Principal Issues:
1. This file is a XXXXXXXXXX deal which is almost identical to the one concerning XXXXXXXXXX, except that rulings are being given currently rather than opinions provided in the previous deals.
2. The issues concern (a) the applicability of section 18.1 to restrict the deductibility of the XXXXXXXXXX expenses incurred by the XXXXXXXXXX Partnership (b) the at-risk amount under subsection 96(2.2) (c) the deductibility of management expenses (d) the applicability of the limited-recourse provisions under section 143.2 regarding loans granted to Limited Partners for acquisition of their partnership interests and (e) put/call options in respect of the master limited partnership’s interest in the XXXXXXXXXX partnership.
Position:
1. We provided rulings similar to those given in file: #963096 and 983239.
2. Section 18.1 would not apply, if before the end of the taxation year in which the XXXXXXXXXX expenditures are made, income in respect of the XXXXXXXXXX exceeding XXXXXXXXXX % of such XXXXXXXXXX expenses is included in computing the XXXXXXXXXX Partnership's income for that year.
3 The Secondary Loans made by the bank to the Limited Partners are full recourse to the Limited Partners and are interest bearing. For the purpose of subsection 143.2(7), a proviso has been added to ruling regarding that interest on such loans be paid at least 60 days after the end of the year of the Limited Partners.
4. Similarly, a proviso was added to the ruling with regard to Put/Call Option available to the Partnership to dispose of its interest in the XXXXXXXXXX partnership.
Reasons: