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

              ,9COME ,TAX
          ,9T]PRET,N ,BULLET9
    
,SUBJECT3 ,,9COME ,,TAX ,,ACT
  ,L1S+ ,PROP]TY--,CAPITAL ,CO/ ,ALL[.E
  ,RE/RIC;NS
,NUMB]3 ,,IT-#DDC
,DATE3 ,M>* #AD1 #AIHJ
,REF];E3 ,REGUL,N #AAJJ7#AE7 7&
  ,REGUL,NS #AAJJ7#AF7 TO 7#BJ7 &
  #AAJA7#E;C77

#A4 ,REGUL,N #AAJJ7#AE7 LIMITS ! AM.T (
  CAPITAL CO/ ALL[.E 7,,CCA7 T C 2
  CLAIM$ ON L1S+ PROP]TY [N$ 0A TAXPAY]1
  O!R ?AN A TAXPAY] DESCRIB$ 9 #H 2L1 S
  Z 6PREV5T HM F CR1T+ OR 9CR1S+ A LOSS
  6%ELT] NON-L1S+ 9COME4 ,ANY -;T 9 ?
  BULLET9 ) REF];E 6L1S+ PROP]TY (A
  TAXPAY] AL APPLIES 6L1S+ PROP]TY (A
  "PN]%IP4
                                      #A
             ,L1S+ ,PROP]TY          A#A
    
#B4 ,! T]M 8L1S+ PROP]TY0 IS DEF9$ 9
  ,REGUL,N #AAJJ7#AG74 ,C]TA9 PROP]TIES
  -;T$ ON 9 P>AGRAPHS #AA 6#AE 2L >E
  SPECIFIC,Y EXCLUD$ F ! DEF9I;N ( L1S+
  PROP]TY4 ,L1S+ PROP]TY (A TAXPAY] IS
  DEPRECIA# PROP]TY (A PRESCRIB$ CLASS
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  7A7 R5TAL PROP]TY Z DEF9$ 9 ,REGUL,N
    #AAJJ7#AD7 7,SEE AL ,,IT-#AIE;,R#B71
  7B7 MULTIPLE-UNIT RESID5TIAL BUILD+S (
    CLASS #CA OR #CB & FURNITURE1
    FIXTURES OR EQUIP;T LOCAT$ )9 &
    ANCILL>Y 6!M1 OR
  7C7 CLASS #AB7N7 PROP]TY1 E4G4 A
    C]TIFI$ F1TURE FILM4
  ,! DEPRECIA# PROP]TY M/ 2 US$ PR9CIP,Y
  =! PURPOSE ( GA9+ OR PRODUC+ GROSS
  REV5UE T IS R5T1 ROYALTY OR L1S+
  REV5UE4 ,L1S+ PROP]TY DOES N 9CLUDE A
  PROP]TY L1S$ 9 ! ORD9>Y C\RSE ( SELL+
  GDS OR R5D]+ S]VICES "U AN AGREE;T 0:
  ! LESSEE "UTAKES 6USE ! PROP]TY 6C>RY
  ON ! BUSI;S ( SELL+ OR PROMOT+ !    #B
               ,,IT-#DDC             B#A
  SALE (! TAXPAY]'S GDS OR S]VICES 7E4G4
  4PLAY EQUIP;T L1S$ 0A MANUFACTUR] 6A
  D1L] = PROMOT+ ! SALE (! MANUFACTUR]'S
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#C4 ,! ^W 8PR9CIP,Y0 9 ! DEF9I;N ( L1S+
  PROP]TY 9 ,REGUL,N #AAJJ7#AG7 M1NS
  8PRIM>ILY0 OR 8*IEFLY04 ,9 E/ABLI%+
  :E!R A DEPRECIA# PROP]TY IS US$
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  #EJ@3P (! "T =! PURPOSE ( GA9+ OR
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  PR9CIP,Y = T PURPOSE4 ,S* REV5UE
  9CLUDES *>T] FEES & O!R REV5UE =! USE
  (A VESSEL L1S$ 6AN OP]ATOR ON A 8B>E-
  BOAT0 BASIS4





