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

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,NUMB]3 ,,IT-#CGI;,R
,SUBJECT3 ,9COME ,TAX ,ACT
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  ,ALLOC,NS 6,B5EFICI>IES
,DATE3 ,SEPTEMB] #BI1 #AIII
,REF];E3 ,SEC;N #ADD 7AL SEC;N #ABA2
  SUBSEC;NS #B7#C71 #HC7#A71 #ABF7#A71
  #ADH7#A71 #ADH7#I71 #AEC7#A72 !
  DEF9I;N ( 8P]SON0 9 SUBSEC;N #BDH7#A72
  P>AGRAPHS #F7#A77D71 #H7#A77O4#A71
  #HB7#A77B71 & #AAJ.F7#AI77C72 &
  SUBP>AGRAPH #AAE7#A77A77I7 (! ,9COME
  ,TAX ,ACT2 & ,"P ,,XIII (! ,9COME ,TAX
  ,REGUL,NS7

  ,9T]PRET,N BULLET9S 7,,IT'S7 PROVIDE
,REV5UE ,CANADA'S TE*NICAL 9T]PRET,NS (
9COME TAX LAW4 ,DUE 6_! TE*NICAL NATURE1
,,IT'S >E US$ PRIM>ILY 0DE"P;TAL      #A
              ,,IT-#CGI;,R           A#A
/AFF1 TAX SPECIALI/S1 & O!R 9DIVIDUALS
:O H AN 9T]E/ 9 TAX MATT]S4 ,= ^? R1D]S
:O PREF] A LESS TE*NICAL EXPLAN,N (!
LAW1 ! ,DE"P;T (F]S O!R PUBLIC,NS1 S* Z
TAX GUIDES & PAMPHLETS4
  ,:ILE ! ,,IT'S D N H ! =CE ( LAW1 !Y C
G5],Y 2 RELI$ ^U Z REFLECT+ ! ,DE"P;T'S
9T]PRET,N (! LAW 6BE APPLI$ ON A 3SI/5T
BASIS 0DE"P;TAL /AFF4 ,9 CASES ": AN
,,IT HAS N YET BE5 REVIS$ 6REFLECT
LEGISLATIVE *ANGES1 R1D]S %D REF] 6!
AM5D$ LEGISL,N & XS E6ECTIVE DATE4
,SIMIL>LY1 C\RT DECI.NS SUBSEQU5T 6!
DATE (! ,,IT %D 2 3SID]$ :5 DET]M9+ !
RELEVANCY (! -;TS 9 ! ,,IT4
  ,AN 9T]PRET,N DESCRIB$ 9 AN ,,IT
APPLIES Z (! DATE ! ,,IT IS PUBLI%$1
UN.S O!RWISE SPECIFI$4 ,:5 "! IS A *ANGE
9 A PREVI\S 9T]PRET,N &! *ANGE IS
B5EFICIAL 6TAXPAY]S1 X IS USU,Y E6ECTIVE
= ALL FUTURE ASSESS;TS & REASSESS;TS4
,IF ! *ANGE IS N FAV\RA# 6TAXPAY]S1 X W
NORM,Y 2 E6ECTIVE =! CURR5T & SUBSEQU5T
                                      #B
              ,,IT-#CGI;,R           B#A
TAX,N YE>S OR = TRANSAC;NS 5T]$ 96AF !
DATE (! ,,IT4
  ,A *ANGE 9 A DE"P;TAL 9T]PRET,N MAY AL
2 ANN\NC$ 9 ! ,9COME ,TAX ,TE*NICAL
,NEWS4
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9 ? ,,IT1 PL1SE S5D !M TO3

  ,DIRECTOR1 ,BUSI;S & ,PUBLIC,NS
    ,DIVI.N
  ,9COME ,TAX ,RUL+S & ,9T]PRET,NS
    ,DIRECTORATE
  ,POLICY & ,LEGISL,N ,BRAN*
  ,REV5UE ,CANADA
  ,OTTAWA ,,ON
  ,K#A;,A #J;,L#E

  ,9T]PRET,N BULLET9S C 2 F.D ON !
,REV5UE ,CANADA ,9T]NET SITE AT3
_+WWW.RC.GC.CA_:
  ,ON ,NOVEMB] #A1 #AIII1 ,REV5UE
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& ,REV5UE ,AG5CY4
                                      #C
                 ,3T5TS              C#A
    
,APPLIC,N
,SUMM>Y
,4CUS.N & ,9T]PRET,N
  ,G5]AL 7P>AGRAPH #A7
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    #B-C7
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    ,LOSSES 7P>AGRAPHS #D-F7
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    #G7
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    & ,RELAT$ ,=EIGN ,TAX 7P>AGRAPH #H7
  ,TAXABIL;Y ( ,AM.TS ,ALLOCAT$
    7P>AGRAPH #I7
  ,4TRIBU;NS 6,B5EFICI>IES 7P>AGRAPHS
    #AJ-AA7
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    7P>AGRAPHS #AB-AD7
  ,)HOLD+ ,REQUIRE;TS 7P>AGRAPH #AE7
  ,3T+5T ,ALLOC,NS & ,=FEIT$ ,AM.TS
    7P>AGRAPHS #AF-AH7
  
                                      #D
              ,,IT-#CGI;,R           D#A
  ,NON-,RESID5T ,B5EFICI>IES 7P>AGRAPH
    #AI7
,APP5DIX
,EXPLAN,N ( ,*ANGES

               ,APPLIC,N
    
  ,? BULLET9 C.ELS & REPLACES ,9T]PRET,N
,BULLET9 ,,IT-#CGI DAT$ ,MAY #CJ1 #AIGG4
,! E6ECTIVE DATE (A "PICUL> LEGISLATIVE
PROVI.N 4CUSS$ 9 ! BULLET9 MAY 2 9DICAT$
9 ! ,EXPLAN,N ( ,*ANGES SEC;N 7OR1 9 "S
CASES1 9 ! ,4CUS.N & ,9T]PRET,N SEC;N7
(! BULLET94 ,H["E1 ": ! BULLET9 IS SIL5T
) RESPECT 6! E6ECTIVE DATE (A "PICUL>
PROVI.N1 S* DATE C 2 OBTA9$ F ! LEGISL,N
XF4
--------------------------------------#B
                ,SUMM>Y
    
