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

              ,9COME ,TAX
          ,9T]PRET,N ,BULLET9
    
,SUBJECT3 ,,9COME ,,TAX ,,ACT
  ,ELIGI# ,CAPITAL ,PROP]TY--,RULES ,":
  A ,TAXPAY] ,HAS ,C1S$ ,C>RY+ ON A
  ,BUSI;S OR ,HAS ,DI$
,NUMB]3 ,,IT-#CAC;,R#B
,DATE3 ,APRIL #BA1 #AIIE
,REF];E3 ,SEC;N #BD & SUBSEC;N #GJ7#E.A7
  7AL SEC;N #AD & #BE1 SUBSEC;NS
  #GJ7#C.A71 #BDH7#H71 #BDH7#I71
  #BDH7#BC.A71 #BEB7#D7 & #BEF7#E.A7 &
  P>AGRAPH #BJ7#A77B77 (! ,9COME ,TAX
  ,ACT & SEC;N #BA (! ,9COME ,TAX
  ,APPLIC,N ,RULES1 #AIGA 7,,ITAR77





                                      #A
               ,APPLIC,N             A#A
    
  ,? BULLET9 C.ELS & REPLACES ,9T]PRET,N
,BULLET9 ,,IT-#CAC;,R1 ,ELIGI# ,CAPITAL
,PROP]TY--,C1S+ 6,C>RY ON ,BUSI;S1 DAT$
,OCTOB] #AJ1 #AIGH1 &! ,SPECIAL ,REL1SE
6T BULLET9 DAT$ ,MAY #BE1 #AIHD1 Z WELL
Z ,,IT-#CDD;,R1 ,ELIGI# ,CAPITAL
,PROP]TY--,DEC1S$ ,P]SONS1 DAT$ ,MAY #H1
#AIHG4

                ,SUMM>Y
    
  ,ELIGI# CAPITAL PROP]TY (A BUSI;S IS
9TANGI# CAPITAL PROP]TY1 S* Z GDWILL &
O!R 8NO?+S01 ! CO/ ( : NEI QUALIFIES =
CAPITAL CO/ ALL[.E NOR IS FULLY DEDUCTI#
Z A CURR5T EXP5SE 9 ! YE> ( XS
ACQUISI;N4 ,? BULLET9 EXPLA9S ! RULES =
ELIGI# CAPITAL PROP]TY T APPLY IF A
TAXPAY] HAS C1S$ C>RY+ ON A BUSI;S OR
HAS DI$4 ,G5],Y1 :5 A TAXPAY] HAS C1S$
C>RY+ ON A BUSI;S & HAS 4POS$ ( ALL XS
ELIGI# CAPITAL PROP]TY ( ANY VALUE1 A
F9AL POSITIVE BAL.E 9 ! ELIGI#        #B
             ,,IT-#CAC;,R#B          B#A
CAPITAL PROP]TY POOL IS DEDUCT$ 0!
TAXPAY] Z A T]M9AL ALL[.E4 ,A F9AL
NEGATIVE BAL.E1 ON ! O!R H&1 RESULTS 9
AN AM.T 2+ 9CLUD$ 9 9COME4
  ,Z AN EXCEP;N 6! ABV RULE1 AN
9DIVIDUAL G5],Y _C CLAIM A T]M9AL ALL[.E
IF ! BUSI;S IS SUBSEQU5TLY C>RI$ ON 0!
9DIVIDUAL'S SP\SE OR 3TROLL$ CORPOR,N4
,9/1D1 ! F9AL POSITIVE BAL.E 9 ! POOL1 Z
WELL Z ! MAKE-UP (! POOL = PURPOSES (
CALCULAT+ 9COME 9CLU.NS1 IS 8ROLL$ OV]0
F ! 9DIVIDUAL 6! SP\SE OR 3TROLL$
CORPOR,N4
  ,G5],Y1 ": AN ELIGI# CAPITAL PROP]TY
IS TRANSF]R$ 6A B5EFICI>Y Z A RESULT (A
TAXPAY]'S D1? &! RULES =A ROLLOV] 6!
TAXPAY]'S SP\SE OR 3TROLL$ CORPOR,N D N
APPLY1 ! TAXPAY] IS DEEM$ 6H 4POS$ (!
PROP]TY = PROCE$S T >E BAS$ ON !
PROP]TY'S PROPOR;NATE %>E (! POOL BAL.E4
,IF ! B5EFICI>Y DOES N 3T9UE C>RY+ ON !
DEC1S$ TAXPAY]'S BUSI;S1 ! B5EFICI>Y IS
DEEM$ 6H ACQUIR$ ! PROP]TY Z A CAPITAL
PROP]TY = AN AM.T EQUAL 6! DEC1S$     #C
             ,,IT-#CAC;,R#B          C#A
TAXPAY]'S DEEM$ PROCE$S4 ,IF1 ON ! O!R
H&1 ! B5EFICI>Y 3T9UES C>RY+ ON ! DEC1S$
TAXPAY]'S BUSI;S1 ! PROP]TY'S
PROPOR;NATE %>E (! POOL BAL.E & MAKE-UP
(! POOL 7= PURPOSES ( CALCULAT+ 9COME
9CLU.NS7 IS ROLL$ OV] F ! DEC1S$ TAXPAY]
6! B5EFICI>Y4
  ,? BULLET9 AL 4CUSSES A RULE T C APPLY
:5 A SU3ESSOR HAS ACQUIR$ A GOV]N;T "R
7: IS A TYPE ( ELIGI# CAPITAL PROP]TY7 F
A P]SON ) :OM ! SU3ESSOR 0 N D1L+ AT
>M'S L5G?4

