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: At what time does the partnership cease to exist?
Position: The partnership is deemed, for purposes of the Act, not to have ceased to exist until such time as all the partnership property has been distributed to the persons entitled by law to receive it.
Reasons: Wording of the Act.
XXXXXXXXXX 2003-003748
Shaun Harkin, CMA
November 5, 2003
Dear XXXXXXXXXX:
Re: Technical Interpretation Request: Partnerships
This is in reply to your letter of August 26, 2003 wherein you asked at what time would the partnership in question be regarded as having ceased to exist for the purpose of the Income Tax Act (the "Act").
Written confirmation of the tax consequences inherent in a particular transaction or series of transactions are given by this Directorate only where the transaction(s) are proposed and are the subject matter of an advance ruling request submitted in the manner set out in Information Circular 70-6R5. Notwithstanding the foregoing, we are prepared to provide the following comments.
Whether or not a partnership ceases to exist depends on the partnership agreement and provincial partnership law. Notwithstanding that a partnership may cease to exist at law, subsection 98(1) of the Act deems the partnership, for purposes of the Act, not to have ceased to exist until such time as all of the partnership property has been distributed to those entitled by law to receive it. In our view, in the situation described in your letter, paragraph 98(1)(a) would apply to deem the partnership, for purposes of the Act, not to have ceased to exist until such time as all the partnership property has been distributed to the persons entitled by law to receive it.
The foregoing comments represent our general views with respect to the subject matter. As indicated in paragraph 22 of Information Circular 70-6R5, the above comments do not constitute an income tax ruling and accordingly are not binding on the Canada Customs and Revenue Agency. Our practice is to make this disclaimer in all instances in which we provide an opinion.
We trust the above comments are of assistance.
Yours truly,
Daryl Boychuk, LL.B
for Director
Business and Partnerships Division
Income Tax Rulings Directorate
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