(b) where the transferee is a partnership, the total of all amounts each of which is the tax payable under this Act by a person for a taxation year
	(i) that begins or ends in that period, and
	(ii) that includes the end of a fiscal period of the partnership during which the person was a member of the partnership; and
	(c) interest and penalties in respect of such taxes.
Joint liability	(11) Where taxes, interest and penalties are payable under this Act by a person for a taxation year and those taxes, interest and penalties are payable by a debtor because of subsection (10), the debtor and the person are jointly and severally liable to pay those amounts.
Assessments in respect of liability	(12) Where a debtor and an eligible transferee file an agreement between them under this section in respect of an obligation issued by the debtor that was settled at a particular time,
	(a) where the debtor is an individual or a corporation, the Minister may at any subsequent time assess the debtor in respect of taxes, interest and penalties for which the debtor is liable because of subsection (10); and
	(b) where the debtor is a partnership, the Minister may at any subsequent time assess any person who has been a member of the partnership in respect of taxes, interest and penalties for which the partnership is liable because of subsection (10), to the extent that those amounts relate to taxation years of the transferee (or, where the transferee is another partnership, members of the other partnership) that end at or after
	(i) where the person was not a member of the partnership at the particular time, the first subsequent time the person becomes a member of the partnership, and
	(ii) in any other case, the particular time.
Application of Division I	(13) The provisions of Division I apply to an assessment under subsection (12) as though it had been made under section 152.
Partnership members	(14) For the purposes of paragraphs (10)(b) and (12)(b) and this subsection, where at any time a member of a particular partnership is another partnership, each member of the other partnership shall be deemed to be a member of the particular partnership at that time.
	(2) Sections 80 to 80.04 of the Act, as enacted by subsection (1), apply to taxation years that end after February 21, 1994, except that
	(a) subsection (1) does not, other than for the purposes of subsections 6(15) and (15.1) and 15(1.2) and (1.21) and section 79 of the Act, apply to any obligation settled or extinguished
	(i) before February 22, 1994,
	(ii) after February 21, 1994
	(A) under the terms of an agreement in writing entered into on or before that date, or
	(B) under the terms of any amendment to such an agreement, where that amendment was entered into in writing before July 12, 1994 and the amount of the settlement or extinguishment was not substantially greater than the settlement or extinguishment provided under the terms of the agreement,
	(iii) before 1996 pursuant to a restructuring of debt in connection with a proceeding commenced in a court in Canada before February 22, 1994,
	(iv) before 1996 in connection with a proposal (or notice of intention to make a proposal) that was filed under the Bankruptcy and Insolvency Act, or similar legislation of a country other than Canada, before February 22, 1994, or
	(v) before 1996 in connection with a written offer that was made by, or communicated to, the holder of the obligation before February 22, 1994;
	(b) in its application with respect to interest accruing before July 14, 1990, the words ``was deductible'' in paragraph 80(2)(b) of the Act, as enacted by subsection (1), shall be read as ``was deducted''; and
	(c) a form referred to in section 80 or subsection 80.03(7) or 80.04(6) of the Act, as enacted by subsection (1), shall be deemed to have been filed on a timely basis if it is filed with the Minister of National Revenue before 1996.
	28. (1) The portion of paragraph 85(4)(b) of the Act before subparagraph (i) is replaced by the following:
	(b) except where the property so disposed of was, immediately after the disposition, an obligation that was payable to the corporation by another corporation that is related to the corporation or by a corporation or a partnership that would be related to the corporation if paragraph 80(2)(j) applied for the purpose of this paragraph, in computing the adjusted cost base to the taxpayer of all shares of any particular class of the capital stock of the corporation owned by the taxpayer immediately after the disposition, there shall be added that proportion of the amount, if any, by which
	(2) Subsection (1) applies to property disposed of after July 12, 1994, other than property disposed of pursuant to an agreement in writing entered into before July 13, 1994.