          ,4CUS.N & ,9T]PRET,N
    ,AN ,OV]VIEW (! ,ELIGI# ,CAPITAL
      ,PROP]TY ,RULES = AN ,ONGO+
                ,BUSI;S
    
#A4 ,! FOLL[+ IS A SUMM>Y (! CURR5T
  RULES 7! 8NEW SY/EM0 ( RULES1 : 2GAN 9
  #AIHH7 P]TA9+ 6! ELIGI# CAPITAL
  PROP]TY 78,,EC PROP]TY07 ( AN ONGO+
  BUSI;S4 ,! CUMULATIVE ELIGI# CAPITAL
  78CUMULATIVE ,,EC07 =A BUSI;S IS1   #D
             ,,IT-#CAC;,R#B          D#A
  9 E6ECT1 AN EXP5DITURE POOL 7! 8POOL07
  RELAT+ 6! ,,EC PROP]TY = T BUSI;S4 ,!
  POOL IS 9CR1S$ 0?REE-QU>T]S 7! 89CLU.N
  RATE07 ( EA* ELIGI# CAPITAL EXP5DITURE
  78,,EC EXP5DITURE07 MADE 6ACQUIRE ,,EC
  PROP]TY4 ,! POOL IS DECR1S$ 0EA*
  ELIGI# CAPITAL AM.T 78,,EC AM.T071 :
  IS ESS5TI,Y EQUAL 6?REE-QU>T]S (! NET
  PROCE$S F ! 4POSI;N ( AN ,,EC PROP]TY4
  ,A DEDUC;N IS ALL[$ "U P>AGRAPH
  #BJ7#A77B7 ( UP 6#G@3P ( ANY POSITIVE
  BAL.E 9 ! POOL Z (! 5D (A TAX,N YE>1
  &! POOL IS !N DECR1S$ 0! AM.T S
  DEDUCT$4 ,TE*NIC,Y1 ! POOL BAL.E _C 2
  A NEGATIVE AM.T4 ,H["E1 SUBSEC;N
  #AD7#A7 PROVIDES = C]TA9 TAX 3SEQU;ES
  :51 Z (! 5D (A TAX,N YE>1 ! AM.TS T H
  DECR1S$ ! POOL >E GRT] ?AN ! AM.TS T H
  9CR1S$ ! POOL4 ,! REF];ES 9 ? BULLET9
  6A 8NEGATIVE BAL.E0 M1N ? NO;NAL
  NEGATIVE BAL.E1 I4E41 ! EXCESS (!
  DECR1SES OV] ! 9CR1SES4 ,G5],Y1 A
  NEGATIVE BAL.E Z (! 5D (A TAX,N YE>
  RESULTS 9 AN AM.T 2+ 9CLUD$ 9       #E
             ,,IT-#CAC;,R#B          E#A
  9COME 7: W 2 REF]R$ 6IN ! REMA9D] ( ?
  BULLET9 Z A 8SUBSEC;N #AD7#A7 9COME
  9CLU.N071 &! POOL BAL.E IS !N 9CR1S$
  6NIL S T ! SAME AM.T _C 2 9CLUD$ 9
  9COME A SECOND "T4 ,! ,,EC PROP]TY
  RULES = AN ONGO+ BUSI;S >E 4CUSS$ 9 M
  DETAIL 9 ! CURR5T V].N ( ,9T]PRET,N
  ,BULLET9 ,,IT-#ABC1 ,TRANSAC;NS
  ,9VOLV+ ,ELIGI# ,CAPITAL ,PROP]TY4 ,=
  PURPOSES ( 4CUS.N 9 ! REMA9D] ( ?
  BULLET91 X IS ASSUM$ T ! TAXPAY] HAS
  ONLY "O BUSI;S4
--------------------------------------#B
     ,RULES T ,APPLY ,IF A ,TAXPAY]
    ,HAS ,C1S$ ,C>RY+ ON A ,BUSI;S &
     ,HAS ,4POS$ ( ,ALL ,XS ,ELIGI#
    ,CAPITAL ,PROP]TY ( ,ANY ,VALUE
    
#B4 ,! RULES 9 SUBSEC;N #BD7#A7 APPLY IF
  ! FOLL[+ TWO REQUIRE;TS >E MET3
  --,A TAXPAY] HAS C1S$ C>RY+ ON A
    BUSI;S4
  
                                      #F
             ,,IT-#CAC;,R#B          A#B
  --,! TAXPAY] NO L;G] [NS ANY PROP]TY (
    ANY VALUE T 0 ,,EC PROP]TY (!
    BUSI;S4
  ,! FACTS (! "PICUL> CASE DET]M9E :E!R
  OR N ! TAXPAY] HAS C1S$ C>RY+ ON A
  BUSI;S4 ,? G5],Y O3URS :5 ! TAXPAY]
  HAS C1S$ ! NORMAL ACTIVITIES (! BUSI;S
  ) LL LIKELIHOOD ( />T+ !M UP AG 9 !
  NE> FUTURE4
#C4 ,"U P>AGRAPH #BD7#A77A71 ! TAXPAY]
  DEDUCTS1 9 CALCULAT+ 9COME1 ANY F9AL
  POSITIVE BAL.E T ! POOL HAS AT ! "T :5
  ! ABV TWO REQUIRE;TS >E F/ MET4 ,:5
  CALCULAT+ ! F9AL POOL BAL.E = ?
  PURPOSE1 NOTE T ! POOL M/ H BE5 REDUC$
  0ALL ,,EC AM.TS O3URR+ UP 6T "T F ,,EC
  PROP]TY 4POSI;NS4 ,! DEDUC;N "U
  P>AGRAPH #BD7#A77A7 (A F9AL POSITIVE
  BAL.E 9 ! POOL IS "S"TS REF]R$ 6Z A
  8T]M9AL ALL[.E04
#D4 ,A T]M9AL ALL[.E M/ 2 DEDUCT$ 9
  -PUT+ ! TAXPAY]'S 9COME =! F/ TAX,N
  YE> T 5DS AF ! "T :5 ! TWO SUBSEC;N
  #BD7#A7 REQUIRE;TS 7 F/ MET4 ,IF    #G
             ,,IT-#CAC;,R#B          B#B
  ! TAXPAY] IS AN 9DIVIDUAL1 ! 8F/ TAX,N
  YE>0 IS ! CAL5D> YE> 9 : ! REQUIRE;TS
  7 F/ MET1 UN.S ! 9DIVIDUAL FILES AN
  ELEC;N "U SUBSEC;N #BE7#A7 7SEE #G1 &
  AL #I1 2L74 ,IF ! TAXPAY] IS A
  CORPOR,N1 ! 8F/ TAX,N YE>0 IS !
  CORPOR,N'S FISCAL P]IOD 9 : !
  REQUIRE;TS 7 F/ MET4
#E4 ,"U ! RULE 9 P>AGRAPH #BD7#A77B71 NO
  P>AGRAPH #BJ7#A77B7 DEDUC;N MAY 2
  CLAIM$ =! BUSI;S 9 -PUT+ ! TAXPAY]'S
  9COME = ANY TAX,N YE> T 5DS AF ! "T :5
  ! TWO SUBSEC;N #BD7#A7 REQUIRE;TS 7 F/
  MET4 ,"U ! RULE 9 P>AGRAPH #BD7#A77C71
  ! AM.T (! T]M9AL ALL[.E DEDUCT$ "U
  P>AGRAPH #BD7#A77A7 IS SUBTRACT$ F !
  POOL BAL.E1 ?US REDUC+ T BAL.E 6NIL S
  T ! TAXPAY] _C SUBSEQU5TLY CLAIM ALL
  OR ANY POR;N ( T T]M9AL ALL[.E AM.T A
  SECOND "T4
#F4 ,IF ! POOL HAS A NEGATIVE BAL.E AT !
  "T :5 ! TWO SUBSEC;N #BD7#A7
  REQUIRE;TS >E F/ MET 7AG KEEP+ 9 M9D T
  ! POOL M/ H BE5 REDUC$ 0ALL         #H
             ,,IT-#CAC;,R#B          C#B
  APPLICA# ,,EC AM.TS RESULT+ F ,,EC
  PROP]TY 4POSI;NS71 A SUBSEC;N #AD7#A7
  9COME 9CLU.N O3URS4 ,= CORPOR,NS1 !
  SUBSEC;N #AD7#A7 9COME 9CLU.N O3URS 9
  ! FISCAL P]IOD 9 : ! TWO SUBSEC;N
  #BD7#A7 REQUIRE;TS >E F/ MET4 ,=
  9DIVIDUALS1 ! SUBSEC;N #AD7#A7 9COME
  9CLU.N O3URS1 0VIRTUE ( P>AGRAPH
  #BD7#A77D71 9 ! CAL5D> YE> 9 : ! TWO
  SUBSEC;N #BD7#A7 REQUIRE;TS >E F/ MET1
  UN.S ! 9DIVIDUAL FILES AN ELEC;N "U
  SUBSEC;N #BE7#A7 7SEE #G 6#I 2L74
#G4 ,! SUBSEC;N #BE7#A7 ELEC;N IS
  AVAILA# 6AN 9DIVIDUAL :O 0 !
  PROPRIETOR (A BUSI;S & :O HAS 4POS$ (
  X DUR+ A FISCAL P]IOD (! BUSI;S4 ,"U !
  ELEC;N1 ! FISCAL P]IOD (! BUSI;S IS
  DEEM$ 6H 5D$ AT ! "T X WD H 5D$ _H !
  TAXPAY] N 4POS$ (! BUSI;S DUR+ !
  FISCAL P]IOD4

