(e.9) for the purpose of applying subparagraph 157(1)(b)(i) and the definition ``qualifying corporation'' in subsection 127.1(2) to any corporation (other than the subsidiary)
	(i) where the parent is associated with another corporation in a taxation year (in this paragraph referred to as the ``current year'') of the parent that begins after the parent received an asset of the subsidiary on the winding-up and ends in a calendar year,
	(A) the parent's taxable income for its last taxation year that ended in the preceding calendar year (determined before taking into consideration the specified future tax consequences for that last year) is deemed to be the total of
	(I) its taxable income for that last year (determined before applying this paragraph to the winding-up and before taking into consideration the specified future tax consequences for that last year), and
	(II) the total of the subsidiary's taxable incomes for its taxation years that ended in that preceding calendar year (determined without reference to subparagraph (iii) and before taking into consideration the specified future tax consequences for those years), and
	(B) the parent's business limit for that last year is deemed to be the total of
	(I) its business limit (determined before applying this paragraph to the winding-up) for that last year, and
	(II) the total of the subsidiary's business limits (determined without reference to subparagraph (iii)) for its taxation years that ended in that preceding calendar year,
	(ii) where the parent received an asset of the subsidiary on the winding-up before the current year and subparagraph (i) does not apply,
	(A) the parent's taxable income for its immediately preceding taxation year (determined before taking into consideration the specified future tax consequences for that preceding year) is deemed to be the total of
	(I) its taxable income for that preceding taxation year (determined before applying this paragraph to the winding-up and before taking into consideration the specified future tax consequences for that preceding taxation year), and
	(II) the total of the subsidiary's taxable incomes for the subsidiary's taxation years that end in the calendar year in which that preceding taxation year ended (determined before taking into consideration the specified future tax consequences for those years), and
	(B) the parent's business limit for that preceding taxation year is deemed to be the total of
	(I) its business limit (determined before applying this paragraph to the winding-up) for that preceding taxation year, and
	(II) the total of the subsidiary's business limits (determined without reference to subparagraph (iii)) for the subsidiary's taxation years that end in the calendar year in which that preceding taxation year ended, and
	(iii) where the parent and the subsidiary are associated with each other in the current year, the subsidiary's taxable income and the subsidiary's business limit for each taxation year that ends after the first time that the parent receives an asset of the subsidiary on the winding-up are deemed to be nil;
	(3) Subparagraph 88(1)(g)(i) of the Act is replaced by the following:
	(i) for the purposes of paragraphs 12(1)(d), (e), (e.1), (i) and (s) and 20(1)(l), (l.1), (p) and (jj) and 20(7)(c), subsection 20(22), sections 138, 138.1, 140, 142 and 148 and Part XII.3, the parent is deemed to be the same corporation as, and a continuation of, the subsidiary, and
	(4) Subsection (1) applies for the purpose of applying subsections 127(10.1) and (10.2) of the Act to taxation years that begin after 1995, except that, for taxation years that begin in 1996, the expression ``any corporation (other than the subsidiary)'' in paragraph 88(1)(e.8) of the Act, as enacted by subsection (1), shall be read as ``the parent''.
	(5) For windings-up that begin after May 23, 1985, paragraph 88(1)(e.8) of the Act shall be read without reference to the expression ``the definition ``qualifying corporation'' in subsection 127.1(2) and subparagraph 157(1)(b)(i)''.
	(6) Subsection (2) applies to windings-up that begin after May 23, 1985, except that
	(a) the expression ``any corporation (other than the subsidiary)'' in paragraph 88(1)(e.9) of the Act, as enacted by subsection (2), shall be read as ``the parent'' with respect to windings-up that begin before 1997;
	(b) for the purpose of applying that paragraph for the purpose of the definition ``qualifying corporation'' in subsection 127.1(2) of the Act, the business limits referred to in that paragraph, for taxation years that ended after June 1994 and began before 1996, shall be determined under section 125 of the Act as that section read in its application to taxation years that ended before July 1994; and
	(c) subparagraph 88(1)(e.9)(i) of the Act, as enacted by subsection (2), does not apply
	(i) for the purpose of applying the definition ``qualifying corporation'' in subsection 127.1(2) of the Act to taxation years that ended before July 1994, and
	(ii) for the purpose of applying subparagraph 157(1)(b)(i) of the Act to taxation years that end before 1998.
	(7) Subsection (3) applies to windings-up that begin after 1995.
	20. (1) The portion of subparagraph 94(1)(c)(i) of the Act before clause (A) is replaced by the following:
	(i) the trust is deemed for the purposes of this Part and sections 233.3 and 233.4 to be a person resident in Canada no part of whose taxable income is exempt because of section 149 from Part I tax and whose taxable income for the taxation year is the total of
	(2) The portion of paragraph 94(1)(d) of the Act before subparagraph (i) is replaced by the following:
	(d) in any other case, for the purposes of subsections 91(1) to (4) and sections 95 and 233.4,
	(3) Subsections (1) and (2) apply after 1995.
	21. (1) Paragraph 96(1)(d) of the Act is replaced by the following:
	(d) each income or loss of the partnership for a taxation year were computed as if this Act were read without reference to paragraphs 12(1)(z.5) and 20(1)(v.1), section 34.1 and subsections 66.1(1), 66.2(1) and 66.4(1) and as if no deduction were permitted under any of section 29 of the Income Tax Application Rules, subsections 34.2(4) and 65(1) and sections 66, 66.1, 66.2 and 66.4;
	(2) Subsection (1) applies to fiscal periods that begin after 1996.