	29. (1) Section 86 of the Act is amended by adding the following after subsection (3):
Computation of adjusted cost base	(4) Where a taxpayer has disposed of old shares in circumstances described in subsection (1),
	(a) there shall be deducted after the disposition in computing the adjusted cost base to the taxpayer of each new share the amount determined by the formula
	A x B C
	where
	A is the amount, if any, by which
	(i) the total of all amounts deducted under paragraph 53(2)(g.1) in computing the adjusted cost base to the taxpayer of the old shares immediately before the disposition
	exceeds
	(ii) the amount that would be the taxpayer's capital gain for the taxation year that includes the time of the disposition from the disposition of the old shares if paragraph 40(1)(a) were read without reference to subparagraph (iii) of that paragraph,
	B is the fair market value of the new share at the time it was acquired by the taxpayer in consideration for the disposition of the old shares, and
	C is the total of all amounts each of which is the fair market value of a new share at the time it was acquired by the taxpayer in consideration for the disposition of the old shares; and
	(b) the amount determined under paragraph (a) in respect of the acquisition shall be added in computing the adjusted cost base to the taxpayer of the new share after the disposition.
	(2) Subsection (1) applies to taxation years that end after February 21, 1994.
	30. (1) Subsection 87(2) of the Act is amended by adding the following after paragraph (h):
Debts	(h.1) for the purposes of section 61.4, the description of F in subsection 79(3), the definition ``forgiven amount'' in subsection 80(1), subsection 80.03(7) and section 80.04, the new corporation shall be deemed to be the same corporation as, and a continuation of, each predecessor corporation;
	(2) Subsection 87(2) of the Act is amended by adding the following after paragraph (l.2):
Forgiven amount	(l.21) for the purposes of section 61.3 and subsection 80.01(10), the new corporation shall be deemed to be the same corporation as, and a continuation of, each predecessor corporation;
	(3) Section 87 of the Act is amended by adding the following after subsection (5):
Adjusted cost base of option	(5.1) Where the cost to a taxpayer of a new option is determined at any time under subsection (5),
	(a) there shall be deducted after that time in computing the adjusted cost base to the taxpayer of the new option the total of all amounts deducted under paragraph 53(2)(g.1) in computing, immediately before that time, the adjusted cost base to the taxpayer of the old option; and
	(b) the amount determined under paragraph (a) shall be added after that time in computing the adjusted cost base to the taxpayer of the new option.
	(4) Section 87 of the Act is amended by adding the following after subsection (6):
Adjusted cost base	(6.1) Where the cost to a taxpayer of a particular property that is a bond, debenture or note is determined at any time under subsection (6) and the terms of the bond, debenture or note conferred upon the holder the right to exchange that bond, debenture or note for shares,
	(a) there shall be deducted after that time in computing the adjusted cost base to the taxpayer of the bond, debenture or note the total of all amounts deducted under paragraph 53(2)(g.1) in computing, immediately before that time, the adjusted cost base to the taxpayer of the property for which the particular property was exchanged at that time; and
	(b) the amount determined under paragraph (a) in respect of the particular property shall be added after that time in computing the adjusted cost base to the taxpayer of the particular property.
	(5) Subsections (1) to (4) apply to taxation years that end after February 21, 1994.
	31. (1) Clause 88(1)(c)(ii)(B) of the Act is replaced by the following:
	(B) any reduction of the cost amount to the subsidiary of the property made because of section 80 on the winding-up,
	(2) Subsection (1) applies to windings-up that begin after July 13, 1990.