,EXAMPLE3
  ,! FISCAL P]IOD ( AN 9DIVIDUAL'S
  PROPRIETOR%IP BUSI;S NORM,Y 5DS     #I
             ,,IT-#CAC;,R#B          D#B
  ON ,JUNE #CJ4 ,! 9DIVIDUAL SELLS !
  BUSI;S1 9CLUD+ ALL ! ,,EC PROP]TY1 ON
  ,NOVEMB] #CJ1 #AIID4 ,AF REDUC+ ! POOL
  BAL.E 0ALL ! ,,EC AM.TS RESULT+ F !
  ,,EC PROP]TY 4POSI;NS1 ! 9DIVIDUAL /
  HAS A POSITIVE BAL.E 9 ! POOL4 ,!
  RESULT+ T]M9AL ALL[.E WD NORM,Y 2
  DEDUCT$ 9 -PUT+ ! 9DIVIDUAL'S 9COME =
  #AIID4 ,H["E1 ! 9DIVIDUAL MAKES AN
  ELEC;N "U SUBSEC;N #BE7#A74 ,"U !
  ELEC;N1 ! F9AL FISCAL P]IOD (! BUSI;S
  IS DEEM$ 65D ON ,JUNE #CJ1 #AIIE 7!
  DATE X WD NORM,Y 5D IF ! 9DIVIDUAL _H
  N 4POS$ (! BUSI;S 2F T DATE74 ,Z A
  RESULT1 ! 9DIVIDUAL DEDUCTS ! T]M9AL
  ALL[.E 9 -PUT+ 9COME = #AIIE4