                                      #C
            ,SEP>ATE ,CLASS          C#A
    
#D4 ,L1S+ PROP]TIES : WD O!RWISE 2
  DESCRIB$ 9 ! SAME CLASS Z NON-L1S+
  PROP]TIES >E REQUIR$ 6BE 9CLUD$ 9 A
  SEP>ATE CLASS 0VIRTUE ( ,REGUL,N
  #AAJA7#E;C74 ,REGUL,N #AAJA7#E;C7 DOES
  N APPLY H["E 6L1S+ PROP]TY (A TAXPAY]
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  #AAJJ7#AF7 >E MET "?\T "O YE> B N 9
  ANO!R YE> X W 2 NEC 6TRANSF] ! L1S+
  PROP]TY 96OR \ (! SEP>ATE CLASS4
--------------------------------------#B
#E4 ,! RE/RIC;N 9 ,REGUL,N #AAJJ7#AE7
  DOES N APPLY 69DIVIDUAL CLASSES ( L1S+
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  CLASS1 B 6! TOTAL ,,CCA T MAY 2 CLAIM$
  AG/ ALL ! L1S+ PROP]TIES4 ,9 DET]M9+ !
  MAXIMUM ,,CCA T MAY 2 CLAIM$ ON L1S+
  PROP]TIES1 ! TAXPAY] IS REQUIR$ 6-PUTE
  SEP>ATELY ! A7REGATE ( 8 9COME &!
  A7REGATE ( 8 LOSSES =! YE> F R5T+1
  L1S+ OR E>N+ ROYALTIES F L1S+
  PROP]TIES & PROP]TIES T WD 2 L1S+   #D
               ,,IT-#DDC             A#B
  PROP]TIES & PROP]TIES 7 X N =
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  A7REGATES >E -PUT$ )\T REG>D 6P>AGRAPH
  #BJ7#A77A7 S T ANY RECAPTURE ( ,,CCA F
  S* PROP]TIES IS 9CLUD$ B T]M9AL LOSSES
  >E EXCLUD$4 ,! MAXIMUM ,,CCA T MAY 2
  CLAIM$ ON ALL ! L1S+ PROP]TIES _C
  EXCE$ ! AM.T 0: ! A7REGATE ( S* 9COME
  EXCE$S ! A7REGATE ( S* LOSSES4
#F4 ,A "PN]%IP T IS SUBJECT 6! PROVI.NS
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  RULES & ALLOCATES ! RESULT+ NET L1S+
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  "PN]S AL HOLDS L1S+ PROP]TY Z A
  PROPRIETOR1 ! ,,CCA LIMIT,N W APPLY 9
  A SIMIL> WAY 6HIS [N L1S+ PROP]TY4 ,8
  TOTAL 9COME OR LOSS 7AF EXP5SES B 2F
  ,,CCA7 ON 8 [N L1S+ PROP]TY W 2 -B9$ )
  8 %>E ( "PN]%IP L1S+ 9COME OR LOSS4 ,!
  "PN] MAY !N CLAIM ,,CCA ON 8 [N L1S+
  PROP]TIES 6! EXT5T (! 8-B9$0 L1S+
  9COME 7NET ( LOSSES71 IF ANY4
                                      #E
               ,,IT-#DDC             B#B
#G4 ,": A TAXPAY] ACQUIRES A R5TAL
  PROP]TY Z DEF9$ 9 ,REGUL,N #AAJJ7#AD7
  & L1S+ PROP]TY T IS LOCAT$ )9 OR IS
  ANCILL>Y 6! R5TAL PROP]TY 7E4G4
  FURNITURE & FIXTURES OR APPLI.ES 9
  UNITS (A R5TAL PROP]TY7 = PURPOSES (
  CALCULAT+ ! AM.T ( ,,CCA LIMIT,NS "U
  ,REGUL,NS #AAJJ7#AE7 & 7#AA71 AN
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  7A7 "! >E SEP>ATE & SIGNIFICANT R5TAL
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  7B7 ! R5T *>G$ 6T5ANTS US+ ! L1S+
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  7C7 ! CAPITAL CO/ (! L1S+ PROP]TY IS
    SIGNIFICANT 9 REL,N 6! CAPITAL CO/
    (! R5TAL PROP]TY4
  ,G5],Y AN ALLOC,N ( 9COME IS N NEC =A
  T5ANT'S USE ( KIT*5 APPLI.ES 9CLUD$ 9
  ALL UNITS (A R5TAL PROP]TY1 O!R
  APPLI.ES OR FACILITIES PROVID$ =! -MON
  USE ( ALL T5ANTS1 OR 9DOOR OR       #F
               ,,IT-#DDC             C#B
  \TDOOR P>K+ >1S4 ,": A FLAT AM.T IS
  *>G$ =! USE ( R5TAL PROP]TY & L1S+
  PROP]TY -B9$1 & NO ALLOC,N ( 9COME IS
  3SID]$ NEC1 ,,CCA MAY 2 CLAIM$ 9
  RESPECT ( EI OR BO? PROP]TIES PROVID$
  ! A7REGATE ,,CCA CLAIM$ DOES N EXCE$ !
  -B9$ R5TAL & L1S+ 9COME4

