1138.2.1. The paid-up capital, for a taxation year, of a corporation that is an exempt corporation for the year, within the meaning of sections 771.12 and 771.13, shall be reduced by the amount determined by the formula
A × B × C.
In the formula in the first paragraph,(a) A is,i. if the corporation’s taxation year includes the first or last day of its eligibility period, within the meaning of section 771.1, or part of the year is excluded from that eligibility period because of the application of the fourth paragraph of section 771.1, the proportion that the number of days in the year included in that eligibility period is of the number of days in the year, and
ii. in any other case, 1;
(b) B isi. 75%, if the corporation is referred to in subparagraph iii of paragraph a of section 771.12 and any of the conditions mentioned in subparagraphs 1 and 2 of subparagraph i of subparagraph b of the second paragraph of section 771.8.5 is met in its respect, and
ii. 100%, in any other case; and
(c) C is the corporation’s paid-up capital for that year, computed before the application of this section.