#H4 ,! SUBSEC;N #BE7#A7 ELEC;N C 2 US$ 9
  ! SAME WAY 6DEF] A SUBSEC;N #AD7#A7
  9COME 9CLU.N 2C P>AGRAPH #BE7#C77B7
  OV]RULES ! APPLIC,N1 M5;N$ 9 #F ABV1 (
  P>AGRAPH #BD7#A77D74
#I4 ,SUBSEC;N #BE7#B7 PROVIDES T A
  SUBSEC;N #BE7#A7 ELEC;N IS N       #AJ
             ,,IT-#CAC;,R#B          E#B
  VALID UN.S ! TAXPAY] IS A RESID5T (
  ,CANADA AT ! "T :5 ! FISCAL P]IOD (!
  BUSI;S WD 2 DEEM$ 6H 5D$ IF ! ELEC;N 7
  VALID4 ,?US1 9 ! ABV EXAMPLE1 !
  TAXPAY] WD H 6BE A RESID5T ( ,CANADA
  ON ,JUNE #CJ1 #AIIE =! ELEC;N 6BE
  VALID4
#AJ4 ,NOTE3 ,! -;TS ABV REG>D+ A FISCAL
  P]IOD T DOES N 5D ON ,DECEMB] #CA %D 2
  R1D 9 LI<T (A PROPOS$ TAX M1SURE T 0
  ANN\NC$ 9 ! ,F$]AL ,BUDGET ( ,FEBRU>Y
  #BG1 #AIIE4 ,T M1SURE1 IF 5ACT$1 WD
  G5],Y PROVIDE T A FISCAL P]IOD 2G9N+
  AF #AIID (A BUSI;S C>RI$ ON 9 ,CANADA
  0A SOLE PROPRIETOR%IP1 A PROFES.NAL
  CORPOR,N OR A "PN]%IP 7": AT L1/ "O
  "PN] IS AN 9DIVIDUAL1 A PROFES.NAL
  CORPOR,N OR ANO!R A6ECT$ "PN]%IP7 WD 2
  DEEM$ 65D AT ! E>LI] (! "T X WD
  O!RWISE 5D & ,DECEMB] #CA4 ,GIV5 T MO/
  TAXPAY]S A6ECT$ WD O!RWISE 2 REQUIR$
  6REPORT M ?AN #AB MON?S ( BUSI;S 9COME
  ON _! #AIIE TAX RETURNS1 C]TA9
  TRANSI;NAL M1SURES WD 2 AVAILA#4   #AA
             ,,IT-#CAC;,R#B          F#B
#AA4 ,! SUBSEC;N #BD7#A7 RULES 4CUSS$
  ABV >E MODIFI$ 0SUBSEC;N #BD7#B7 :5 "!
  IS AN ,,EC PROP]TY POOL 8ROLLOV]0 F AN
  9DIVIDUAL 6HIS OR H] SP\SE OR
  CORPOR,N4 ,! SUBSEC;N #BD7#B7 ROLLOV]
  RULES APPLY IF ! FOLL[+ TWO REQUIRE;TS
  >E MET3
  --,! 9DIVIDUAL HAS C1S$ C>RY+ ON !
    BUSI;S4
  --,SUBSEQU5TLY1 EI ! 9DIVIDUAL'S SP\SE
    OR A CORPOR,N 3TROLL$ DIRECTLY OR
    9DIRECTLY 9 ANY MANN] :AT"E 0!
    9DIVIDUAL C>RIES ON ! BUSI;S &
    ACQUIRES ALL ! PROP]TY T _H ANY
    VALUE :5 ! 9DIVIDUAL C1S$ C>RY+ ON !
    BUSI;S & T 0 ,,EC PROP]TY (!
    9DIVIDUAL'S BUSI;S4
--------------------------------------#C
#AB4 ,-MON-LAW C\PLES T -E )9 ! 8EXT5D$
  M1N+ ( SP\SE0 RULES 9 SUBSEC;N
  #BEB7#D7 >E TR1T$ Z SP\SES = PURPOSES
  (! RULES 9 SUBSEC;N #BD7#B74
#AC4 ,A CORPOR,N C 2 83TROLL$ DIRECTLY
  OR 9DIRECTLY 9 ANY MANN] :AT"E0    #AB
             ,,IT-#CAC;,R#B          A#C
  0M1NS ( DE JURE 3TROL OR DE FACTO
  3TROL4 ,) REG>D 6! LATT]1 ! "Q ( :E!R
  A CORPOR,N IS 83TROLL$ DIRECTLY OR
  9DIRECTLY 9 ANY MANN] :AT"E0 IS
  SUBJECT 6! 83TROL 9 FACT0 PROVI.N 9
  SUBSEC;N #BEF7#E.A74 ,! CURR5T V].N (
  ,9T]PRET,N ,BULLET9 ,,IT-#FD1
  ,CORPOR,NS3 ,ASSOCI,N & ,3TROL--,AF
  #AIHH1 3TA9S M 9=M,N ON ? TOPIC4
#AD4 ,": ! ABV REQUIRE;TS =! OP],N (
  SUBSEC;N #BD7#B7 >E MET1 P>AGRAPH
  #BD7#B77A7 PREV5TS ! 9DIVIDUAL :O HAS
  C1S$ C>RY+ ON ! BUSI;S F CLAIM+ A
  T]M9AL ALL[.E4 ,N"E!.S1 P>AGRAPH
  #BD7#B77A7 MODIFIES P>AGRAPH
  #BD7#A77C7 7: IS 4CUSS$ 9 #E ABV7 S T
  X / CAUSES ANY POSITIVE BAL.E 9 ! POOL
  6BE REDUC$ 6NIL Z F> Z ! 9DIVIDUAL IS
  3C]N$4 ,! -B9$ E6ECT ( P>AGRAPHS
  #BD7#B77B7 TO 7D7 IS T ! TRANSF]EE
  7I4E41 ! 9DIVIDUAL'S SP\SE OR !
  CORPOR,N 3TROLL$ 0! 9DIVIDUAL1 Z !
  CASE MAY BE7 />TS \1 ) RESPECT 6!
  BUSI;S1 Z FOLL[S3                  #AC
             ,,IT-#CAC;,R#B          B#C
  --,! TRANSF]EE TAKES OV] ! 9DIVIDUAL'S
    POSITIVE POOL BAL.E1 IF ANY1 Z
    CALCULAT$ IMMLY 2F ! ROLLOV]4 ,?
    M1NS T ! TRANSF]EE C CLAIM A
    P>AGRAPH #BJ7#A77B7 DEDUC;N =!
    TRANSF]EE'S F/ TAX,N YE> =! BUSI;S
    7ASSUM+ T ! POOL BAL.E IS / POSITIVE
    Z (! 5D ( T YE>74
  --,! TRANSF]EE />TS \ 9 E6ECTIVELY !
    SAME POSI;N Z ! 9DIVIDUAL1 REG>D+ !
    MAKE-UP (! POOL A3.T1 = PURPOSES (
    DET]M9+ ANY SUBSEQU5T SUBSEC;N
    #AD7#A7 9COME 9CLU.NS4
#AE4 ,9 A4I;N 6P>AGRAPH #BD7#B77A71
  SUBSEC;N #HE7#D7 IS ANO!R PROVI.N T C
  PREV5T A T]M9AL ALL[.E F 2+ CLAIM$ "U
  SUBSEC;N #BD7#A77A74 ,SUBSEC;N #HE7#D7
  C APPLY IN1 B IS N RE/RICT$ TO1
  SITU,NS 9VOLV+ A SUBSEC;N #HE7#A7
  ELEC;N MADE 9 3NEC;N )A TRANSF] ( ,,EC
  PROP]TY 6A CORPOR,N4 ,= M 9=M,N ON ^!
  PROVI.NS1 SEE ! CURR5T V].N (
  ,9T]PRET,N ,BULLET9 ,,IT-#BIA1
                                     #AD
             ,,IT-#CAC;,R#B          C#C
  ,TRANSF] ( ,PROP]TY 6A ,CORPOR,N "U
  ,SUBSEC;N #HE7#A74
#AF4 ,0VIRTUE ( SUBSEC;N #BD7#C71 IF A
  "PN]%IP HAS BE5 4SOLV$ & NEI SUBSEC;N
  #IH7#C7 NOR SUBSEC;N #IH7#E7 APPLIES1
  EA* =M] MEMB] (! "PN]%IP MAY DEDUCT AN
  AM.T EQUAL 6T =M] MEMB]'S PROPOR;N (!
  P>AGRAPH #BD7#A77A7 T]M9AL ALL[.E T WD
  H BE5 DEDUCTI# 0! "PN]%IP _H X N C1S$
  6EXI/4
#AG4 ,NOTE3 ,9 ,BILL ;,C-#GJ1 PROPOS$
  NEW P>AGRAPH #BJ7#A77HH4#A7 3TA9S A
  RULE = ALL[+ A TAXPAY] :O HAS C1S$
  C>RY+ ON A BUSI;S 6DEDUCT ?REE-QU>T]S
  ( ANY SUBSEQU5T REPAY;T ( ASSI/.E F A
  GOV]N;T1 MUNICIPAL;Y OR O!R PUBLIC
  AU?OR;Y4 ,6QUALIFY1 ! REPAY;T WD H 6BE
  "U A LEGAL OBLIG,N 6D S4 ,! AM.T REPD
  WD AL H 6H PREVI\SLY REDUC$ ! AM.T (
  AN ,,EC EXP5DITURE (! TAXPAY] :ILE / 9
  BUSI;S4 ,IF 5ACT$1 P>AGRAPH
  #BJ7#A77HH4#A7 WD APPLY 6AM.TS REPD AF
  ,FEBRU>Y #BA1 #AIID4 ,AL 9 ,BILL
  ;,C-#GJ1 PROPOS$ NEW SUBSEC;N      #AE
             ,,IT-#CAC;,R#B          D#C
  #GI7#D7 WD DEEM PAY;TS MADE 0! TAXPAY]
  ) RESPECT 6C]TA9 DEBTS 6BE REPAY;TS (
  ASSI/.E 6: P>AGRAPH #BJ7#A77HH4#A7 WD
  APPLY4 ,6QUALIFY = ? PURPOSE1 A DEBT
  WD H 6R1SONABLY 2 3SID]$ 6H BE5 9CLUD$
  9 ! TAXPAY]'S PROCE$S ( 4POSI;N ( ,,EC
  PROP]TY T _H BE5 SURR5D]$ 0! TAXPAY]4
  ,IF 5ACT$1 PROPOS$ NEW SUBSEC;N
  #GI7#D7 WD APPLY ) RESPECT 6PROP]TY
  SURR5D]$ AF ,FEBRU>Y #BA1 #AIID 7UN.S
  PURSUANT 6A C\RT ORD] MADE 2F ,FEBRU>Y
  #BB1 #AIID74

     ,RULES T ,APPLY ,IF A ,TAXPAY]
   ,HAS ,DI$ &A ,B5EFICI>Y ,ACQUIRES
    AN ,ELIGI# ,CAPITAL ,PROP]TY (!
       ,DEC1S$ ,TAXPAY]'S ,BUSI;S
    
