The CRA has generally held that a loan from a partnership to a partner will reduce the ACB of the partner’s partnership interest because of the “all-encompassing” language in subparagraph 53(2)(c)(v) of the Income Tax Act (Canada). The CRA has…
Partnerships and being a relative
How does the presence of a partnership in a structure affect the analysis of whether persons are related under section 251 of the Income Tax Act (Canada)? A partnership is not a person for the purposes of section 251 Where…
Partnership reorganizations
The general rule on the dissolution of a partnership is that all partnership property is disposed of at fair market value (s 98(2)). The Income Tax Act (Canada), however, contains a number of rules providing for a rollover. 85(3)—No bump…
LLP negative ACB
Since 2006, the partners of Ontario limited liability partnerships (LLPs) have enjoyed “full shield” protection, which means that they are protected from most liabilities of the partnership except those arising from their own professional negligence. As a result, an LLP…
Partnership negative ACB
In general, the negative ACB of an interest of a general partner does not trigger a capital gain at the end of a fiscal year. The negative ACB does not give rise to a capital gain until the partner disposes…
Partnership Losses
Natasha Reid and David Davies, “Tiered Partnership Losses” Tax for the Owner-Manager 16:2 (April 2016), comments on Green v R, 2016 TCC 10. The Tax Court chose not to follow a long-standing CRA position on tiered partnership losses. The CRA…
Partnership winding-up
Subsection 85(3) requires that a partnership be wound-up within 60 days after the disposition of property to a corporation under subsection 85(2). The CRA accepts that a partnership has been wound up even if the legal title to real property…
97(2) Abuse
The CRA says that forming a partnership consisting only of Canadian partners to take advantage of the 97(2) rollover and then immediately afterward adding a non-resident partner is abusive. It would attempt to apply the GAAR. (CTF Roundtable Q6).
Partnership information return
A posting to the LinkedIn group “CDN Tax Cases and Tax Commentary” a few days ago alerted me to a post on the CRA website, which post contained the following gem: In February 2012, the CRA issued a revised version…