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 CCRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ADRC.
Principal Issues:
Whether subsection 98(3) of the Income Tax Act may be used when one of the partners in the particular partnership is itself a partnership or even if all of the partners are partnerships.
Position: Yes.
Reasons:
Subsection 102(2) of the Act provides that a reference to a person or a taxpayer who is a member of a particular partnership shall include a reference to another partnership that is a member of the particular partnership
XXXXXXXXXX 2002-014731
J. Gibbons, CGA
September 5, 2002
Dear XXXXXXXXXX:
We are replying to your email dated June 17, 2002, concerning whether subsection 98(3) of the Income Tax Act (the "Act") may be used when one of the partners in the particular partnership is itself a partnership or even if all of the partners are partnerships.
Our comments are of a general nature only since we cannot confirm the tax implications of particular transactions unless the transactions are proposed and are the subject matter of an advance ruling request submitted in the manner set out in Information Circular IC 70-6R5.
Subsection 102(2) of the Act provides that a reference to a person or a taxpayer who is a member of a particular partnership shall include a reference to another partnership that is a member of the particular partnership. Accordingly, it is our view that subsection 98(3) of the Act may apply even though one or all of the members of the particular partnership are partnerships. As regards the requirement in that subsection that the particular partnership be a Canadian partnership at the time the partnership is wound up, we will consider a member of the partnership which is a partnership all the members of which are resident in Canada at such time to be a member resident in Canada.
We trust that these comments will be of assistance.
Yours truly,
Bruce Dodd
for Director
Business and Partnerships Division
Income Tax Rulings Directorate
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