• Use this schedule if you are a corporation claiming resource-related deductions.
• Complete the appropriate parts of this schedule and report any amounts you calculate on the corresponding lines of Schedule 1, Net Income (Loss) for
Income Tax Purposes:
line 340: Canadian development expenses from Part 5 of this schedule
line 341: Canadian exploration expenses from Part 4 of this schedule
line 342: Canadian oil and gas property expenses from Part 6 of this schedule
line 344: depletion from Part 3 of this schedule or
line 345: foreign exploration and development expenses from Part 7 of this schedule (line 345 includes specified foreign exploration and development
expenses from Part 8 of this schedule and foreign resource expenses from Part 9 of this schedule)
• All legislative references are to the federal Income Tax Act and Income Tax Regulations.
• The earned depletion base is defined in Regulation 1205(1), and the mining exploration depletion base is defined in Regulation 1203(2). You will find the
rules for claiming an earned depletion allowance in regulations 1201 and 1202(2) and a mining exploration depletion allowance in Regulation 1203(1).
• Expenses incurred by the corporation are referred to as "Regular expenses" and expenses incurred by the predecessor corporation that a successor
corporation is entitled to claim are referred to as "Successor expenses".
• Include a completed copy of this schedule with your T2 Corporation Income Tax Return. If you need more space, attach additional schedules.
Part 1 – Continuity of earned depletion base
Regular expenses
Successor expenses
Balance at end of previous tax year
101
126
105
130
Add: amount transferred on amalgamation or windup of subsidiary
(Note 1)
132
Add: amount transferred other than on amalgamation or windup of subsidiary
110
135
Deduct: amount transferred on sale of resource property to successor
Amount available
(Note 2)
A
B
140
Deduct: claim for the year under Regulation 1202(2)
115
Deduct: claim for the year under Regulation 1201
Closing balance
120
145
Note 1. The earned depletion base transferred on amalgamation or windup, to which subsections 87(1.2) and 88(1.5) apply, should be entered in the
"Regular expenses" column if the expenses were regular expenses in the hands of the amalgamating company or the subsidiary being wound up.
Note 2. If amount A is negative, enter "0" on lines 115 and 120. If amount B is negative, enter "0" on lines 140 and 145.
Part 2 – Continuity of mining exploration depletion base
• Use this schedule if you are a corporation claiming resource-related deductions.
• Complete the appropriate parts of this schedule and report any amounts you calculate on the corresponding lines of Schedule 1, Net Income (Loss) for
Income Tax Purposes:
line 340: Canadian development expenses from Part 5 of this schedule
line 341: Canadian exploration expenses from Part 4 of this schedule
line 342: Canadian oil and gas property expenses from Part 6 of this schedule
line 344: depletion from Part 3 of this schedule or
line 345: foreign exploration and development expenses from Part 7 of this schedule (line 345 includes specified foreign exploration and development
expenses from Part 8 of this schedule and foreign resource expenses from Part 9 of this schedule)
• All legislative references are to the federal Income Tax Act and Income Tax Regulations.
• The earned depletion base is defined in Regulation 1205(1), and the mining exploration depletion base is defined in Regulation 1203(2). You will find the
rules for claiming an earned depletion allowance in regulations 1201 and 1202(2) and a mining exploration depletion allowance in Regulation 1203(1).
• Expenses incurred by the corporation are referred to as "Regular expenses" and expenses incurred by the predecessor corporation that a successor
corporation is entitled to claim are referred to as "Successor expenses".
• Include a completed copy of this schedule with your T2 Corporation Income Tax Return. If you need more space, attach additional schedules.
Part 1 – Continuity of earned depletion base
Regular expenses
Successor expenses
Balance at end of previous tax year
101
126
105
130
Add: amount transferred on amalgamation or windup of subsidiary
(Note 1)
132
Add: amount transferred other than on amalgamation or windup of subsidiary
110
135
Deduct: amount transferred on sale of resource property to successor
Amount available
(Note 2)
A
B
140
Deduct: claim for the year under Regulation 1202(2)
115
Deduct: claim for the year under Regulation 1201
Closing balance
120
145
Note 1. The earned depletion base transferred on amalgamation or windup, to which subsections 87(1.2) and 88(1.5) apply, should be entered in the
"Regular expenses" column if the expenses were regular expenses in the hands of the amalgamating company or the subsidiary being wound up.
Note 2. If amount A is negative, enter "0" on lines 115 and 120. If amount B is negative, enter "0" on lines 140 and 145.
