16.17. Where a share of the capital stock of an operator is issued to a partnership under an agreement in writing entered into between the partnership and the operator under which the operator has agreed to incur expenses referred to in subparagraph a of subparagraph 1 of the second paragraph of any of sections 16.9, 16.11 and 16.13, and to renounce, under the Taxation Act (chapter I-3) or the Income Tax Act (R.S.C. 1985, c. 1, (5th Suppl.)), in favour of the partnership, an amount that does not exceed the consideration received by the operator for the share, relating to expenses so incurred by the operator, the expenses which relate to the amount or part of the amount that has been renounced and which the partnership attributes to each partner are deemed, from the day on which they are incurred, never to have been such expenses incurred by the operator.
The first paragraph does not apply to the part of the expenses which relates to the amount attributed by the partnership to a partner that is a legal person if the legal person gives an undertaking in writing to the Minister not to renounce, under the Taxation Act or the Income Tax Act, that part of the expenses and the legal person fulfills that undertaking.