           ,PR9CIPAL ,BUSI;S
    
#H4 ,REGUL,N #AAJJ7#AE7 DOES N APPLY1
  0VIRTUE ( ,REGUL,N #AAJJ7#AF71 6C]TA9
  CORPOR,NS ^: PR9CIPAL BUSI;SES >E R5T+
  OR L1S+ ( L1S+ PROP]TY 9CLUD+ PROP]TY
  T WD 2 L1S+ PROP]TY 7 X N EXCLUD$ "U
  ,REGUL,NS #AAJJ7#AH71 7#AI7 OR 7#BJ71
  OR ! R5T+ OR L1S+ ( S* PROP]TY -B9$ )!
  SALE & S]VICE ( PROP]TY (! SAME G5]AL
  TYPE & DESCRIP;N4 ,S* A CORPOR,N W
  QUALIFY = EXCLU.N IF XS GROSS REV5UE
  =! YE> F S* A PR9CIPAL BUSI;S 0 N LESS
  ?AN #IJ@3P ( XS GROSS REV5UE F ALL
  S\RCES4 ,! ABV AL APPLIES 6A "PN]%IP
  EA* MEMB] ( : 0 A CORPOR,N1         #G
               ,,IT-#DDC             D#B
  PROVID$ EA* S* "PN] C MEET ! ABV
  CRIT]IA4 ,9T]PRET,N ,BULLET9 ,,IT-#CGA
  PROVIDES "S -;TS ON ! M1N+ ( PR9CIPAL
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  RESPECT ( : X CLAIMS 6BE EXEMPT$ F !
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  DUR+ "P ( T YE>4
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  SUBSEC;N #BDH7#A74 ,! ,DE"P;T 3SID]S T
  = PURPOSES ( ,REGUL,N #AAJJ7#AF77A7
  8GROSS REV5UE0 F ! PR9CIPAL BUSI;S
  REF]R$ 6"!9 9CLUDES3
  7A7 GROSS REV5UE F R5T+ OR L1S+ (
    PROP]TY DESCRIB$ 9 T ,REGUL,N OR F !
    S]VIC+ ( PROP]TY (! SAME G5]AL TYPE
    & DESCRIP;N Z WELL Z ROYALTY 9COME F
    ALL S* PROP]TY2
--------------------------------------#C
  7B7 PROCE$S F ! SALE ( PROP]TY
    DESCRIB$ 9 T ,REGUL,N OR          #H
               ,,IT-#DDC             A#C
    PROP]TY (! SAME G5]AL TYPE &
    DESCRIP;N2
  7C7 9T]E/ & O!R F9ANC+ *>GES 9CID5TAL
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    BUSI;S1 & E>N$ 9 ! C\RSE ( SELL+ OR
    L1S+ PROP]TY4
  ,= PURPOSES (! GROSS REV5UE TE/ (A
  CORPOR,N ": ! CORPOR,N HAS AN 9T]E/ 9
  A "PN]%IP1 X IS 3SID]$ T ! GROSS
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  FL[S "? 6! GROSS REV5UE (! CORPOR,N4
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  "PICUL> S\RCE W 2 9CLUD$ 9 ! GROSS
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  (! PR(IT %>+ RATIO4