Part 2 – Continuity of mining exploration depletion base
Note 11. Canadian oil and gas property expenses transferred on amalgamation or windup, to which subsections 87(1.2) and 88(1.5) apply, should be
entered in the "Regular expenses" column if the expenses were regular expenses in the hands of the amalgamating company or the subsidiary
being wound up.
Note 12. (a) When there is no designation under subparagraph 66.7(4)(a)(iii) and amount K is negative, enter it on line 440 and enter "0" on
lines 495 and 499. If this results in amount J becoming negative, enter that amount on line 335 in Part 5, "Cumulative Canadian development
expenses," and enter "0" on lines 445 and 449.
When a designation under subparagraph 66.7(4)(a)(iii) has been made and amount K is negative, enter it on line 380 in Part 5, "Cumulative
Canadian development expenses," and enter "0" on lines 495 and 499. If amount F in Part 5 becomes negative, enter that amount on
line 440. If this results in amount J in Part 6 becoming negative, enter that amount on line 330 in Part 5.
(b) When amount J is negative due to other than (a) above, enter the amount on line 330 in Part 5 and enter "0" on lines 445 and 449.
Note 13. An accelerated Canadian oil and gas property expense is generally a Canadian oil and gas property expense incurred by the taxpayer after
November 20, 2018, and before 2028, subject to certain exceptions. See the T2 Corporation Income Tax Guide for more information.
Note 14. The maximum deduction is 10% of amount J plus 5% of amount N plus the lesser of:
– 10% of amount K, and
– the amount determined under paragraph 66.7(5)(b).
For a tax year of less than 51 weeks, 10% is prorated based on the number of days in the tax year divided by 365.
For a tax year of less than 51 weeks that ends after July 30, 2019, 10% and 5% are prorated based on the number of days in the tax year divided by
365.
Page 4 of 9
Clear Data
Protected B when completed
Part 7 – Foreign exploration and development expenses
Foreign exploration and development expenses are those incurred outside Canada in a tax year beginning before 2001. If the expenses are specified foreign
exploration and development expenses, complete Part 8.
Regular expenses
Successor expenses
500
550
Balance at end of previous tax year
Add: amount transferred on amalgamation or windup of subsidiary
(Note 15)
510
555
Add: amount transferred other than on amalgamation or windup of subsidiary
560
515
565
Deduct: other deductions or transfers
Amount available
(Note 16)
O
P
Deduct: current-year claim under subsections 66(4) and 66.7(2)
(Note 17)
520
570
525
575
Closing balance
Note 15. Foreign exploration and development expenses transferred on amalgamation or windup, to which subsections 87(1.2) and 88(1.5) apply,
should be entered in the "Regular expenses" column if the expenses were regular expenses in the hands of the amalgamating company or the
subsidiary being wound up.
Note 16. If amount O is negative, include it as income in the "Other additions" area on page 3 of Schedule 1 and enter "0" on lines 520 and 525.
If amount P is negative, include it as income in the "Other additions" area on page 3 of Schedule 1 and enter "0" on lines 570 and 575.
Note 17. The maximum deduction for regular expenses is the lesser of:
– amount O, and
– the greater of foreign-source resource income and 10% of amount O.
For a fiscal period of less than 51 weeks, 10% is prorated based on the number of days in the tax year divided by 365.
The maximum deduction for successor expenses is the lesser of:
– amount P, and
– foreign-source resource income attributable to successored properties.
Foreign-source resource income includes income from oil and gas wells or mines outside Canada and proceeds, less applicable
expenses and reserves on the disposition of foreign resource property.
Regular expenses
Successor expenses
530
580
Foreign-source resource income
7A
Claim for the year under subsection 66(4) for foreign exploration and development expenses (from line 520) . . . . . . . . . . . . . . . . . .
7B
Claim for the year under subsection 66.7(2) for foreign exploration and development expenses (from line 570) . . . . . . . . . . . . . . . . .
7C
Claim for the year under subsection 66(4) for specified foreign exploration and development expenses (amount Q from Part 8) . . . .
7D
Claim for the year under subsection 66.7(2) for specified foreign exploration and development expenses (amount R from Part 8) . .
7E
Claim for the year under subsection 66.21(4) (amount S from Part 9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7F
Claim for the year under subsection 66.7(2.3) (amount T from Part 9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7G
Foreign exploration and development expenses and cumulative foreign resources expenses (total of amounts 7A to 7F) . . . .
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