  ,AN EMPLOYEES PR(IT %>+ PLAN 7,,EPSP7
IS AN >RANGE;T T ALL[S AN EMPLOY] 6%>E
PR(ITS ) ALL1 OR A DESIGNAT$ GR\P (1
EMPLOYEES4 ,"U AN ,,EPSP1 AM.TS >E    #E
              ,,IT-#CGI;,R           A#B
PD 6A TRU/EE 6BE HELD & 9VE/$ =! B5EFIT
(! EMPLOYEES :O >E B5EFICI>IES (! PLAN4
,EA* YE>1 ! TRU/EE IS REQUIR$ 6ALLOCATE
6S* B5EFICI>IES ALL EMPLOY] 3TRIBU;NS1
PR(ITS F TRU/ PROP]TY1 CAPITAL GA9S &
LOSSES1 & C]TA9 AM.TS 9 RESPECT (
=FEITURES4 ,^! ALLOCAT$ AM.TS1 ) C]TA9
EXCEP;NS1 >E 9CLUD$ 9 -PUT+ ! TAXA#
9COME (! B5EFICI>IES =! YE> 9 : !Y >E
ALLOCAT$ & >E N SUBJECT 6TAX :5 ACTU,Y
RCVD 0! B5EFICI>IES4
  ,? BULLET9 3C]NS ! REQUIR$ ANNUAL
ALLOC,NS 79CLUD+ REALLOC,NS ( =FEIT$
AM.TS7 F AN ,,EPSP 6EMPLOYEES :O >E
B5EFICI>IES (! PLAN4 ,X AL 4CUSSES ! TAX
3SEQU;ES ( 4TRIBU;NS ( M"OY & O!R
PROP]TIES F ! ,,EPSP 6! B5EFICI>IES4
  ,= 9=M,N P]TA9+ 63TRIBU;NS 6AN ,,EPSP1
SEE ! CURR5T V].N ( ,,IT-#BHJ1
,EMPLOYEES ,PR(IT ,%>+ ,PLANS--,PAY;TS
,-PUT$ 0,REF];E 6,PR(ITS4


                                      #F
          ,4CUS.N & ,9T]PRET,N       B#B
                 ,G5]AL
    
#A4 ,AN ,,EPSP1 Z DEF9$ 0SUBSEC;N
  #ADD7#A71 IS AN >RANGE;T T ALL[S AN
  EMPLOY] 6%>E PR(ITS ) ALL1 OR A
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  ,,EPSP1 AM.TS >E PD 6A TRU/EE 6BE HELD
  & 9VE/$ =! B5EFIT (! EMPLOYEES :O >E
  B5EFICI>IES (! PLAN4

  ,P>AGRAPH 7B7 (! ,,EPSP DEF9I;N 9
  SUBSEC;N #ADD7#A7 REQUIRES T ! TRU/EE
  ALLOCATE EA* YE>--ON EI A 3T+5T OR AN
  ABSOLUTE BASIS--6EMPLOYEES :O >E
  B5EFICI>IES (! PLAN3
  7A7 ALL AM.TS RCVD 9 ! YE> 0! TRU/EE F
    ! EMPLOY] OR A CORPOR,N T DOES N D1L
    AT >M'S L5G? )! EMPLOY]2
  7B7 ALL PR(ITS =! YE> F TRU/ PROP]TY
    7-PUT$ )\T REF];E 6CAPITAL GA9S OR
    CAPITAL LOSSES7 7SEE P>AGRAPHS #B &
    #C72
  
                                      #G
              ,,IT-#CGI;,R           C#B
  7C7 AF #AIGA1 ALL CAPITAL GA9S &
    CAPITAL LOSSES (! TRU/ =! YE> 7SEE
    P>AGRAPHS #D 6#F72 &
  7D7 ! TOTAL ( ALL AM.TS =! YE> EA* ( :
    IS AN AM.T T AN EMPLOYEE IS 5TITL$
    6DEDUCT "U SUBSEC;N #ADD7#I7 7SEE
    P>AGRAPH #AF74
  
       ,DET]M9,N ( ,TRU/ ,PR(ITS
    
#B4 ,9 DET]M9+ TRU/ PR(ITS =! PURPOSES (
  SUBP>AGRAPH 7B77;II7 (! ,,EPSP DEF9I;N
  9 SUBSEC;N #ADD7#A71 A TRU/ "U AN
  ,,EPSP IS =! MO/ "P SUBJECT 6! SAME
  PROVI.NS (! ,ACT Z O!R TRU/S4 ,Z A
  RULE1 ! GROSS 9COME WD 9CLUDE ANY
  9T]E/1 R5TALS1 ROYALTIES1 DIVID5DS1
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  2 9COME 9 ! H&S ( AN 9DIVIDUAL "U !
  ,ACT4 ,GROSS 9COME WD N 9CLUDE PROCE$S
  RESULT+ F ! D1? (! LIFE 9SUR$ "U C]TA9
  LIFE 9SUR.E POLICIES4 ,= EXAMPLE1 IF !
  TRU/ RCVS A PAY;T RESULT+ F ! D1? ( AN
  9SUR$ P]SON "U A LIFE 9SUR.E        #H
              ,,IT-#CGI;,R           D#B
  POLICY 7O!R ?AN AN ANNU;Y 3TRACT7 [N$
  0! TRU/1 &! POLICY 0 LA/ ACQUIR$ 2F
  ,DECEMB] #B1 #AIHB1 OR IS AN EXEMPT
  POLICY1 ! PAY;T IS RCVD TAX-FREE & ?US
  NO AM.T WD 2 9CLUD$ 9 9COME4 ,AN
  EXEMPT POLICY IS A POLICY : IS ISSU$
  MA9LY = 9SUR.E PROTEC;N & N = 9VE/;T
  PURPOSES4 ,= M 9=M,N ON LIFE 9SUR.E
  POLICIES1 SEE ! CURR5T V].N (
  ,,IT-#HG1 ,POLICYHOLD]S' ,9COME ,F
  ,LIFE ,9SUR.E ,POLICIES4 ,! TRU/ C
  DEDUCT F GROSS 9COME R1SONA# EXP5SES
  RELAT+ 6! NORMAL OP],N (! TRU/ 6!
  EXT5T T S* EXP5SES >E N 4ALL[$ "U A
  PROVI.N (! ,ACT1 S* Z P>AGRAPH
  #AH7#A77A74 ,= M 9=M,N AB ! DEDUC;N (
  EXP5SES1 SEE P>AGRAPH #C4
#C4 ,:5 A TRU/ HAS 9CURR$ OP]AT+ EXP5SES
  7= EXAMPLE1 EXP5SES 9CURR$ 9 E>N+
  9VE/;T 9COME & ADM9I/RATIVE EXP5SES71
  !Y >E 6BE *>G$ F/ AG/ .O!R .9COME 7S*
  Z ,CANADIAN-S\RC$ BUSI;S 9COME OR
  R5TAL 9COME74 .,O!R .9COME DOES N
  9CLUDE ! FOLL[+ AM.TS3              #I
              ,,IT-#CGI;,R           E#B
  7A7 EMPLOY] 3TRIBU;NS1
  7B7 9T]E/ 9COME1
  7C7 TAXA# DIVID5DS F TAXA# ,CANADIAN
    CORPOR,NS1
  7D7 =EIGN S\RCE 9COME1
  7E7 CAPITAL GA9S OR CAPITAL LOSSES1
  7F7 =FEIT$ AM.TS 7SEE P>AGRAPH #AF71
  7G7 NON-TAXA# DIVID5DS F ,CANADIAN
    CORPOR,NS1 &
  7H7 EMPLOYEE 3TRIBU;NS4
  