#AH4 ,IF A TAXPAY] DIES1 ! RULES 9
  SUBSEC;N #GJ7#E.A7 C APPLY4 ,^! RULES
  >E 9 "S RESPECTS SIMIL> 6^? 9 SUBSEC;N
  #BD7#B7 4CUSS$ ABV4 ,AN IMPORTANT
  DI6];E1 H["E1 IS T :ILE ! RULES 9
  SUBSEC;N #BD7#B7 APPLY 9 3NEC;N    #AF
             ,,IT-#CAC;,R#B          E#C
  )! POOL Z A :OLE1 ^? 9 SUBSEC;N
  #GJ7#E.A7 APPLY 9 3NEC;N )A "PICUL>
  ,,EC PROP]TY4 ,SUBSEC;N #GJ7#E.A7
  APPLIES IF ! FOLL[+ TWO REQUIRE;TS >E
  MET3
  --,A TAXPAY] HAS DI$4
  --,Z A 3SEQU;E (! TAXPAY]'S D1?1 ANO!R
    P]SON 7! 8B5EFICI>Y07 ACQUIRES A
    PROP]TY T 0 AN ,,EC PROP]TY (!
    TAXPAY] =! BUSI;S T 0 C>RI$ ON 0!
    TAXPAY] UNTIL 8 OR H] D1?4
    7,SUBSEC;NS #BDH7#H7 & 7#I71 & AL
    SUBSEC;N #BDH7#BC.A71 PROVIDE C]TA9
    RULES = DET]M9+ :E!R PROP]TY HAS BE5
    ACQUIR$ 0A P]SON Z A 3SEQU;E (! D1?
    (A TAXPAY]47
  ,! SECOND REQUIRE;T IS N MET 7& ?US
  SUBSEC;N #GJ7#E.A7 DOES N APPLY7 "U EI
  (! FOLL[+ CIRCUM/.ES3
  --! B5EFICI>Y'S ACQUISI;N (! PROP]TY
    IS 0WAY (A 4TRIBU;N ( PROP]TY 0A
    TRU/ &! TRU/ HAS CLAIM$ A P>AGRAPH
    #BJ7#A77B7 DEDUC;N =! PROP]TY2 OR
                                     #AG
             ,,IT-#CAC;,R#B          F#C
  --! PROP]TY IS ACQUIR$ 0! TAXPAY]'S
    SP\SE OR 3TROLL$ CORPOR,N & SUBSEC;N
    #BD7#B7 APPLIES 7SEE #AA ABV74
#AI4 ,": ! REQUIRE;TS =! OP],N (
  SUBSEC;N #GJ7#E.A7 >E MET =A "PICUL>
  PROP]TY1 ! TAXPAY] IS DEEM$ 0P>AGRAPH
  #GJ7#E.A77A7 6H 4POS$ (! PROP]TY IMMLY
  2F D1?4 ,! DEEM$ PROCE$S ( 4POSI;N >E
  EQUAL 6F\R-?IRDS (! PROPOR;N ( ANY
  POSITIVE BAL.E 9 ! POOL T ! FAIR M>KET
  VALUE (! PROP]TY IS (! TOTAL FAIR
  M>KET VALUE ( ALL ! ,,EC PROP]TY (!
  TAXPAY] =! BUSI;S4 ,! DEEM$ PROCE$S >E
  !N MULTIPLI$ 0?REE-QU>T]S 7I4E41 !
  89CLU.N RATE07 6DET]M9E ! 8,,EC AM.T0
  =! PROP]TY4
--------------------------------------#D
,EXAMPLE3
  ,S"EAL YE>S AGO1 ,MR4 ;,A />T$ UP A
  BUSI;S1 HAV+ ACQUIR$ ! NEC LIC;E =
  4#HE1JJJ4 ,:5 ! LIC;E 0 GRANT$1 XS
  T]MS PROVID$ T X 0 TRANSF]A# & T X
  SURVIV$ ! LIC5SEE4 ,Z (! "T ( 7IMMLY
  2F7 ,MR4 ;,A'S D1?1                #AH
             ,,IT-#CAC;,R#B          A#D
  --! POOL BAL.E _H BE5 REDUC$ 64#FJ1JJJ
    Z A RESULT ( 8 P>AGRAPH #BJ7#A77B7
    DEDUC;NS = PRIOR YE>S2
  --! LIC;E 0 WOR? 4#AJJ1JJJ2 &
  --,MR4 ;,A'S 5D1V\RS _H RESULT$ 9
    GDWILL 9 ! BUSI;S1 VALU$ AT
    4#EJ1JJJ4
  ,! REQUIRE;TS ( SUBSEC;N #GJ7#E.A7 7
  MET = BO? ! LIC;E &! GDWILL4 ,"U
  P>AGRAPH #GJ7#E.A77A71 ,MR4 ;,A IS
  DEEM$ 6H 4POS$ (! TWO ,,EC PROP]TIES1
  IMMLY 2F 8 D1?1 = PROCE$S Z FOLL[S3

  ,LIC;E3 #D DIVID$ 0#C MULTIPLI$
    04#AJJ1JJJ DIVID$ 04#AEJ1JJJ
    MULTIPLI$ 04#FJ1JJJ EQUALS 4#EC1CCC
  ,GDWILL3 #D DIVID$ 0#C MULTIPLI$
    04#EJ1JJJ DIVID$ 04#AEJ1JJJ
    MULTIPLI$ 04#FJ1JJJ EQUALS 4#BF1FFG
  
  ,MR4 ;,A'S ,,EC AM.TS =! TWO DEEM$
  4POSI;NS >E "!=E3

                                     #AI
             ,,IT-#CAC;,R#B          B#D
  ,LIC;E3 #C DIVID$ 0#D MULTIPLI$
    04#EC1CCC EQUALS 4#DJ1JJJ
  ,GDWILL3 #C DIVID$ 0#D MULTIPLI$
    04#BF1FFG EQUALS 4#BJ1JJJ
  
  ,NOTE T EV5 ?\< NO AM.T 0 "E A4$ 6!
  POOL =! GDWILL 72C ,MR4 ;,A DID N
  PUR*ASE X71 XS VALUE M/ / 2 TAK5
  96A3.T 9 ! ABV CALCUL,NS4 ,? IS 2C !
  GDWILL / MEETS ! DEF9I;N ( AN ,,EC
  PROP]TY 7SEE ! CURR5T V].N (
  ,9T]PRET,N ,BULLET9 ,,IT-#ABC74 ,S9CE
  ! ,,EC AM.TS =! LIC;E & GDWILL -E 6A
  TOTAL ( 4#FJ1JJJ1 !Y REDUCE ,MR4 ;,A'S
  POOL BAL.E 6NIL Z (! "T IMMLY 2F 8
  D1?4 ,Z A RESULT1 "! _C 2 ANY P>AGRAPH
  #BJ7#A77B7 DEDUC;N1 T]M9AL ALL[.E OR
  SUBSEC;N #AD7#A7 9COME 9CLU.N = ,MR4
  ;,A =! YE> ( 8 D1?4

