Subsection 66.2(1)
Administrative Policy
23 March 2018 External T.I. 2018-0739741E5 - Disposition of Freehold Mineral Rights in Canada
In response to a more general question, CRA constructed the following simple numerical example. Mr X (a resident individual) inherited the...
Subsection 66.2(2) - Deduction for cumulative Canadian development expenses
Administrative Policy
23 October 2012 External T.I. 2012-0463841E5 - Cumulative Canadian Development Expenses
In response to a question as to "whether a taxpayer who has disposed of all of its Canadian resource property may deduct any remaining balance in...
7 February 2005 External T.I. 2005-0111431E5 F - Death of a Taxpayer - Deduction of CCDE
By virtue of being a member of a partnership (SENC), Mr. X was allocated his share of Canadian development expense (CDE) incurred by a corporation...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 70 - Subsection 70(5.2) | no s. 70(5.2) deduction where CCDE balance arose “through” a partnership | 150 |
Subsection 66.2(5) - Definitions
Accelerated Canadian Development Expense
Paragraph (a)
Subparagraph (a)(ii)
Administrative Policy
6 June 2019 CPTS Roundtable, 2019-0816111C6
Does the exclusion from “accelerated Canadian development expense” (“Accelerated CDE”) for “a cost in respect of a Canadian resource...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 231.2 - Subsection 231.2(1) | taxpayers can choose between reasonable alternative formats (e.g. hard or soft) for providing their tax working papers/records | 140 |
| Tax Topics - Income Tax Regulations - Schedules - Schedule II - Class 29 | Folio S4-F15-C1 applies for purposes of the new accelerated CCA rules | 229 |
| Tax Topics - Income Tax Regulations - Regulation 1100 - Subsection 1100(2) | extension of M&P guidance to oil and gas sector | 61 |
| Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(b) - Capital Expenditure v. Expense - Oversight or Investment Management | project expenses incurred after determining economic feasibility and before project approval are generally deductible | 248 |
| Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(b) - Capital Expenditure v. Expense - Start-Up and Close-Down Expenditures | no acceptance that expenses incurred before decision to proceed are thereby on current account | 186 |
Canadian development expense
Administrative Policy
7 February 2018 External T.I. 2016-0637221E5 - Rollover of Mineral Rights
The Taxpayer, which is not in the business of exploration and development of mineral properties, wishes to transfer the Property (which may...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 85 - Subsection 85(1) - Paragraph 85(1)(a) | nil amount can be elected | 239 |
Paragraph (a)
Cases
St. Ives Resources Ltd. v. The Queen, 92 DTC 6223, [1992] 1 CTC 348 (FCTD), briefly aff'd 94 DTC 6261 (FCA)
The taxpayer purchased a Canadian resource property from another corporation for a purchase price of $3.5 million which it satisfied by the giving...
See Also
Leonard Pipeline Contractors Ltd. v. The Queen, 80 DTC 6236, [1980] CTC 305 (FCA)
Evidence was accepted to the effect "(a) that the term 'development' relates to the drilling of wells in a proven field and (b) that pipeline...
Administrative Policy
3 May 2021 External T.I. 2019-0831981E5 - CDE and Pre-Production Revenues
Can revenues earned while a mine is in the development phase and before the mine comes into production in reasonable commercial quantities...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 66.2 - Subsection 66.2(5) - Canadian development expense - Paragraph (c.2) | pre-production revenues cannot be netted against costs of bringing a new mine into production | 206 |
19 November 2012 External T.I. 2012-0459351E5 - Shale Gas Well Drilling Classification
A shale gas well will generally qualify under subparagraph (a)(ii) of the definition of "oil and gas well" in s. 248(1), and consequently expenses...
