Section 66.2

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...

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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...

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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...

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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...

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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...

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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...

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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...

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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...

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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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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...

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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...

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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...

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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...

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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...

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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...

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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...

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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...

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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...

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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...

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