  ,ANY EXP5SES T _C 2 APPLI$ AG/ .O!R
  .9COME M/ !N 2 *>G$1 9 A MANN] T IS AT
  ! 4CRE;N (! TRU/EE1 AG/ ! RECEIPTS
  LI/$ 9 7A7 "? 7D7 ABV4

      ,ALLOC,N ( ,CAPITAL ,GA9S &
            ,CAPITAL ,LOSSES
    
#D4 ,ANY TAXA# CAPITAL GA9S OR ALL[A#
  CAPITAL LOSSES R1LIZ$ 0A TRU/ GOV]N$
  0AN ,,EPSP1 ON ! 4POSI;N OR DEEM$
  4POSI;N 7SEE P>AGRAPH #F7 ( PROP]TY AF
  #AIGA1 M/ 2 9CLUD$ 0!              #AJ
              ,,IT-#CGI;,R           F#B
  B5EFICI>IES 9 -PUT+ _! 9COME =! YE> !
  CAPITAL GA9S OR LOSSES 7 ALLOCAT$ 6!M4
  ,CAPITAL GA9S & CAPITAL LOSSES R1LIZ$
  0! TRU/ ON ! 4POSI;N OR DEEM$ 4POSI;N
  ( PROP]TY 2F #AIGB1 & A3RU$ GA9S &
  A3RU$ LOSSES AT ,DECEMB] #CA1 #AIGA1 W
  N 2 3SID]$ 9 -PUT+ ! 9COME (!
  B5EFICI>IES (! PLAN :5 ALLOCAT$ TO1 OR
  RCVD BY1 !M4
#E4 ,PROVID$ ! T]MS (! TRU/ D N SPECIFY
  ! ME?OD ( ALLOC,N1 ! TRU/EE MAY
  ALLOCATE CAPITAL GA9S & CAPITAL LOSSES
  AM;G B5EFICI>IES Z ! TRU/EE 3SID]S
  R1SONA#4 ,GA9S & LOSSES S ALLOCAT$ >E
--------------------------------------#C
  DEEM$ "U SUBSEC;N #ADD7#D7 6BE CAPITAL
  GA9S OR CAPITAL LOSSES (! B5EFICI>IES
  6:OM !Y 7 ALLOCAT$ & ?US ! B5EFICI>IES
  WD 9CLUDE ?REE-QU>T]S (! CAPITAL GA9
  OR CAPITAL LOSS 9 -PUT+ _! 9COME =!
  YE>4
#F4 ,SUBSEC;N #ADD7#D.B7 PROVIDES A
  ME?OD ( ALLOCAT+ UNR1LIZ$ GA9S OR
  LOSSES ( AN ,,EPSP 6!              #AA
              ,,IT-#CGI;,R           A#C
  B5EFICI>IES (! PLAN4 ,"U SUBSEC;N
  #ADD7#D.B71 ! TRU/EE (A TRU/ GOV]N$
  0AN ,,EPSP T 0
  --IN EXI/;E 2F #AIGB &= : AN ELEC;N "U
    SUBSEC;N #ADD7#D.A7 0 MADE 7SEE 2L71
    OR
  --E/ABLI%$ AF #AIGA1
  
  C ELECT1 9 PRESCRIB$ MANN] & =M1 6H A
  DEEM$ 4POSI;N ( ANY (! CAPITAL PROP]TY
  (! TRU/ = PROCE$S ( 4POSI;N EQUAL 6!
  PROP]TY'S FAIR M>KET VALUE ON ! "D (!
  DEEM$ 4POSI;N1 XS ADJU/$ CO/ BASE ON T
  "D OR ANY AM.T 2T ^! TWO AM.TS4 ,S*
  PROP]TY IS DEEM$ 6H BE5 REACQUIR$ 0!
  TRU/ IMMLY "!AF AT A CO/ EQUAL 6!
  PROCE$S ( 4POSI;N4 ,AN ELEC;N "U
  SUBSEC;N #ADD7#D.B7 IS MADE 0FIL+ ,=M
  ,T#CJJI1 ,ELEC;N = ,DEEM$ ,4POSI;N &
  ,REACQUISI;N ( ,CAPITAL ,PROP]TY (A
  ,TRU/ ,GOV]N$ 0AN ,EMPLOYEES ,PR(IT
  ,%>+ ,PLAN ,"U ,SUBSEC;N #ADD7#D.B74
  ,! ELEC;N M/ 2 FIL$ 0! TRU/EE AT !
  EMPLOY]'S TAX C5TRE ON OR 2F !     #AB
              ,,IT-#CGI;,R           B#C
  LA/ "D (! TAX,N YE> (! TRU/ 9 : !
  ELEC;N IS MADE & M/ 2 ) RESPECT
  6PROP]TY DEEM$ 6H BE5 4POS$ ( 9 T
  TAX,N YE>4

  ,AN ELEC;N "U SUBSEC;N #ADD7#D.A7 0
  AVAILA# = ,,EPSP'S 9 EXI/;E 2F #AIGB &
  M/ H BE5 FIL$ 2F #AIGF4 ,IF ? ELEC;N 0
  MADE1 ! TRU/ 0 DEEM$ 6H 4POS$ ( EA*
  CAPITAL PROP]TY [N$ 0! TRU/ ON
  ,DECEMB] #CA1 #AIGA ON T "D1 = PROCE$S
  ( 4POSI;N EQUAL 6! FAIR M>KET VALUE (!
  PROP]TY ON T "D1 & 6H REACQUIR$ !
  PROP]TY ON ,JANU>Y #A1 #AIGB =! SAME
  AM.T4 ,! CAPITAL GA9S OR CAPITAL
  LOSSES RESULT+ F S* DEEM$ 4POSI;NS
  7I4E41 ! GA9S OR LOSSES A3RU$ 2F
  #AIGB7 M/ H BE5 ALLOCAT$ 6!
  B5EFICI>IES 0! TRU/EE 2F #AIGF4 ,S*
  CAPITAL GA9S & CAPITAL LOSSES 7 N
  3SID]$ 9 -PUT+ ! 9COME (! B5EFICI>IES
  (! PLAN :5 ALLOCAT$4 ,NOR >E !Y 3SID]$
  9 -PUT+ ! 9COME (! B5EFICI>IES :5 RCVD
  0!M4                               #AC
      ,ALLOC,N ( ,TAXA# ,DIVID5DS    C#C
    
#G4 ,TAXA# DIVID5DS F TAXA# ,CANADIAN
  CORPOR,NS 7REDUC$1 IF APPLICA#1
  0EXP5SES ASSIGN$ 0! TRU/EE--SEE
  P>AGRAPH #C7 ALLOCAT$ 6B5EFICI>IES >E
  DEEM$ "U SUBSEC;N #ADD7#H7 6BE AM.TS
  RCVD DIRECTLY 0!M4 ,ACLY1 S* DIVID5DS
  >E SUBJECT 6! .GROSS-UP "U P>AGRAPH
  #HB7#A77B71 &! DIVID5D TAX CR$IT "U
  SEC;N #ABA IS AVAILA#4

     ,ALLOC,N ( ,=EIGN ,NON-,BUSI;S
      ,9COME & ,RELAT$ ,=EIGN ,TAX
    
#H4 ,! TRU/EE MAY ALLOCATE =EIGN NON-
  BUSI;S 9COME 6B5EFICI>IES (! ,,EPSP ON
  A R1SONA# BASIS HAV+ REG>D 6ALL !
  CIRCUM/.ES 9CLUD+ ! T]MS & 3DI;NS (!
  PLAN4 ,"U SUBSEC;N #ADD7#H.A71 ANY
  =EIGN TAX PD 0! TRU/ ON ! =EIGN NON-
  BUSI;S 9COME IS1 =! PURPOSES (! =EIGN
  TAX CR$IT RULES 9 SUBSEC;N #ABF7#A71
  TR1T$ Z HAV+ BE5 PD 0! B5EFICI>IES
  6:OM ! =EIGN NON-BUSI;S 9COME 0    #AD
              ,,IT-#CGI;,R           D#C
  ALLOCAT$4 ,! TAX IS 6BE ALLOCAT$ 9 !
  SAME RATIO T ! =EIGN NON-BUSI;S 9COME
  0 ALLOCAT$ 6! B5EFICI>IES4

     ,TAXABIL;Y ( ,AM.TS ,ALLOCAT$
    
#I4 ,! E6ECT ( SUBSEC;NS #ADD7#C71
  #ADD7#D71 & #ADD7#H7 IS T !
  B5EFICI>IES ( AN ,,EPSP M/ 9CLUDE 9
  9COME =A YE> ANY AM.T ALLOCAT$ 6!M1 EI
  3T+5TLY OR ABSOLUTELY1 0! TRU/EE DUR+
  ! YE>1 EXCEPT = AM.TS ALLOCAT$ 6!
  B5EFICI>IES3
  7A7 F _! [N 3TRIBU;NS2
  7B7 RESULT+ F CAPITAL GA9S (! TRU/ T
    _H EI BE5 R1LIZ$ 0! TRU/ OR _H A3RU$
    6! TRU/ PROP]TY PRIOR 6#AIGB2 &
  7C7 RESULT+ F NON-TAXA# DIVID5DS RCVD
    0! TRU/ F A TAXA# ,CANADIAN
    CORPOR,N4
  ,! PROVI.NS 9 SUBSEC;NS #ADD7#C7 &
  7#D7 ASSUME T PO/-#AIGA CAPITAL GA9S
  OR LOSSES W 2 ALLOCAT$ 0! TRU/ :5
  R1LIZ$4 ,H["E1 Z NOT$ 9 P>AGRAPH   #AE
              ,,IT-#CGI;,R           E#C
  #F1 SUBSEC;N #ADD7#D.B7 PROVIDES A
  ME?OD ":BY A TRU/ C E6ECTIVELY
  ALLOCATE UNR1LIZ$ PO/-#AIGA CAPITAL
  GA9S OR LOSSES4 ,IF A TRU/ ALLOCATES
  UNR1LIZ$ CAPITAL GA9S OR LOSSES
  PURSUANT 6SUBSEC;N #ADD7#D.B71 S* GA9S
  OR LOSSES W N 2 ALLOCAT$ :5 ACTU,Y
  R1LIZ$4

        ,4TRIBU;NS 6,B5EFICI>IES
    
#AJ4 ,PURSUANT 6SUBSEC;NS #ADD7#F7 &
  7#G71 B5EFICI>IES >E N SUBJECT 6TAX ON
  PAY;TS !Y RCV F ! TRU/EE ( AN ,,EPSP
  PROVID$ ! PAY;TS REPRES5T3
  7A7 AM.TS !Y PD 6! TRU/EE2
  7B7 AM.TS PREVI\SLY ALLOCAT$ 6!M2
  7C7 CAPITAL GA9S MADE 0! TRU/ = TAX,N
    YE>S AF #AIGA 6! EXT5T ALLOCAT$ 6!M2
  7D7 CAPITAL GA9S EI R1LIZ$ 0! TRU/ 2F
    #AIGB OR T REPRES5T APPRECI,N 2F
    #AIGB 9 ! VALUE ( TRU/ PROP]TIES2
  
                                     #AF
              ,,IT-#CGI;,R           F#C
  7E7 UNR1LIZ$ CAPITAL GA9S1 Z (
    ,DECEMB] #CA1 #AIGA1 9H]5T 9 ! VALUE
    ( PROP]TY RCVD 0!M F ! TRU/EE2 OR
  7F7 A DIVID5D RCVD 0! TRU/ F A TAXA#
    ,CANADIAN CORPOR,N 7O!R ?AN A
    DIVID5D "U SUBSEC;N #HC7#A7 RCVD AF
    ,MAY #BE1 #AIGF7 6! EXT5T ALLOCAT$
    6!M4
--------------------------------------#D
  ,PAY;TS ATTRIBUTA# 6! ABV S\RCES >E N
  9CLUD$ 9 -PUT+ A B5EFICI>Y'S 9COME 2C
  !Y W H BE5 TAX$ AT AN E>LI] "T OR W 2
  ( S* A NATURE T NO TAX IS PAYA# AT ANY
  "T4
#AA4 ,9 DET]M9+ :E!R OR N A RECEIPT IS
  TAXA#1 ! AM.TS ID5TIFI$ 9 P>AGRAPH #AJ
  M/ 2 REDUC$ 0CAPITAL LOSSES (! TRU/ =
  TAX,N YE>S 5D+ AF #AIGA T H BE5
  ALLOCAT$ 6! B5EFICI>Y & N PREVI\SLY
  APPLI$ 6REDUCE AM.TS ID5TIFI$ 9
  P>AGRAPH #AJ4 ,? PREV5TS B5EFICI>IES F
  TAK+ \ (! TRU/ ALL PR(ITS ALLOCAT$ 6!M
  & L1V+ 9 ! TRU/ CAPITAL LOSSES
  ALLOCAT$ 6!M4                      #AG
       ,4TRIBU;N ( ,PROP]TY ,O!R     A#D
               ,?AN ,M"OY
    