	22. (1) The portion of paragraph 110.1(1)(a) of the Act after subparagraph (vii) is replaced by the following:
	not exceeding the amount determined by the formula
	0.5(A + B)
	where
	A is its income for the year computed without reference to subsection 137(2), and
	B is the total of all amounts each of which is the amount of a taxable capital gain from a gift of property made by it in the year to a donee described in this paragraph;
	(2) Subsection (1) applies to the 1996 and subsequent taxation years.
	23. (1) Subparagraph 115(1)(b)(ii.1) of the Act is replaced by the following:
	(ii.1) where the non-resident person is an insurer, any capital property that is its designated insurance property for the year,
	(2) Subsection (1) applies to the 1997 and subsequent taxation years.
	24. (1) Paragraph 117.1(1)(a) of the English version of the Act is amended by replacing the reference to ``paragraphs 118(1)(a) and (b)'' with ``paragraphs (a) and (b) of the description of B in subsection 118(1)''.
	(2) The portion of subsection 117.1(1) of the Act after paragraph (b) and before paragraph (c) is replaced by the following:
	shall be adjusted, for each taxation year after 1996 for amounts referred to in paragraph (d) of the description of B in subsection 118(1), for each taxation year after 1990 for amounts referred to in subsection 122.5(3) and for each taxation year after 1988 in any other case, so that the amount to be used under those provisions for the year is an amount equal to the total of
	(3) Subsection 117.1(2) of the English version of the Act is amended by replacing the reference to ``subparagraphs 118(1)(a)(ii) and (b)(iv)'' with ``subparagraphs (a)(ii) and (b)(iv) of the description of B in subsection 118(1)''.
	(4) Subsection (2) applies to the 1996 and subsequent taxation years.
	25. (1) The portion of subsection 118(1) of the French version of the Act before paragraph (a) is replaced by the following:
Crédits d'impôt personnels	118. (1) Le produit de la multiplication du total des montants visés aux alinéas a) à e) par le taux de base pour l'année est déductible dans le calcul de l'impôt payable par un particulier en vertu de la présente partie pour une année d'imposition :
	(2) The portion of paragraph (a) of the description of B in subsection 118(1) of the Act before subparagraph (i) is replaced by the following:
Married status	(a) in the case of an individual who at any time in the year is a married person who supports the individual's spouse and is not living separate and apart from the spouse by reason of a breakdown of their marriage, an amount equal to the total of
	(3) The portion of paragraph (b) of the description of B in subsection 118(1) of the Act before subparagraph (i) is replaced by the following:
Wholly dependent person	(b) in the case of an individual who does not claim a deduction for the year because of paragraph (a) and who, at any time in the year,
	(4) Subsection 118(1) of the English version of the Act is amended by striking out the word ``and'' at the end of paragraph (c) of the description of B.
	(5) The portion of paragraph (d) of the description of B in subsection 118(1) of the Act after subparagraph (ii) is replaced by the following:
	the amount determined by the formula
	$6,456 - E
	where
	E is the greater of $4,103 and the income for the year of the dependant, and
	(6) The description of B in subsection 118(1) of the Act is amended by adding the following after paragraph (d):
Infirm dependant	(e) in the case of an individual entitled to a deduction in respect of a person because of paragraph (b) and who would also be entitled, but for paragraph (4)(c), to a deduction because of paragraph (d) in respect of the same person, the amount by which the amount that would be determined under paragraph (d) in respect of the person exceeds the amount determined under paragraph (b) in respect of the person.
	(7) Subsection 118(4) of the English version of the Act is amended by
	(a) replacing the reference in paragraph (a) to ``by reason of paragraphs (1)(a) and (b)'' with ``because of paragraphs (a) and (b) of the description of B in subsection (1)'';
	(b) replacing the references in paragraphs (b) and (c) to ``by reason of paragraph (1)(b)'' with ``because of paragraph (b) of the description of B in subsection (1)''; and
	(c) replacing the reference in paragraph (e) to ``by reason of paragraph (1)(d)'' with ``because of paragraph (d) of the description of B in subsection (1)''.
	(8) Subsection 118(5) of the Act is replaced by the following:
Support	(5) No amount may be deducted under subsection (1) in computing an individual's tax payable under this Part for a taxation year in respect of a person where the individual is required to pay a support amount (as defined in subsection 56.1(4)) to the individual's spouse or former spouse in respect of the person and the individual
	(a) lives separate and apart from the spouse or former spouse throughout the year because of the breakdown of their marriage; or
	(b) claims a deduction for the year because of section 60 in respect of a support amount paid to the spouse or former spouse.
	(9) The portion of subsection 118(6) of the Act before paragraph (a) is replaced by the following:
Definition of dependant	(6) For the purposes of paragraphs (d) and (e) of the description of B in subsection (1) and paragraph (4)(e), ``dependant'' of an individual for a taxation year means a person who at any time in the year is dependent on the individual for support and is
	(10) Subsections (1), (4), (5), (6) and (9) apply to the 1996 and subsequent taxation years.
	(11) Subsections (2), (3) and (8) apply to the 1997 and subsequent taxation years.
	26. (1) Paragraph (a) of the definition ``total gifts'' in subsection 118.1(1) of the Act is replaced by the following:
	(a) the least of
	(i) the individual's total charitable gifts for the year,
	(ii) the individual's income for the year where the individual dies in the year or in the following taxation year, and
	(iii) in any other case, the amount determined by the formula
	0.5(A + B - C)
	where