Principal Issues: Whether, in conformity with subsections 39(4.1) and 39(5), a limited partner in a limited partnership investing in highly speculative investments can elect under subsection 39(4) in order to obtain a capital gain treatment on the income allocated to the limited partner and resulting from the disposition of Canadian securities owned by the limited partnership.
Position: Question of facts. The limited partner will be considered to carry on the business of the limited partnership for the purpose of subsections 39(4) and 39(5). It is a question of fact whether the limited partner is a taxpayer described in subsection 39(5).
Reasons: Subsection 39(4.1) overrides the presumption under subsection 96(1)(c) that the limited partnership is a separate person resident in Canada. Under subsection 39(4.1), the limited partners are deemed to own and dispose of the Canadian securities owned by the limited partnership for the purpose of applying subsections 39(4) and 39(5).