#AB4 ,A TRU/ MAY 4TRIBUTE PROP]TY O!R
  ?AN M"OY 6A B5EFICI>Y 9 FULL
  SATISFAC;N (! B5EFICI>Y'S 9T]E/S 9 AN
  ,,EPSP4 ,9 S* A CASE1 ! TRU/ IS DEEM$
  0P>AGRAPH #ADD7#G.A77A7 6H 4POS$ (!
  PROP]TY = PROCE$S ( 4POSI;N EQUAL 6XS
  CO/ AM.T4 ,EXCEPT ": P>AGRAPH
  #ADD7#G.A77C7 APPLIES 7SEE P>AGRAPH
  #AD71 P>AGRAPH #ADD7#G.A77B7 PROVIDES
  T ! CO/ 6! B5EFICI>Y ( S* PROP]TY IS !
  AM.T T HAS BE5 ALLOCAT$ & 9CLUD$ 9 !
  B5EFICI>Y'S 9COME OR IS O!RWISE EXEMPT
  F 9CLU.N 9 9COME 7I4E41 ! TOTAL (!
  AM.TS DESCRIB$ 9 P>AGRAPHS #ADD7#G77A7
  TO 7G771 LESS ALLOCAT$ CAPITAL LOSSES
  N O!RWISE APPLI$4 ,:5 A B5EFICI>Y RCVS
  M"OY & O!R PROP]TY 9 FULL SATISFAC;N
  (! B5EFICI>Y'S 9T]E/S 9 ! ,,EPSP1 !
  CO/ (! PROP]TY IS ! TOTAL (! AM.TS
  DESCRIB$ 9 P>AGRAPHS #ADD7#G77A7 TO
  7G7 7LESS ALLOCAT$ CAPITAL LOSSES N
  O!RWISE APPLI$71 LESS ! AM.T (     #AH
              ,,IT-#CGI;,R           B#D
  M"OY RCVD 0! B5EFICI>Y4 ,IF A
  B5EFICI>Y RCVS M ?AN "O PROP]TY AT A
  "PICUL> "T1 ! CO/ ( EA* PROP]TY IS3

  ,CO/ 6! B5EFICI>Y (A "PICUL> PROP]TY
  EQUALS ,CO/ AM.T 6! TRU/ (! "PICUL>
  PROP]TY 7IMMLY 2F 4TRIBU;N7 DIVID$
  0,CO/ AM.T 6! TRU/ ( ALL PROP]TIES
  7O!R ?AN M"OY7 2+ 4TRIBUT$ 6!
  B5EFICI>Y MULTIPLI$ 0,TOTAL ( AM.TS
  DESCRIB$ 9 P>AGRAPHS #ADD7#G77A7 TO
  7G7 7LESS ALLOCAT$ CAPITAL LOSSES N
  O!RWISE APPLI$ &! AM.T1 IF ANY1 ( M"OY
  RCVD 0! B5EFICI>Y7

  ,^! PROVI.NS1 9 E6ECT1 PROVIDE =A
  ROLLOV] (A B5EFICI>Y'S TAX-EXEMPT
  9T]E/ 7I4E41 ! AM.T ! B5EFICI>Y
  PREVI\SLY PD TAX ON OR T 0 O!RWISE
  EXEMPT F TAX7 9 ! TRU/ 96O!R PROP]TY1
  "!BY DEF]R+ TAX ON ! 9CR1S$ VALUE (!
  9T]E/ UNTIL ! B5EFICI>Y 4POSES (! O!R

                                     #AI
              ,,IT-#CGI;,R           C#D
  PROP]TY4 ,= AN ILLU/R,N (! APPLIC,N (
  SUBSEC;N #ADD7#G.A71 SEE ! ,APP5DIX4
#AC4 ,IF A B5EFICI>Y RCVS PROP]TY 7O!R
  ?AN M"OY7 9 "PIAL SATISFAC;N (!
  B5EFICI>Y'S 9T]E/S 9 AN ,,EPSP1 AN
  ALLOC,N (! TOTAL (! AM.TS DESCRIB$ 9
  P>AGRAPHS #ADD7#G77A7 TO 7G7 7LESS
  ALLOCAT$ CAPITAL LOSSES N O!RWISE
  APPLI$7 M/ 2 MADE 2T ! PROP]TY RCVD &!
  3T9U+ 9T]E/S (! B5EFICI>Y4 ,!
  B5EFICI>Y'S CO/ (! PROP]TY IS EQUAL 6!
  AM.T 0: ! B5EFICI>Y'S A3.T 7A TRU/
  LIABIL;Y REPRES5T+ ! TOTAL (! S\RCES
  LI/$ 9 P>AGRAPHS #ADD7#G77A7 TO 7G7
  LESS ALLOCAT$ CAPITAL LOSSES N O!RWISE
  APPLI$7 IS REDUC$ Z A RESULT (!
  TRANSAC;N4 ,T IS1 IF ! B5EFICI>Y'S
  A3.T HAS A BAL.E ( 4#E1EJJ 2F PROP]TY
  IS RCVD &A BAL.E ( 4#E1JJJ IMMLY AF1 !
  POR;N (! AM.TS DESCRIB$ 9 P>AGRAPHS
  #ADD7#G77A7 TO 7G7 7LESS ALLOCAT$
  CAPITAL LOSSES N O!RWISE APPLI$7 DEEM$
  6BE ! CO/ (! PROP]TY IS 4#EJJ4
                                     #BJ
              ,,IT-#CGI;,R           D#D
#AD4 ,A B5EFICI>Y ( AN ,,EPSP MAY H
  ELECT$1 "U P>AGRAPH #AAJ.F7#AI77C71
  6REPORT A CAPITAL GA9 ON ! B5EFICI>Y'S
  9T]E/S 9 ! ,,EPSP AT ! 5D ( ,FEBRU>Y
  #BB1 #AIID4 ,9 S* A CASE1 ! ELECT$
  CAPITAL GA9 CR1T$ AN EXEMPT CAPITAL
  GA9S BAL.E 7,,ECGB74 ,? ,,ECGB C 2 US$
  6REDUCE CAPITAL GA9S FL[$ \ 6!
  B5EFICI>Y 0! ,,EPSP = TAX,N YE>S 5D+
  2F #BJJE & CAPITAL GA9S R1LIZ$ ON !
  4POSI;N (! B5EFICI>Y'S 9T]E/S 9 !
  ,,EPSP 9 ^? YE>S4 ,"U SUBSEC;N
  #CI.A7#G71 IF ! B5EFICI>Y C1SES 6H ANY
  9T]E/ 9 ! ,,EPSP1 ! B5EFICI>Y'S ,,ECGB
  W 2 REDUC$ 6NIL4 ,"U P>AGRAPH
  #EC7#A77P71 IF1 AT ! 5D ( #BJJD1 !
  B5EFICI>Y / HOLDS AN 9T]E/ 9 ! ,,EPSP
  &! B5EFICI>Y HAS N US$ UP ! ,,ECGB1 !
  BAL.E W "!AF 2 A4$ 6! ADJU/$ CO/ BASE
  (! B5EFICI>Y'S 9T]E/S 9 ! ,,EPSP4