#BJ4 ,IF ! REQUIRE;TS ( SUBSEC;N
  #GJ7#E.A7 >E MET =A "PICUL> PROP]TY &!
  B5EFICI>Y DOES N 3T9UE C>RY+ ON !
  TAXPAY]'S BUSI;S1 P>AGRAPH         #BJ
             ,,IT-#CAC;,R#B          C#D
  #GJ7#E.A77B7 DEEMS ! B5EFICI>Y 6H
  ACQUIR$ ! PROP]TY Z A CAPITAL PROP]TY
  AT ! "T (! TAXPAY]'S D1? AT A CO/
  EQUAL 6! DEC1S$ TAXPAY]'S DEEM$
  PROCE$S ( 4POSI;N Z DET]M9$ 0! RULE
  4CUSS$ ABV4 ,A SUBSEQU5T 4POSI;N (!
  PROP]TY C RESULT 9 A CAPITAL GA9 OR
  CAPITAL LOSS 6! B5EFICI>Y4
#BA4 ,IF1 ON ! O!R H&1 ! B5EFICI>Y
  3T9UES C>RY+ ON ! DEC1S$ TAXPAY]'S
  BUSI;S1 ! -B9$ E6ECT ( P>AGRAPHS
  #GJ7#E.A77C7 & 7D7 >E ESS5TI,Y ! SAME
  Z ! ROLLOV] RESULTS DESCRIB$ 9 #AD ABV
  =A SP\SE OR 3TROLL$ CORPOR,N "U
  P>AGRAPHS #BD7#B77B7 TO 7D71 EXCEPT T
  ! ROLLOV] RESULTS =! B5EFICI>Y "U
  P>AGRAPHS #GJ7#E.A77B7 & 7C7 >E
  CALCULAT$ = EA* "PICUL> PROP]TY R ?AN
  =! POOL Z A :OLE4 ,T IS1 ! B5EFICI>Y
  />TS \1 AT ! "T (! DEC1S$ TAXPAY]'S
  D1?1 ) RESPECT 6! "PICUL> PROP]TY1 Z
  FOLL[S3
  --,! B5EFICI>Y TAKES OV] T PROPOR;N1
    BAS$ ON FAIR M>KET VALUES1 (!    #BA
             ,,IT-#CAC;,R#B          D#D
    DEC1S$ TAXPAY]'S POSITIVE POOL BAL.E
    7IF ANY1 Z CALCULAT$ IMMLY 2F !
    ROLLOV]7 T P]TA9S 6! "PICUL>
    PROP]TY4 ,9 ! EXAMPLE 9 #AI ABV1
    4#DJ1JJJ ( ,MR4 ;,A'S POOL BAL.E =!
    LIC;E1 & 4#BJ1JJJ =! GDWILL1 CD 2
    TAK5 OV] 0A B5EFICI>Y4 ,": A
    B5EFICI>Y TAKES OV] "S OR ALL (A
    DEC1S$ TAXPAY]'S POOL BAL.E "U ?
    RULE1 A P>AGRAPH #BJ7#A77B7 DEDUC;N
    C 2 CLAIM$ =! B5EFICI>Y'S F/ TAX,N
    YE> =! BUSI;S 7ASSUM+ T !
    B5EFICI>Y'S POOL BAL.E IS / POSITIVE
    Z (! 5D ( T YE>74
  --,! B5EFICI>Y />TS \ 9 E6ECTIVELY !
    SAME POSI;N Z ! DEC1S$ TAXPAY]1
    REG>D+ T PROPOR;N 7BAS$ ON FAIR
    M>KET VALUES7 (! MAKE-UP (! POOL
    A3.T T P]TA9S 6! "PICUL> PROP]TY1 =
    PURPOSES ( DET]M9+ ANY SUBSEQU5T
    SUBSEC;N #AD7#A7 9COME 9CLU.NS4
#BB4 ,0VIRTUE ( SUBSEC;N #GJ7#C.A71 !
  RULES 9 SEC;N #GJ ) RESPECT 6! 8"RS OR
                                     #BB
             ,,IT-#CAC;,R#B          E#D
  ?+S0 (A TAXPAY] :O HAS DI$ D N APPLY
  6,,EC PROP]TY4

             ,GOV]N;T ,"RS
    
#BC4 ,SUBSEC;N #BA7#A7 (! ,9COME ,TAX
  ,APPLIC,N ,RULES 7,,ITAR7 APPLIES 9 A
  SITU,N ": A TAXPAY] 4POSES ( OR ALL[S
  ! EXPIRY (A GOV]N;T "R RELAT+ 6A
  BUSI;S C>RI$ ON 3T9U\SLY 0! TAXPAY] F
  ,JANU>Y #A1 #AIGB 6! DATE (! 4POSI;N
  7OR 6! DATE ! "R EXPIRES74 ,0VIRTUE (
  T PROVI.N1 ! TOTAL 3SID],N 6! TAXPAY]
  =! GOV]N;T "R 7: W 5T] 96! CALCUL,N (
  AN ,,EC AM.T7 IS REDUC$ 0! GRT] (!
  FOLL[+ TWO AM.TS3
  --! TAXPAY]'S PRE-#AIGB CO/ ( ACQUIR+
    ! GOV]N;T "R 7OR ( ACQUIR+ !
    TAXPAY]'S ORIG9AL "R 9 RESPECT (!
    GOV]N;T "R71 6! EXT5T T S* CO/ HAS N
    PREVI\SLY BE5 DEDUCT$ 9 CALCULAT+ !
    TAXPAY]'S 9COME2 &
  
                                     #BC
             ,,IT-#CAC;,R#B          F#D
  --! FAIR M>KET VALUE1 Z AT ,DECEMB]
    #CA1 #AIGA1 (! TAXPAY]'S SPECIFI$ "R
    9 RESPECT (! GOV]N;T "R4
  ,": A GOV]N;T "R REF]R$ 6IN SUBSEC;N
  #BA7#A7 (! ,,ITAR IS ACQUIR$ 0ANO!R
  P]SON 7REF]R$ 6IN ? BULLET9 Z !
  8SU3ESSOR07 EI
--------------------------------------#E
  --F A P]SON ) :OM ! SU3ESSOR 0 N D1L+
    AT >M'S L5G?2 OR
  --PURSUANT 6AN AGREE;T )A P]SON ) :OM
    ! SU3ESSOR 0 N D1L+ AT >M'S L5G?1 IF
    "U ! T]MS (! AGREE;T ! NON->M'S L5G?
    P]SON ALL[$ ! "R 6EXPIRE S T !
    SU3ESSOR CD ACQUIRE A SUB/ANTI,Y
    SIMIL> "R F ! AU?OR;Y T _H ISSU$ !
    "R 6! NON->M'S L5G? P]SON2
  SUBSEC;N #BA7#B.A7 (! ,,ITAR C MAKE !
  FAV\RA# RULE 9 SUBSEC;N #BA7#A7
  AVAILA# 6! SU3ESSOR4 ,IF ! SU3ESSOR
  SUBSEQU5TLY 4POSES ( OR ALL[S ! EXPIRY
  (

                                     #BD
             ,,IT-#CAC;,R#B          A#E
  --! GOV]N;T "R ACQUIR$ 9 EI (! TWO
    SITU,NS DESCRIB$ ABV 7! 8"PICUL>
    "R071 OR
  --ANY O!R GOV]N;T "R T 0 ACQUIR$ 0!
    SU3ESSOR 63T9UE1 )\T 9T]RUP;N1 "RS
    SUB/ANTI,Y SIMIL> 6^? T ! SU3ESSOR
    _H "U ! "PICUL> "R1
  SUBSEC;N #BA7#B.A7 TR1TS ! NON->M'S
  L5G? P]SON &! SU3ESSOR Z "O P]SON =
  PURPOSES ( SEC;N #AD (! ,ACT4 ,? M1NS
  T1 IF ! NON->M'S L5G? P]SON C>RI$ ON !
  BUSI;S 7IN RESPECT ( : ! GOV]N;T "R 0
  HELD7 3T9U\SLY F ,JANU>Y #A1 #AIGB 6!
  DATE ! SU3ESSOR ACQUIR$ ! "R OR !
  SUB/ANTI,Y SIMIL> "R1 !N ! SU3ESSOR W
  2 3SID]$ 6H C>RI$ ON ! BUSI;S 7IN
  RESPECT ( : ! SU3ESSOR'S "R 0 HELD7
  3T9U\SLY F ,JANU>Y #A1 #AIGB UNTIL !
  SU3ESSOR 4POSES ( OR ALL[S ! EXPIRY (!
  SU3ESSOR'S "R4 ,! SU3ESSOR CD BE1 =
  EXAMPLE1 ! B5EFICI>Y (A DEC1S$ TAXPAY]
  Z REF]R$ 6IN #BA ABV OR ! SP\SE OR
  3TROLL$ CORPOR,N (A TAXPAY] Z REF]R$
  6IN #AD ABV4 ,=! ,DE"P;T'S         #BE
             ,,IT-#CAC;,R#B          B#E
  9T]PRET,N ( :5 A NON->M'S L5G?
  REL,N%IP EXI/S )A TRU/1 SEE ! CURR5T
  V].N ( ,9T]PRET,N ,BULLET9 ,,IT-#DAI1
  ,M1N+ ( ,>M'S ,L5G?4

