Regarding the availability of the additional deduction under Reg. 1100(1)(c.1)(i) where a Class 14.1 property was acquired by a taxpayer after December 31, 2016 as a result of a distribution of the property on an s. 98(3) rollover basis, CRA stated:
[F[or taxation years ending before 2027, subparagraph 1100(1)(c.1)(i) allows a taxpayer to claim additional capital cost allowance of 2% on the portion of the undepreciated capital cost of Class 14.1 property at the beginning of January 1, 2017 that exceeds the total of the amounts described in clauses (A) and (B) of that subparagraph.
Consequently, a taxpayer is not eligible for the additional deduction provided for in subparagraph 1100(1)(c.1)(i) in respect of a property of Class 14.1 in Schedule II where that property is acquired by the taxpayer after December 31, 2016 as a result of a distribution of property for which subsection 98(3) of the Act applied. This conclusion also applies in the event that this distribution is followed by a transfer on a rollover basis pursuant to section 85