  ,=! #AIID & SUBSEQU5T TAX,N YE>S
  79CLUD+ TAX,N YE>S AF #BJJD71 P>AGRAPH
  #ADD7#G.A77C7 PROVIDES T1 ": A     #BA
              ,,IT-#CGI;,R           E#D
  B5EFICI>Y ( AN ,,EPSP RCVS A 4TRIBU;N
  ( PROP]TY--O!R ?AN M"OY--IN FULL OR
  "PIAL SATISFAC;N (! B5EFICI>Y'S 9T]E/S
  9 ! ,,EPSP1 ! B5EFICI>Y MAY ELECT
  69CR1SE ! CO/ (! PROP]TY DET]M9$ "U
  P>AGRAPH #ADD7#G.A77B7 7SEE P>AGRAPH
  #AB7 0A POR;N OR ! FULL AM.T (! 8UNUS$
  POR;N (! B5EFICI>Y'S EXEMPT CAPITAL
  GA9S BAL.E0 9 RESPECT (! ,,EPSP4 ,!
  8UNUS$ POR;N (! B5EFICI>Y'S EXEMPT
  CAPITAL GA9S BAL.E0 IS DEF9$ 9
  SUBSEC;N #ADD7#A74 ,? ELEC;N POT5TI,Y
  ALL[S ! B5EFICI>Y 6FULLY B5EFIT F !
  UNUS$ ,,ECGB T MAY O!RWISE H BE5 LO/ Z
  A RESULT (! LIMIT,N 9 SUBSEC;N
  #CI.A7#G74

          ,)HOLD+ ,REQUIRE;TS
    
#AE4 ,)HOLD+ "U SUBSEC;N #AEC7#A7 IS N
  REQUIR$ :5 AN EMPLOY] 3TRIBUTES 6AN
  ,,EPSP EV5 ?\< ! EMPLOY]'S 3TRIBU;NS
  >E 9CLUD$ 9 ! B5EFICI>Y'S 9COME Z
  EMPLOY;T 9COME "U P>AGRAPH         #BB
              ,,IT-#CGI;,R           F#D
  #F7#A77D74 ,NOR IS )HOLD+ REQUIR$ :5 !
  TRU/EE MAKES AN ALLOC,N 6! B5EFICI>Y1
  OR :5 ! TRU/EE MAKES A PAY;T 6!
  B5EFICI>Y &! PAY;T IS N REQUIR$ 6BE
  9CLUD$ 9 ! 9COME (! B5EFICI>Y4

   ,3T+5T ,ALLOC,NS & ,=FEIT$ ,AM.TS
    
#AF4 ,Z NOT$ 9 P>AGRAPH #I1 AM.TS
  ALLOCAT$ "U AN ,,EPSP 6A B5EFICI>Y >E
  REQUIR$ 6BE 9CLUD$ 9 ! B5EFICI>Y'S
  9COME =! YE> ( ALLOC,N :E!R ! ALLOC,N
  0 3T+5T OR ABSOLUTE4 ,?US1 :5 AN AM.T
  7= EXAMPLE1 AN EMPLOY]'S 3TRIBU;N7 IS
  ALLOCAT$ 6A B5EFICI>Y
--------------------------------------#E
  3T+5T ON 8 OR H] 3T9U+ 9 EMPLOY;T =A
  C]TA9 NUMB] ( YE>S1 ! B5EFICI>Y M/
  9CLUDE ! AM.T 9 9COME 9 ! YE> X IS
  ALLOCAT$ EV5 ?\<1 IF EMPLOY;T C1SES 2F
  ! REQUIR$ NUMB] ( YE>S1 HE OR %E W N
  RCV ! AM.T4 ,9 ? TYPE ( SITU,N1
  SUBSEC;N #ADD7#I7 PROVIDES T IF A
  8P]SON0 7SEE P>AGRAPH #AG7 C1SES   #BC
              ,,IT-#CGI;,R           A#E
  AT ANY "T 9 A TAX,N YE> 6BE A
  B5EFICI>Y "U AN ,,EPSP & DOES N 2COME
  A B5EFICI>Y "U ! PLAN AF T "T & 9 !
  YE>1 AN AM.T DET]M9$ 0! =MULA 9
  SUBSEC;N #ADD7#I7 MAY 2 DEDUCT$ 0!
  P]SON "U P>AGRAPH #H7#A77O4#A7 9 -PUT+
  9COME =! YE>4 ,G5],Y1 ! DEDUC;N EQUALS
  ! AM.T =FEIT$ "U ! PLAN1 LESS C]TA9
  ADJU/;TS4
#AG4 ,! T]M 8P]SON0 IS DEF9$ 9 SUBSEC;N
  #BDH7#A7 & 9CLUDES N ONLY AN 9DIVIDUAL
  B AL ! E/ATE1 OR HEIR OR LEGAL
  REPRES5TATIVE ( T 9DIVIDUAL4 ,Z A
  RESULT1 IF A =FEITURE O3URS AF ! D1? (
  AN EMPLOYEE1 ! E/ATE OR HEIR WD 2
  5TITL$ 6B5EFIT F SUBSEC;N #ADD7#I7 &
  TAKE 96A3.T AM.TS PREVI\SLY ALLOCAT$
  6! EMPLOYEE4
#AH4 ,UN.S ! ,,EPSP PROVIDES O!RWISE1 AN
  9DIVIDUAL :O C1SES 6BE AN EMPLOYEE (
  AN EMPLOY] IS N REQUIR$ "U ! ,ACT
  6=FEIT ANY AM.T "U ! EMPLOY]'S ,,EPSP
  0R1SON ( C1S+ 6BE AN EMPLOYEE4
                                     #BD
       ,NON-,RESID5T ,B5EFICI>IES    B#E
    
#AI4 ,C]TA9 ALLOC,NS 6NON-RESID5T
  B5EFICI>IES "U AN ,,EPSP1 S* Z !
  ALLOC,N ( EMPLOY] 3TRIBU;NS1 6! EXT5T
  T !Y RELATE 6DUTIES P]=M$ 9 ,CANADA >E
  REQUIR$ 6BE 9CLUD$ 9 -PUT+ ! NON-
  RESID5T'S TAXA# 9COME E>N$ 9 ,CANADA
  "U ,"P ;,I 0VIRTUE ( SUBSEC;N #B7#C71
  SUBP>AGRAPH #AAE7#A77A77;I71 &
  P>AGRAPH #F7#A77D74 ,S* ALLOC,NS 6!
  EXT5T T !Y RELATE 6DUTIES P]=M$ \TSIDE
  ,CANADA >E N TAXA# 9 ,CANADA4 ,? WD
  9CLUDE ALLOC,NS ( ANY GR[? 9 ! ,,EPSP
  7I4E41 9T]E/ & DIVID5DS7 ATTRIBUTA#
  6EMPLOY] 3TRIBU;NS T RELATE 6DUTIES
  P]=M$ \TSIDE ,CANADA4

  ,"P ,,XIII TAX DOES N APPLY 6S*
  ALLOC,NS1 9CLUD+ ! DEEM$ RECEIPT (
  DIVID5DS 4CUSS$ 9 P>AGRAPH #G 2C S*
  DEEM$ RECEIPTS >E N 3SID]$ 6BE A PAY;T
  OR CR$IT+ ( DIVID5DS =! PURPOSES ( ,"P
  ,,XIII4 ,IF ! NON-RESID5T SUBSEQU5TLY
  2COMES A RESID5T ( ,CANADA1        #BE
              ,,IT-#CGI;,R           C#E
  PAY;TS RCVD :ILE RESID5T T REPRES5T S*
  ALLOC,NS RELAT$ 6DUTIES P]=M$ \TSIDE
  ,CANADA >E REQUIR$ 6BE 9CLUD$ 9 9COME4
--------------------------------------#F
                ,APP5DIX
    
  ,ASSUME T ! FOLL[+ DATA SUMM>IZES ALL
! TRANSAC;NS ( AN ,,EPSP T HAS TWO
B5EFICI>IES3
  --,_! EMPLOY] 3TRIBUT$ 4#DJJ \ (
    PR(ITS 6! TRU/EE4
  --,! TRU/EE ALLOCAT$ 4#BJJ 6EA* (! TWO
    B5EFICI>IES1 &! B5EFICI>IES 9CLUD$ ?
    AM.T 9 9COME 9 ! YE> ( ALLOC,N4
  --,! TRU/EE PUR*AS$ ! FOLL[+ ?REE
    PROP]TIES3
    ,PROP]TY ;,A EQUALS 4#BJJ
    ,PROP]TY ;,B EQUALS 4#AJJ
    ,PROP]TY ;,C EQUALS 4#EJ
  --,! TRU/EE 4TRIBUT$ ! FOLL[+ ASSETS
    6! TWO B5EFICI>IES3
    ,F/ B5EFICI>Y--PROP]TY ;,A & 4#EJ 9
      CA%
                                     #BF
              ,,IT-#CGI;,R           A#F
    ,SECOND B5EFICI>Y--PROP]TY ;,B &
      PROP]TY ;,C
  --,NEI B5EFICI>Y FIL$ AN ELEC;N1 "U
    P>AGRAPH #AAJ.F7#AI77C71 6REPORT A
    CAPITAL GA9 ON _! 9T]E/S 9 ! ,,EPSP
    AT ! 5D ( ,FEBRU>Y #BB1 #AIID4
  ,AT ! "T ( 4POSI;N1 PROP]TY ;,A _H A
FAIR M>KET VALUE ( 4#CEJ & PROP]TIES ;,B
& ;,C EA* _H A FAIR M>KET VALUE ( 4#BJJ4
  ,! APPLIC,N ( SUBSEC;N #ADD7#G.A7
RESULTS 9 DEEM$ PROCE$S ( 4POSI;N 6!
TRU/ 9 ! AM.T (3
    ,PROP]TY ;,A EQUALS 4#BJJ
    ,PROP]TY ;,B EQUALS 4#AJJ
    ,PROP]TY ;,C EQUALS 4#EJ
  ,! CO/ ( EA* PROP]TY 6! B5EFICI>IES WD
BE3
  ,F/ B5EFICI>Y3
  ,PROP]TY ;,A EQUALS 4#BJJ DIVID$
04#BJJ MULTIPLI$ 04#AEJ 99 EQUALS 4#AEJ

99 ,! 4#BJJ F AM.TS DESCRIB$ 9 P>AGRAPHS
  #ADD7#G77A7 TO 7G7 LESS ! 4#EJ CA%
  RCVD4                              #BG
              ,,IT-#CGI;,R           B#F
  ,SECOND B5EFICI>Y3
,PROP]TY ;,B EQUALS 4#AJJ DIVID$ 04#AEJ
MULTIPLI$ 04#BJJ EQUALS 4#ACC
,PROP]TY ;,C EQUALS 4#EJ DIVID$ 04#AEJ
MULTIPLI$ 04#BJJ EQUALS 4#FG
  ,! B5EFICI>IES ?US 8ROLL0 _! TAX-
EXEMPT 9T]E/ 7I4E41 ! AM.T !Y PREVI\SLY
PD TAX ON OR T 0 O!RWISE EXEMPT F TAX7 9
! TRU/ 96O!R PROP]TY & "!BY DEF] TAX ON
! 9CR1S$ VALUE ( ? 9T]E/ UNTIL !Y 4POSE
(! O!R PROP]TY4
--------------------------------------#G
          ,EXPLAN,N ( ,*ANGES
               ,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


                                     #BH
           ,R1SONS =! ,REVI.N        A#G
    
  ,? BULLET9 IS 2+ AM5D$ 6REFLECT
AM5D;TS 6! ,9COME ,TAX ,ACT 5ACT$
0,S4,C4 #AIHJ-HA-HB-HC1 C4 #ADJ 7=M]LY
,BILL ;,C-#ACI72 ,S4,C4 #AIHF1 C4 #F
7=M]LY ,BILL ;,C-#HD72 ,S4,C4 #AIHH1 C4
#EE 7=M]LY ,BILL ;,C-#ACI72 ,S4,C4
#AIID1 C4 #BA 7=M]LY ,BILL ;,C-#BG72
,S4,C4 #AIIE1 C4 #C 7=M]LY ,BILL
;,C-#EI72 & ,S4,C4 #AIIH1 C4 #AI 7=M]LY
,BILL ;,C-#BH74 ,! BULLET9 HAS AL BE5
EXP&$ 6PROVIDE A4I;NAL USE;L 9=M,N
P]TA9+ 6,,EPSP'S4 ,! -;TS 9 ? BULLET9 >E
N A6ECT$ 0ANY DRAFT LEGISL,N REL1S$ 2F
,JULY #AB1 #AIII4

      ,LEGISLATIVE & ,O!R ,*ANGES
    
  ,NEW P>AGRAPH #A HAS BE5 A4$ 6BRIEFLY
DESCRIBE AN ,,EPSP & 6EXPLA9 :AT
ALLOC,NS M/ 2 MADE 0! TRU/EE ON AN ONGO+
ANNUAL BASIS4
  ,P>AGRAPH #B IS =M] P>AGRAPH #A REVIS$
6PROVIDE T ONLY C]TA9 LIFE 9SUR.E    #BI
              ,,IT-#CGI;,R           B#G
POLICY PROCE$S RESULT+ F ! D1? (! LIFE
9SUR$ >E EXCLUD$ 9 ! DET]M9,N ( TRU/
PR(ITS4 ,? REFLECTS ! AM5D;T 6! DEF9I;N
( 84POSI;N0 9 SUBSEC;N #ADH7#I7 :
PROVIDES T A PAY;T ON D1? "U A NON-
EXEMPT LIFE 9SUR.E POLICY ACQUIR$ AF
,DECEMB] #A1 #AIHB IS 3SID]$ A 4POSI;N (
AN 9T]E/ 9 A LIFE 9SUR.E POLICY1
APPLICA# = 4POSI;NS O3URR+ AF ,NOVEMB]
#AB1 #AIHA4
  ,P>AGRAPH #C IS =M] P>AGRAPH #B REVIS$
69DICATE T OP]AT+ EXP5SES _C 2 *>G$ AG/
=FEIT$ AM.TS4 ,AL1 ! REF];E 6LIFE 9SUR.E
PROCE$S HAS BE5 REMOV$ 2C A TRU/'S GROSS
9COME MAY 9CLUDE LIFE 9SUR.E PROCE$S
RESULT+ F ! D1? (! LIFE 9SUR$ 7SEE
P>AGRAPH #B74
  ,P>AGRAPH #D IS =M] P>AGRAPH #C REVIS$
6REFLECT ! REP1L ( P>AGRAPH #C7E74 ,2F
#AIHF1 "U P>AGRAPH #C7E71 AN 9DIVIDUAL
CD DEDUCT UP 64#B1JJJ ( NET CAPITAL
LOSSES F O!R 9COME4

                                     #CJ
              ,,IT-#CGI;,R           C#G
  ,P>AGRAPH #E IS =M] P>AGRAPH #D REVIS$
6REFLECT AM5D;TS 6SEC;NS #C & #CH4 ,!
AM5D;TS PROVIDE T3
    --AF #AIHE1 A NET CAPITAL LOSS =!
      YE> C NO L;G] 2 US$ 6(FSET UP
      64#B1JJJ ( O!R 9COME2 &
    --= #AIIJ & SUBSEQU5T YE>S1 !
      CAPITAL GA9S 9CLU.N RATE IS ?REE-
      QU>T]S4
  ,P>AGRAPH #F IS =M] P>AGRAPH #E EXP&$
6PROVIDE A4I;NAL 9=M,N P]TA9+ 6! ELEC;NS
"U SUBSEC;NS #ADD7#D.A7 & 7#D.B74
  ,P>AGRAPH #G IS =M] P>AGRAPH #F REVIS$
6REFLECT ! AM5D;T 6SEC;N #AAJ.A
6ELIM9ATE ! 4#A1JJJ 9T]E/ & DIVID5D
9COME DEDUC;N = #AIHH & SUBSEQU5T YE>S4
,P>AGRAPH #G HAS AL BE5 REVIS$ 6DELETE !
-;T RELAT+ 6SUBSEC;N #ADD7#I7 S9CE T
PROVI.N IS 4CUSS$ 9 DETAIL 9 NEW
P>AGRAPH #AF4
  ,P>AGRAPHS #I & #AJ 7=M] P>AGRAPHS #AJ
& #AA7 H BE5 REVIS$ 6DELETE ! REF];E
6LIFE 9SUR.E PROCE$S RCVD 0! TRU/ ^U !
D1? (! LIFE 9SUR$4 ,SUBSEC;NS        #CA
              ,,IT-#CGI;,R           D#G
#ADD7#C7 & #ADD7#G7 D N EXCLUDE S* AM.TS
F 9CLU.N 9 9COME4
  ,NEW P>AGRAPH #AD HAS BE5 A4$ 6REFLECT
NEW P>AGRAPH #ADD7#G.A77C7 : IS APPLICA#
6! #AIID & SUBSEQU5T TAX,N YE>S4
,P>AGRAPH #ADD7#G.A77C7 0 A4$ 3SEQU5TIAL
ON ! ELIM9,N (! 4#AJJ1JJJ CAPITAL GA9S
EXEMP;N &! 9TRODUC;N (! ELEC;N
6RECOGNIZE GA9S A3RU$ 6! 5D ( ,FEBRU>Y
#BB1 #AIID4
  ,NEW P>AGRAPH #AE HAS BE5 A4$ 69DICATE
T NO )HOLD+ IS REQUIR$ ON EMPLOY]
3TRIBU;NS 6AN ,,EPSP1 ON ALLOC,NS 6!
B5EFICI>IES OR ON PAY;TS 6! B5EFICI>IES
IF ! PAY;TS >E N REQUIR$ 6BE 9CLUD$ 9 !
9COME (! B5EFICI>IES4
  ,NEW P>AGRAPHS #AF & #AG H BE5 A4$
64CUSS ! RULES 3C]N+ =FEIT$ AM.TS4 ,!Y
REFLECT ! AM5D;TS MADE 6SUBSEC;N
#ADD7#I7 APPLICA# =! #AIIB & SUBSEQU5T
TAX,N YE>S 7EXCEPT T A B5EFICI>Y MAY
ELECT T !Y N APPLY 6! #AIIB TAX,N YE>74
,AM5D$ SUBSEC;N #ADD7#I7 PROVIDES !
P]SON )A DEDUCTI# AM.T R ?AN A TAX   #CB
              ,,IT-#CGI;,R           E#G
CR$IT Z 0 PREVI\SLY AVAILA#4 ,Z WELL1 !
REF];E TO 8EMPLOYEE0 9 SUBSEC;N #ADD7#I7
0 REPLAC$ ) 8P]SON40
  ,NEW P>AGRAPH #AH HAS BE5 A4$ 6CL>IFY
T1 UN.S ! ,,EPSP PROVIDES O!RWISE1 AN
9DIVIDUAL :O C1SES 6BE AN EMPLOYEE ( AN
EMPLOY] IS N REQUIR$ 6=FEIT ANY AM.T "U
! EMPLOY]'S ,,EPSP 0R1SON ( C1S+ 6BE AN
EMPLOYEE4
  ,NEW P>AGRAPH #AI HAS BE5 A4$ 6EXPLA9
C]TA9 RULES 3C]N+ NON-RESID5T ,,EPSP
B5EFICI>IES4
  ,"?\T ? BULLET91 WE H MADE M9OR *ANGES
= CL>IFIC,N OR R1DABIL;Y PURPOSES4









                                     #CC