Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
960435
XXXXXXXXXX Cal Brown
(613) 957-8980
Attention: XXXXXXXXXX
October 9, 1996
Dear Sirs:
Re: Subsection 34.2(3) of the Income Tax Act (the "Act")
This is in reply to your letter of January 26, 1996 concerning subsection 34.2(3) of the Act. We apologize for the delay in replying to your request.
Your request involves a specific situation which should be discussed with the officials of the local Tax Services Office.
Generally, when a partnership of professionals divides its business in two by creating a new partnership, the business of the new partnership cannot be said to have been substituted for the old business since the old partnership continues to exist and operate. Consequently, subsection 34.2(3) of the Act would not appear to include the business of the new partnership in the "particular business" as that term is used in this subsection. This conclusion may differ in a particular fact situation, such as when the original partnership carried on two separate businesses. Consequently, you may wish to discuss the facts of a particular situation with the appropriate Tax Services Office.
Yours truly,
for Director
Resources, Partnerships and Trusts Division
Income Tax Rulings and Interpretations Directorate
Policy and Legislation Branch
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© Her Majesty the Queen in Right of Canada, 1996
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