   ,PROP]TY EXCLUD$ F ,L1S+ ,PROP]TY
    
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  IS EXCLUD$ F L1S+ PROP]TY4 ,REGUL,N
  #AAJJ7#AH7 PROVIDES ! TRANSI;NAL    #I
               ,,IT-#DDC             B#C
  RULES S9CE ! 3CEPT ( L1S+ PROP]TY &
  ,,CCA LIMIT,N "!ON 2CAME LAW ON ,MAY
  #BF1 #AIGF4 ,X %D 2 NOT$ T ,REGUL,N
  #AAJJ7#AH7 DOES N APPLY1 H["E1
  6PROP]TY ACQUIR$ AF ,MAY #BE1 #AIGF T
  IS AN A4I;N OR IMPROVE;T 6PROP]TY
  EXCLUD$ F L1S+ PROP]TY 0VIRTUE (
  ,REGUL,N #AAJJ7#AH71 S T ! A4I;N XF
  MAY 2 L1S+ PROP]TY4
#AB4 ,REGUL,NS #AAJJ7#AI7 & 7#BJ7 DEEM
  DEPRECIA# PROP]TY ACQUIR$ AF ,MAY #BE1
  #AIGF : WD O!RWISE 2 L1S+ PROP]TY N
  6BE L1S+ PROP]TY "U C]TA9 3DI;NS4
  ,REGUL,N #AAJJ7#AI7 DEEMS PROP]TY N
  6BE L1S+ PROP]TY IF ! PROP]TY 0
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  7A7 PROP]TY 4POS$ ( 6A ,CANADIAN
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  7B7 PROP]TY TRANSF]R$ "U SUBSEC;N
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    7SEE ,9T]PRET,N ,BULLET9         #AJ
               ,,IT-#DDC             C#C
    ,,IT-#DAC 5TITL$ 8,"PN]%IP Z
    8,P]SON0 OR 8,TAXPAY]0 = SUBSEC;N
    #IG7#B707 OR PROP]TY 4TRIBUT$ "U
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  7C7 PROP]TY ACQUIR$ 0AMALGAM,N "U
    SEC;N #HG2 OR
  7D7 PROP]TY ACQUIR$ "U SUBSEC;N
    #HH7#A7 0A ,CANADIAN CORPOR,N ON !
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    #AAJJ7#AH7 OR 7#BJ71 N A L1S+
    PROP]TY (! V5DOR4
#AC4 ,REGUL,N #AAJJ7#BJ7 DEEMS PROP]TY N
  6BE L1S+ PROP]TY IF X IS A 8REPLACE;T
  PROP]TY0 = PROP]TY T IS LO/1 DE/ROY$
  OR EXPROPRIAT$ OR T 0 A =M] BUSI;S
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  #AC7#D77A7 & 7B7 (! ,ACT &! PROP]TY
  REPLAC$ WAS1 0VIRTUE ( ,REGUL,N
  #AAJJ7#AH7 OR 7#AI71 N A L1S+ PROP]TY4
#AD4 ,TE*NIC,Y ! EXEMP;NS PROVID$ = 9
  ,REGUL,NS #AAJJ7#AI7 & 7#BJ7 >E    #AA
               ,,IT-#DDC             D#C
  LIMIT$ 6A F/ 8ROLLOV]0 &A F/ ACQUISI;N
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  ,REGUL,NS #AAJJ7#AI7 & 7#BJ7 6A SECOND
  & SUBSEQU5T 8ROLLOV]0 OR SECOND &
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  PROP]TY0 PROVID$ ALL O!R REQUIRE;TS >E
  MET4
#AE4 ,": PROP]TY 0 EXCLUD$ F L1S+
  PROP]TY 0VIRTUE ( ,REGUL,N #AAJJ7#AH71
  X IS ! ,DE"P;T'S VIEW T ,REGUL,N
  #AAJJ7#AI7 CD APPLY :E!R OR N !
  PROP]TY MEETS ! CRIT]IA (A L1S+
  PROP]TY "U ,REGUL,N #AAJJ7#AG74 ,=
  EXAMPLE1 ": PROP]TY ACQUIR$ PRIOR
  6,MAY #BF1 #AIGF & N US$ PR9CIP,Y =!
  PURPOSE ( PRODUC+ L1S+ REV5UE IS LAT]
  4POS$ ( 6A ,CANADIAN CORPOR,N "U
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  PURPOSE ( PRODUC+ L1S+ REV5UE1 !
  PROP]TY W N 2COME L1S+ PROP]TY 6!
  ,CANADIAN CORPOR,N 0VIRTUE ( ,REGUL,N
  #AAJJ7#AI74                        #AB