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.
Subject: PARTNERSHIP AS MEMBER OF A PARTNERSHIP Section(s): 98(5), 102(a), 102(b)]
912182
C.R. Brown
(613) 957-8954
XXX
Attention: XXX
February 3, 1992
Dear Sirs:
Re: Subsection 98(5) and paragraph 102(a) of the Income Tax Act (the "Act")
This is in reply to your letter of August 2, 1991 concerning the above noted subjects.
We apologize for the delay in replying to your request.
You wish to have our views on whether a partnership having as one of its partners a Canadian partnership as defined in paragraph 102(a) of the Act is thereby disqualified from being itself a Canadian partnership. It is our understanding that as a matter of law the members of a partnership that is itself a "member" of another partnership are also members of the latter partnership. It is also our view, that this legal status would be relevant for the purposes of the determination made under paragraph 102(a).
Where a partnership that has as a partner a second partnership ceases to exist, you have requested our views on whether the second partnership would be considered to be "one person" as referred to in subsection 98(5). The legislation does not clearly deal with the issue of a partnership's status as "one person" and the Department continues to review the tax issues with respect to the use of two-tiered partnerships. Thus the facts and circumstances of an actual case involving subsection 98(5) in such a situation would be carefully considered before deciding on the appropriate tax treatment.
However, we would be pleased to consider this issue in an advance income tax request involving a proposed rollover.
We trust these comments will be of assistance.
for Director
Manufacturing Industries, Partnerships
and Trusts Division
Rulings Directorate
Legislative and Intergovernmental
Affairs Branch
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