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|---|---|---|
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Scientific Research & Experimental Development | 43 |
Paragraph (b)
Administrative Policy
93 C.P.T.J. - Q.26
Where a well that originally was drilled in 1988 is re-entered in 1993 and drilling is completed to a deeper zone, but with no resulting...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 66 - Subsection 66(9) | 51 | |
| Tax Topics - Income Tax Act - Section 66.1 - Subsection 66.1(6) - Canadian exploration expense - Paragraph (d) | 71 |
Paragraph (c.2)
Administrative Policy
3 May 2021 External T.I. 2019-0831981E5 - CDE and Pre-Production Revenues
Can revenues earned while a mine is in the development phase and before the mine comes into production in reasonable commercial quantities...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 66.2 - Subsection 66.2(5) - Canadian development expense - Paragraph (a) | para. (a) does not contemplate netting pre-production revenues | 150 |
Articles
Emmanuel Sala, "Flow-Through Share Financing: Recent Developments, Traps and Tips", 2015 CTF Annual Conference paper
Reclassification of preproduction development expenses (pp. 10:8-9)
The reclassification of preproduction development expenses, historically...
Paragraph (e)
Administrative Policy
9 February 2022 Internal T.I. 2020-0873931I7 - Cover Letter - Mining Expenditure Review Table
Costs of mineral claims and exploration permits (both of which are Canadian resource properties) are CDE under para. (e).
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 66.1 - Subsection 66.1(6) - Canadian exploration expense - Paragraph (f) | listing of various qualifying (and non-qualifying) items | 409 |
| Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(b) - Capital Expenditure v. Expense - Current expense vs. capital acquisition | studies made before a decision to bring a mine into production are currently deductible | 117 |
2014 Ruling 2013-0505431R3 - XXXXXXXXXX
Existing structure
Pubco, a CBCA public corporation, and Subco, its wholly-owned CBCA corporation, are partners, along with GPCo (also...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 55 - Subsection 55(3) - Paragraph 55(3)(a) | public trading in dividend recipient does not engage exclusion in s. 55(2)(a)(iv) | 848 |
| Tax Topics - Income Tax Act - Section 88 - Subsection 88(1) | delay in filing articles of dissolution | 55 |
| Tax Topics - Income Tax Act - Section 97 - Subsection 97(2) | s. 97(2) applicable to contribution (no equity consideration) | 61 |
22 November 2011 External T.I. 2011-0420451E5 F - Canadian resource property
Corporation A entered into an option agreement with Corporation B under which it obtained the right to acquire the subject claims (representing...
Paragraph (f)
Administrative Policy
92 C.P.T.J. - Q.3
The election provisions of s. 66.2(5)(a)(iv) and s. 53(1)(e)(vii.1) were added to allow a taxpayer to have an option of capitalizing his share of...
cumulative Canadian development expense
Element F
See Also
DeLuca v. The Queen, 87 DTC 5202, [1987] 1 CTC 305 (FCTD), aff'd 91 DTC 5540 (FCA)
In 1969 the taxpayers agreed to transfer their coal licences in consideration for $200,000 and the covenant of the purchaser ("CNI") to pay...
Administrative Policy
15 May 2012 Canadian Petroleum Tax Roundtable, 2012-0446431C6 - 2012 CPTS: Farmout Arrangement
The questioner stated that in 9406335, CRA stated that it would not extend its position in IT-125R4, para. 14 respecting farm-out arrangments that...
23 March 2011 Internal T.I. 2010-0389081I7 F - Disposition of a resource property
The Vendor sold a percentage of its interest in unproven resource properties (the “Mining Properties”) in consideration for cash paid on...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 54 - Proceeds of Disposition - Paragraph (a) | proceeds included full (undiscounted) deferred cash proceeds, but might exclude share consideration (with volatile market price) until issued | 175 |
| Tax Topics - Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(g) | deferred share consideration potentially not recognized until issuance | 103 |
| Tax Topics - Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(b) | full undiscounted amount of future cash consideration to be included as an amount receivable | 209 |
Articles
Randy S. Morphy, Kim Maguire, "An Update on the Taxation of Farm-outs", Resource Sector Taxation, Vol. IX, No. 3, 2013, p. 661.
Need to rely on IT-125 (p. 661)
The application of the Income Tax Act to farm-outs on a technical basis remains unresolved: there are no specific...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 66 - Subsection 66(15) - Canadian Resource Property | 456 |