 & HAS CLAIM$ & BE5
  ALL[$ CAPITAL CO/ ALL[.E 9 !        #E
             ,,IT-#AIJ;,R#B          C#B
  9CORRECT CLASS1 ! ,DE"P;T MAY REASSESS
  ! YE>S 9VOLV$ 6CORRECT !
  MISCLASSIFIC,N &! CAPITAL CO/ ALL[.E 9
  ! 9CORRECT CLASS4 ,H["E1 IF S* A
  CORREC;N HAS N BE5 MADE1 ! ,M9I/] MAY
  MAKE A DIREC;N 9 RESPECT (A TAX,N YE>
  "U SUBSEC;N #AC7#F7 6DEEM ! PROP]TY
  6BE (! 9CORRECT CLASS =! YE>S PRIOR 6!
  YE> = : DIREC;N IS MADE & 6BE
  TRANSF]R$ 6! CORRECT CLASS 2G9N+ 9 !
  YE> = : ! DIREC;N IS MADE4 ,ONLY
  PROP]TY T 0 / ON H& AT ! 2G9N+ (! YE>
  9 RESPECT ( : A DIREC;N IS MADE IS
  TRANSF]R$4
--------------------------------------#C
#G4 ,IF A TAXPAY] REQUE/S T A CORREC;N 2
  MADE 2G9N+ )! F/ YE> 9 : !
  MISCLASSIFI$ PROP]TY 0 ACQUIR$ OR
  2CAME MISCLASSIFI$ & SUBSEC;N #AEB7#D7
  DOES N PREV5T REASSESS;T ( ANY YE>S
  9VOLV$1 REASSESS;TS W ORD9>ILY 2 MADE
  6CORRECT ! CAPITAL CO/ ALL[.ES CLAIM$
  9 ^? YE>S & NO DIREC;N W 2 REQUIR$ "U
  SUBSEC;N #AC7#F74 ,AL1 SEE !        #F
             ,,IT-#AIJ;,R#B          A#C
  CURR5T V].N ( ,9=M,N ,CIRCUL> #HD-A ":
  A TAXPAY] ACQUIR$ A PROP]TY ( "O CLASS
  : AF 8C]TIFIC,N0 QUALIFIES = 9CLU.N 9
  ANO!R CLASS4
#H4 ,! ,DIRECTOR-,TAX,N 9 A ,4TRICT
  ,TAX,N ,(FICE MAY EX]CISE ! P[] (!
  ,M9I/] "U SUBSEC;N #AC7#F7 PURSUANT
  6SUBSEC;N #IJJ7#B7 (! ,9COME ,TAX
  ,REGUL,NS4














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