	32. (1) The formula in the definition ``foreign accrual property income'' in subsection 95(1) of the Act is replaced by the following:
	(A + A.1 + A.2 + B + C) - (D + E + F + G)
	(2) The definition ``foreign accrual property income'' in subsection 95(1) of the Act is amended by adding the following after the description of A:
	A.1 is 4/3 of the total of all amounts included in computing the affiliate's income from property or businesses (other than active businesses) for the year because of subsection 80(13),
	A.2 is the amount determined for G in respect of the affiliate for the preceding taxation year,
	(3) The definition ``foreign accrual property income'' in subsection 95(1) of the Act is amended by striking out the word ``and'' at the end of the description of E, by adding the word ``and'' at the end of the description of F and by adding the following after the description of F:
	G is the amount, if any, by which
	(a) the total of amounts determined for A.1 and A.2 in respect of the affiliate for the year
	exceeds
	(b) the total of all amounts determined for D to F in respect of the affiliate for the year;
	(4) Subsection 95(2) of the Act is amended by adding the following after paragraph (g):
	(g.1) in computing the foreign accrual property income of a foreign affiliate of a taxpayer the Act shall be read
	(i) as if the expression ``income, taxable income or taxable income earned in Canada, as the case may be'' in the definition ``commercial debt obligation'' in subsection 80(1) were read as ``foreign accrual property income (within the meaning assigned by subsection 95(1))'', and
	(ii) without reference to subsections 80(3) to (12), (15) and (17) and 80.01(5) to (11) and sections 80.02 to 80.04;
	(5) Subsections (1) to (4) apply to taxation years that end after February 21, 1994.
	33. (1) Subsection 96(3) of the Act is replaced by the following:
Agreement or election of partnership members	(3) Where a taxpayer who was a member of a partnership during a fiscal period has, for any purpose relevant to the computation of the taxpayer's income from the partnership for the fiscal period, made or executed an agreement, a designation or an election under or in respect of the application of any of subsections 13(4), (15) and (16), 14(6), 20(9) and 21(1) to (4), section 22, subsection 29(1), section 34, clause 37(8)(a)(ii)(B), subsections 44(1) and (6), 50(1) and 80(5), (9), (10) and (11), section 80.04 and subsection 97(2) that, but for this subsection, would be a valid agreement, designation or election,
	(a) the agreement, designation or election is not valid unless
	(i) it was made or executed on behalf of the taxpayer and each other person who was a member of the partnership during the fiscal period, and
	(ii) the taxpayer had authority to act for the partnership;
	(b) unless the agreement, designation or election is invalid because of paragraph (a), each other person who was a member of the partnership during the fiscal period shall be deemed to have made or executed the agreement, designation or election; and
	(c) notwithstanding paragraph (a), any agreement, designation or election deemed by paragraph (b) to have been made or executed by any person shall be deemed to be a valid agreement, designation or election made or executed by that person.
	(2) Subsection (1) applies to fiscal periods that end after February 21, 1994.
	34. (1) The portion of paragraph 97(3)(b) of the Act before subparagraph (i) is replaced by the following:
	(b) except where the property so disposed of was, immediately after the disposition, an obligation that was payable to the partnership by a corporation that is related to the taxpayer or by a corporation or partnership that would be related to the taxpayer if paragraph 80(2)(j) applied for the purposes of this paragraph, in computing at any time after the disposition the adjusted cost base to the taxpayer of the taxpayer's interest in the partnership immediately after the disposition, there shall be added the amount, if any, by which
	(2) Subsection (1) applies to property disposed of after July 12, 1994, other than property disposed of pursuant to an agreement in writing entered into before July 13, 1994.
	35. (1) Paragraph 107(1)(a) of the Act is replaced by the following:
	(a) where the trust is a personal trust or a prescribed trust, for the purpose of computing the taxpayer's taxable capital gain, if any, from the disposition, the adjusted cost base to the taxpayer of the interest, or the part of the interest, as the case may be, immediately before the disposition shall be deemed to be the greater of
	(i) its adjusted cost base, otherwise determined, to the taxpayer immediately before the disposition, and
	(ii) the amount, if any, by which
	(A) its cost amount to the taxpayer immediately before the disposition
	exceeds
	(B) the total of all amounts deducted under paragraph 53(2)(g.1) in computing its adjusted cost base to the taxpayer immediately before the disposition;
	(2) Subsection (1) applies to taxation years that end after February 21, 1994.
	36. (1) The formula in the definition ``farm loss'' in subsection 111(8) of the Act is replaced by the following:
	A - B - C
	(2) The definition ``farm loss'' in subsection 111(8) of the Act is amended by striking out the word ``and'' at the end of the description of A, by adding the word ``and'' at the end of the description of B and by adding the following after the description of B: