,CANADA ,CU/OMS #A & ,REV5UE ,AG5CY ,9COME ,TAX ,9T]PRET,N ,BULLET9 ,SUBJECT3 ,,9COME ,,TAX ,,ACT ,ELIGI# ,CAPITAL ,AM.TS ,NUMB]3 ,,IT-#CHF;,R ,DATE3 ,OCTOB] #CJ1 #AIIB ,REF];E3 ,SUBSEC;N #AD7#A7 & SUBP>AGRAPH #AD7#E77A77;IV7 7AL P>AGRAPH #AD7#E77B77 ,APPLIC,N ,? BULLET9 C.ELS & REPLACES ,9T]PRET,N ,BULLET9 ,,IT-#CHF DAT$ ,JULY #D1 #AIGG4 ,SUMM>Y ,? BULLET9 4CUSSES TRANSAC;NS T 9VOLVE AN ELIGI# CAPITAL AM.T RESULT+ F ! 4POSI;N ( ELIGI# CAPITAL PROP]TY4 ,ALL OR A POR;N ( AN ELIGI# CAPITAL AM.T #A ,,IT-#CHF;,R A#A MAY 2 REQUIR$ 6BE 9CLUD$ 9 9COME F A BUSI;S4 ,EXAMPLES ( S* TRANSAC;NS >E ! SALE (A FRAN*ISE OR LIC;E = AN UNLIMIT$ P]IOD1 ! SALE ( GDWILL 9 3NEC;N )A BUSI;S1 ! \T"R SALE (A PROCESS &! SALE ( C]TA9 "RS4 ,H["E1 ": 3SID],N =! 4POSI;N ( ELIGI# CAPITAL PROP]TY IS DEP5D5T ^U ! USE ( OR PRODUC;N F T PROP]TY1 S* 3SID],N DOES N GIVE RISE 6AN ELIGI# CAPITAL AM.T B R IS SIMPLY 9CLUD$ 9 9COME4 ,4CUS.N & ,9T]PRET,N #A4 8,ELIGI# CAPITAL PROP]TY0 78,,EC PROP]TY07 (A BUSI;S MAY 2 BROADLY DESCRIB$ Z 9TANGI# CAPITAL PROP]TY1 S* Z GDWILL & O!R 8NO?+S01 ! CO/ ( : NEI QUALIFIES = CAPITAL CO/ ALL[.E NOR IS FULLY DEDUCTI# 9 ! YE> ( XS ACQUISI;N Z A CURR5T EXP5SE4 8,CUMULATIVE ELIGI# CAPITAL0 IS BASIC,Y AN EXP5DITURE POOL RELAT+ 6,,EC PROP]TY : IS 9CR1S$ 0A POR;N ( EA* 8ELIGI# CAPITAL #B ,,IT-#CHF;,R B#A EXP5DITURE0 78,,EC EXP5DITURE07 MADE 6ACQUIRE ,,EC PROP]TY & DECR1S$ 0EA* 8ELIGI# CAPITAL AM.T0 78,,EC AM.T07 RELAT$ 6! PROCE$S F ! 4POSI;N ( AN ,,EC PROP]TY4 ,! DECR1SE 6! POOL = AN ,,EC AM.T 9 A "PICUL> TAX,N YE> C CAUSE ! POOL 6H A NEGATIVE BAL.E AT ! 5D ( T YE>4 ,": ? O3URS1 SUBSEC;N #AD7#A7 REQUIRES AN AM.T 6BE 9CLUD$ 9 ! TAXPAY]'S 9COME F ! BUSI;S =! YE> &1 9 "S CASES &= C]TA9 TAXPAY]S 7PRIM>ILY 9DIVIDUALS71 AL --------------------------------------#B PROVIDES =A DEEM$ TAXA# CAPITAL GA9 9 ! YE>4 ,A FULL 4CUS.N ON ^! PROVI.NS IS 3TA9$ 9 ! CURR5T V].N ( ,,IT-#ABC1 ,TRANSAC;NS ,9VOLV+ ,ELIGI# ,CAPITAL ,PROP]TY4 #B4 ,! FOLL[+ >E EXAMPLES (! TYPE ( TRANSAC;N T C RESULT 9 AN ,,EC AM.T3 7A7 ,A P]SON SELLS A FRAN*ISE OR