  ,IF Y H ANY -;TS REG>D+ ! MATT]S
4CUSS$ 9 ? BULLET91 PL1SE S5D !M TO3
  ,DIRECTOR1 ,TE*NICAL ,PUBLIC,NS
  ,DIVI.N
  ,POLICY & ,LEGISL,N ,BRAN*
  ,REV5UE ,CANADA
  #HGE ,H]ON ,ROAD
  ,OTTAWA ,,ON
  ,K#A;,A #J;,L#H
  








                                     #BF
         ,EXPLAN,N ( ,*ANGES =        #F
          ,9T]PRET,N ,BULLET9
    ,,IT-#CAC;,R#B ,ELIGI# ,CAPITAL
    ,PROP]TY--,RULES ,": A ,TAXPAY]
   ,HAS ,C1S$ ,C>RY+ ON A ,BUSI;S OR
               ,HAS ,DI$
               ,9TRODUC;N
    
  ,! PURPOSE (! ,EXPLAN,N ( ,*ANGES IS
6GIVE ! R1SONS =! REVI.NS 6AN 9T]PRET,N
BULLET94 ,X \TL9ES REVI.NS T WE H MADE Z
A RESULT ( *ANGES 6! LAW1 Z WELL Z
*ANGES REFLECT+ NEW OR REVIS$ DE"P;TAL
9T]PRET,NS4

                ,OV]VIEW
    
  ,9T]PRET,N ,BULLET9 ,,IT-#CAC;,R#B
EXPLA9S ! RULES REG>D+ ! ELIGI# CAPITAL
78,,EC07 PROP]TY (A TAXPAY]'S BUSI;S T C
APPLY IF ! TAXPAY] HAS C1S$ C>RY+ ON !
BUSI;S OR HAS DI$4 ,? NEW BULLET9 -B9ES
& UPDATES TWO =M] BULLET9S3
,,IT-#CAC;,R1 ,ELIGI# ,CAPITAL ,PROP]TY
--,C1S+ 6,C>RY ON ,BUSI;S 79CLUD+    #BG
             ,,IT-#CAC;,R#B          A#F
! ,SPECIAL ,REL1SE 6T BULLET9 DAT$ ,MAY
#BE1 #AIHD7 & ,,IT-#CDD;,R1 ,ELIGI#
,CAPITAL ,PROP]TY--,DEC1S$ ,P]SONS4 ,!
NEW BULLET9 HAS BE5 WRITT5 2C ( AM5D;TS
6! ,9COME ,TAX ,ACT T 7 5ACT$ 0,S4,C4
#AIHH1 C4 #EE 7=M]LY ,BILL ;,C-#ACI71
,S4,C4 #AIIA1 C4 #DI 7=M]LY ,BILL
;,C-#AH71 ,S4,C4 #AIIC1 C4 #BD 7=M]LY
,BILL ;,C-#IB7 & ,S4,C4 #AIID1 C4 #BA
7=M]LY ,BILL ;,C-#BG74 ,X AL 3TA9S A
NOTE REG>D+ PROPOS$ AM5D;TS 6! ,9COME
,TAX ,ACT 9CLUD$ 9 ,BILL ;,C-#GJ &A NOTE
REG>D+ A PROPOS$ TAX M1SURE ANN\NC$ 9 !
,F$]AL ,BUDGET ( ,FEBRU>Y #BG1 #AIIE4 ,!
-;TS 9 ! BULLET9 >E N A6ECT$ 0ANY O!R
DRAFT LEGISL,N REL1S$ 2F ,APRIL #BA1
#AIIE4