LIC;E = AN UNLIMIT$ P]IOD4 ,! SALE IS A 4POSI;N ( ,,EC PROP]TY4 #C ,,IT-#CHF;,R A#B 7B7 ,A P]SON C>RIES ON A BUSI;S =A P]IOD ( "T & !N SELLS ! BUSI;S TGR ) XS ASSOCIAT$ GDWILL4 ,! SALE (! GDWILL IS A 4POSI;N ( ,,EC PROP]TY4 8,GDWILL0 MAY 9CLUDE "O OR M (! FOLL[+3 7;I7 REPUT,N1 7;II7 S]VICES ( EMPLOYEES1 7;III7 FAV\RA# -M]CIAL 3TRACTS1 7;IV7 TRADEM>KS OR TRADE "NS1 7;V7 FAV\RA# F9ANCIAL REL,N%IPS1 7;VI7 MANAGE;T P]=M.E RECORD1 & 7;VII7 NON-COMPETI;N PROVI.NS4 7C7 ,MS ,A [NS A BUSI;S : %E SELLS TGR ) XS ASSOCIAT$ GDWILL 6A CORPOR,N %E [NS OR 3TROLS4 ,! POR;N (! SALE PRICE ATTRIBUT$ 6! GDWILL IS G5],Y 3SID]$ 6BE ! PROCE$S F ! 4POSI;N ( ,,EC PROP]TY PROVID$ T ! SALE IS A BONA FIDE BUSI;S TRANSAC;N4 7D7 ,MR4 ;,X C>RIES ON A BUSI;S OP],N T USES A PROCESS HE HAS DEVELOP$ HMF4 ,HE RCVS 3SID],N = 4CLOS+ ! PROCESS & ALL[+ X 6BE US$ 0! #D ,,IT-#CHF;,R B#B PAY]4 ,S9CE K (! PROCESS IS 9TANGI# PROP]TY & IS N DEPRECIA#1 ! PROCE$S F ! \T"R SALE (! K >E 3SID]$ 6BE F ! 4POSI;N ( ,,EC PROP]TY4 ,H["E1 IF ! K IS N SOLD \T"R B R1 = EXAMPLE1 IS M]ELY LIC5S$ =A LIMIT$ P]IOD ( "T1 OR XS USE IS P]MITT$ "U ! T]MS (A NON-EXCLUSIVE LIC;E1 ! TOTAL PROCE$S =! "R 6USE ! PROCESS >E 3SID]$ 6BE 9COME & TAXA# Z S* 7SEE ! ,F$]AL ,C\RT ( ,APP1L'S DECI.NS 9 ,! ,QUE5 V4 ,CANADIAN ,G5]AL ,ELECTRIC ,-PANY ,LIMIT$1 #HG ,,DTC #EJGJ1 7#AIHG7 #A ,C4,T4,C4 #AHJ1 & ,CANADIAN ,9DU/RIES ,LIMIT$ V4 ,! ,QUE51 #HJ ,,DTC #FAFC1 7#AIHJ7 ,C4,T4,C4 #BBB74 7E7 ,-PANY ;,A1 : IS 9 ! TRUCK+ TRANSPORT BUSI;S1 SELLS XS "R 6USE A "PICUL> TRUCK R\TE 6,-PANY ;,B4 ,"U C]TA9 CIRCUM/.ES ! TRANSAC;N W N 2 3SID]$ 6BE ! SALE (! LIC;E XF1 B #E ,,IT-#CHF;,R #C R W 2 3SID]$ 6BE PAY;T = ALL[+ ,-PANY ;,B TO 8/& 9 ! V5DOR'S %OES0 2F ! PROV9CIAL TRANSPORT,N AU?ORITIES 9 ORD] 6GA9 A BETT] OPPORTUN;Y ( ACQUIR+ A TRUCK+ LIC;E XF4 ,9 S* A CASE1 ! PROCE$S 6,-PANY ;,A >E 3SID]$ 6BE F ! 4POSI;N ( ,,EC PROP]TY4 7F7 ,3SID],N 6A TAXPAY] = P]MIS.N 6USE ! TAXPAY]'S "N 7OR A SIMIL> "N7 IS 3SID]$ 6BE PROCE$S F ! 4POSI;N ( AN ,,EC PROP]TY4 7G7 ,3SID],N 6A TAXPAY] = AM5D+ ! T]MS & 3DI;NS (! TAXPAY]'S LIC;E OR ALL[+ X 6EXPIRE IS 3SID]$ 6BE PROCE$S F ! 4POSI;N ( AN ,,EC PROP]TY4 #C4 ,9 ! SAME WAY T A "PICUL> EXP5DITURE MAY 2 "*IZ$ Z 2+ EI AN ,,EC EXP5DITURE OR A CURR5T EXP5SE DEP5D+ ON ! CIRCUM/.ES (! CASE1 A "PICUL> AM.T ( 3SID],N 6A TAXPAY] MAY 2 EI PROCE$S F ! 4POSI;N ( ,,EC PROP]TY OR AN 9COME RECEIPT4 ,! "*IZ,N (! 3SID],N IS A "Q ( FACT1 AL? ISOLAT$ TRANSAC;NS #F ,,IT-#CHF;,R A#C USU,Y RESULT 9 A 4POSI;N ( ,,EC PROP]TY4 #D4 ,SUBP>AGRAPH #AD7#E77A77;IV7 HAS A 8MIRROR IMAGE TE/0 6DET]M9E :E!R AN AM.T : A TAXPAY] HAS RCVD OR MAY 2COME 5TITL$ 6RCV 9 3NEC;N )A BUSI;S Z A RESULT (A 4POSI;N ( PROP]TY1 IS PROCE$S F ! 4POSI;N ( ,,EC PROP]TY RESULT+ 9 AN ,,EC AM.T4 ,! TE/ IS MET ":1 IF ANY PAY;T _H BE5 MADE AF #AIGA 0! TAXPAY] = T PROP]TY1 S* PAY;T WD H QUALIFI$ Z AN ,,EC EXP5DITURE (! TAXPAY] "U P>AGRAPH #AD7#E77B7 =! BUSI;S4 ,9 O!R ^WS1 A TAXPAY] 4POS+ ( PROP]TY 9 3NEC;N )A BUSI;S LOOKS 9 ! MIRROR 6SEE :E!R1 IF ! TAXPAY] 7 9/1D PUR*AS+ ! PROP]TY1 XS CO/ WD QUALIFY Z AN ,,EC EXP5DITURE (! TAXPAY] =! SAME BUSI;S4 7,SEE ! ,F$]AL ,C\RT ( ,APP1L'S DECI.N 9 ,SAMO? ,F9ANCIAL ,CORPOR,N ,LTD4 V4 ,! ,QUE51 #HF ,,DTC #FCCE1 7#AIHF7 #B ,C4,T4,C4 #AJG47 ,! MIRROR IMAGE TE/ IS "PICUL>LY SIGNIFICANT 9 DET]M9+ :E!R #G ,,IT-#CHF;,R B#C 4POSI;NS ( CU/OM] LI/S & L$G] A3.TS1 TRADEM>KS1 MILK QUOTAS & O!R GOV]N;T "RS1 & /OCK EX*ANGE S1TS & MEMB]%IPS1 W 2 3SID]$ 6BE 4POSI;NS ( ,,EC PROP]TY4 ,=A 4CUS.N ON :E!R A PAY;T = ^! & O!R TYPES ( 9TANGI# PROP]TY WD OR WD N QUALIFY Z AN ,,EC EXP5DITURE )9 ! PROVI.NS ( P>AGRAPH #AD7#E77B71 SEE ! CURR5T V].N ( ,,IT-#ADC1 ,M1N+ ( ,ELIGI# ,CAPITAL ,EXP5DITURE4 --------------------------------------#D #E4 ,ANY POR;N ( 3SID],N RCVD = ,,EC PROP]TY T IS DEP5D5T ^U ! USE ( OR PRODUC;N F T PROP]TY DOES N RESULT 9 AN ,,EC AM.T B R IS TAXA# Z 9COME "U P>AGRAPH #AB7#A77G7 7E4G41 SEE ! ,TAX ,C\RT ( ,CANADA'S DECI.N 9 #BHIJAH ,ONT>IO ,LIMIT$ ,V4 ,M4,N4,R1 #HG ,,DTC #CH1 7#AIHG7 #A ,C4,T4,C4 #BJIE74 ,9 S* A CASE1 ! -;TS 9 ! CURR5T V].N ( ,,IT-#DFB1 ,PAY;TS ,BAS$ ON ,PRODUC;N OR ,USE1 >E APPLICA#4 #H