                                     #BH
      ,LEGISLATIVE & ,O!R ,*ANGES    B#F
    
  ,! EXPLAN,NS GIV5 2L D N REF] 6!
P>AGRAPH NUMB]S (! TWO =M] BULLET9S 2C !
S5T;ES & P>AGRAPHS ( ^? BULLET9S H BE5
SIGNIFICANTLY RE>RANG$ 9 ,,IT-#CAC;,R#B4
  ,P>AGRAPH #A GIVES AN OV]VIEW (!
CURR5T 78NEW SY/EM07 ,,EC PROP]TY RULES
= AN ONGO+ BUSI;S4 ,! NEW SY/EM ( RULES1
: 2GAN 9 #AIHH1 IS 4CUSS$ 9 GRT] DETAIL
9 ! CURR5T V].N ( ,9T]PRET,N ,BULLET9
,,IT-#ABC4
  ,P>AGRAPHS #B1 #C1 #D1 #E1 #F1 #G & #H
REFLECT A ,BILL ;,C-#AH AM5D;T 6SUBSEC;N
#BD7#A74 ,2F ! AM5D;T1 ! ONLY REQUIRE;T
=! OP],N ( T SUBSEC;N 0 T ! TAXPAY] C1SE
C>RY+ ON ! BUSI;S4 ,! SUBSEC;N !N
PROVID$ RULES = CALCULAT+ ! TAXPAY]'S
9COME =! TAX,N YE> 9 : ! TAXPAY] C1S$
C>RY+ ON ! BUSI;S4 ,! AM5D;T1 : TOOK
E6ECT AF ,JULY #AC1 #AIIJ1 A4$ A SECOND
REQUIRE;T T ! TAXPAY] NO L;G] [N ANY
,,EC PROP]TY ( ANY VALUE 9 RESPECT (!
BUSI;S1 & CAUS$ ! SUBSEC;N #BD7#A7 RULES
6APPLY = PURPOSES ( CALCULAT+ !      #BI
             ,,IT-#CAC;,R#B          C#F
TAXPAY]'S 9COME =! TAX,N YE>S 5D+ AF !
TWO REQUIRE;TS _H BE5 MET4
  ,P>AGRAPH #I PROVIDES 9=M,N ON
SUBSEC;N #BE7#B71 : 3TA9S A RESID5CY
REQUIRE;T = PURPOSES (A SUBSEC;N #BE7#A7
ELEC;N4
  ,P>AGRAPH #AJ PROVIDES A -;T REG>D+ A
TAX M1SURE PROPOS$ 9 ! ,F$]AL ,BUDGET (
,FEBRU>Y #BG1 #AIIE4
  ,P>AGRAPH #AA 7& P>AGRAPH #AD7
REFLECTS A ,BILL ;,C-#AH AM5D;T
6SUBSEC;N #BD7#B7 T TOOK E6ECT AF ,JULY
#AC1 #AIIJ4 ,"U ? AM5D;T1 : MAKES
SUBSEC;N #BD7#B7 3SI/5T ) AM5D$ SUBSEC;N
#BD7#A71 ! SP\SE OR 3TROLL$ CORPOR,N M/
N ONLY 3T9UE C>RY+ ON ! TAXPAY]'S BUSI;S
B M/ AL ACQUIRE ALL ! ,,EC PROP]TY ( ANY
VALUE F ! TAXPAY]'S BUSI;S4
  ,P>AGRAPH #AB REF]S 6SUBSEC;N
#BEB7#D74 ,T PROVI.N1 : EXT5DS ! M1N+ (
8SP\SE0 = PURPOSES (! ,ACT1 0 A4$ 6!
,ACT Z A RESULT ( ,BILL ;,C-#IB1
APPLICA# AF #AIIB4
                                     #CJ
             ,,IT-#CAC;,R#B          D#F
  ,P>AGRAPH #AC PROVIDES 9=M,N = DET]M9+
:E!R A CORPOR,N 0 83TROLL$ DIRECTLY OR
9DIRECTLY 9 ANY MANN] :AT"E0 0A TAXPAY]
7^! ^WS H BE5 9 SUBSEC;N #BD7#B7 S9CE
#AIGB74 ,9 ? 3NEC;N1 P>AGRAPH #AC REF]S
6! 83TROL 9 FACT0 RULE 9 SUBSEC;N
#BEF7#E.A71 : 0 A4$ 6! ,ACT Z A RESULT (
,BILL ;,C-#ACI1 APPLICA# = TAX,N YE>S
-M5C+ AF #AIHH4
  ,P>AGRAPH #AD REFLECTS ,BILL ;,C-#AH &
,BILL ;,C-#IB AM5D;TS 6SUBSEC;N #BD7#B71
ALL APPLICA# AF ,JULY #AC1 #AIIJ1 T ALL[
! ROLLOV] RULES 9 T SUBSEC;N 6"W 9
3JUNC;N )! NEW SY/EM ( ,,EC PROP]TY
RULES 9 SEC;N #AD4
  ,P>AGRAPH #AF REF]S 6! "PN]%IP 4SOLU;N
RULE 9 SUBSEC;N #BD7#C71 : 0 A4$ 6! ,ACT
Z A RESULT ( ,BILL ;,C-#IB1 APPLICA# AF
,JULY #AC1 #AIIJ4
  ,P>AGRAPH #AG 3TA9S A NOTE DESCRIB+
PROPOS$ NEW RULES1 3TA9$ 9 ,BILL
;,C-#GJ1 REG>D+ REPAY;TS 7AF A TAXPAY]
HAS 4CONT9U$ A BUSI;S7 ( GOV]N;T & O!R
ASSI/.E4                             #CA
             ,,IT-#CAC;,R#B          E#F
  ,P>AGRAPH #AH REF]S 6SUBSEC;N
#BDH7#BC.A71 : 0 A4$ 6! ,ACT Z A RESULT
( ,BILL ;,C-#BG4 ,! POR;N ( SUBSEC;N
#BDH7#BC.A7 T 3TA9S ! RULE = DEEM+ T
PROP]TY HAS BE5 4POS$ ( Z A 3SEQU;E (A
TAXPAY]'S D1? IS APPLICA# 6D1?S O3URR+
AF ,DECEMB] #BA1 #AIIB4 ,NUMB] #AH AL
DESCRIBES AN EXCLU.N F ! OP],N (
SUBSEC;N #GJ7#E.A7 T 0 A4$ 6T SUBSEC;N Z
A RESULT ( ,BILL ;,C-#AH1 E6ECTIVE =
B5EFICI>IES' ACQUISI;NS O3URR+ ON OR AF
,JULY #AC1 #AIIJ4
--------------------------------------#G
  ,P>AGRAPH #AI 9DICATES T A MULTIPLE (
F\R-?IRDS IS US$ 9 DET]M9+ ! DEEM$
PROCE$S "U P>AGRAPH #GJ7#E.A77A74 ,!
*ANGE 9 ! MULTIPLE F 8TWO "TS0 TO 8#D/C0
O3URR$ Z A RESULT ( ,BILL ;,C-#ACI & 0
3SEQU5TIAL ON ! *ANGE 9 ! 89CLU.N RATE0
9 ! NEW SY/EM ( ,,EC PROP]TY RULES 9
SEC;N #AD F 8#A/B0 TO 8#C/D04 ,? AM5D;T
6SUBSEC;N #GJ7#E.A7 TOOK E6ECT 9 #AIHH4
  ,P>AGRAPHS #AI 6#BA REFLECT A ,BILL
;,C-#AH AM5D;T 6SUBSEC;N #GJ7#E.A7   #CB
             ,,IT-#CAC;,R#B          A#G
":BY ! CALCUL,NS "U T SUBSEC;N =A
"PICUL> PROP]TY >E N[ BAS$ ON !
PROP]TY'S PROPOR;NATE %>E (! POOL BAL.E4
,? AM5D;T 0 MADE RETROACTIVE 6TAKE E6ECT
9 #AIHH4
  ,P>AGRAPH #BA REFLECTS ,BILL ;,C-#AH &
,BILL ;,C-#IB AM5D;TS 6SUBSEC;N
#GJ7#E.A7 T ALL[ ! ROLLOV] RULES 9 T
SUBSEC;N 6"W 9 3JUNC;N )! NEW SY/EM (
,,EC PROP]TY RULES 9 SEC;N #AD4 ,^!
AM5D;TS 7 MADE RETROACTIVE 6TAKE E6ECT 9
#AIHH4
  ,P>AGRAPH #BC1 : 4CUSSES ! RULES 9
SEC;N #BA (! ,9COME ,TAX ,APPLIC,N
,RULES 7,,ITAR7 = PRE-#AIGB GOV]N;T "RS1
    --EXPLA9S ^? RULES 9 GRT] DETAIL ?AN
      0 D"O 9 ,9T]PRET,N ,BULLET9
      ,,IT-#CDD;,R2
    --REFLECTS A ,BILL ;,C-#ACI AM5D;T
      6SEC;N #BA (! ,,ITAR : ADAPTS XS
      RULES 6! NEW SY/EM ( ,,EC PROP]TY
      RULES 9 SEC;N #AD 7? AM5D;T TOOK
      E6ECT = 4POSI;NS ( PROP]TY O3URR+
                                     #CC
             ,,IT-#CAC;,R#B          B#G
      AF ,JUNE #AG1 #AIHG1 SUBJECT 6A
      GR&"F+ RULE72 &
    --RELATES ! RULES 9 SEC;N #BA (!
      ,,ITAR 6! ROLLOV] RULES 9 SUBSEC;N
      #BD7#B7 7IN A4I;N 6! ROLLOV] RULES
      9 SUBSEC;N #GJ7#E.A7 Z 0 D"O 9
      ,,IT-#CDD;,R74
















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