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.
5-951216
XXXXXXXXXX Marc Ton-That
Attention: XXXXXXXXXX
July 6, 1995
Dear Sirs:
Re: "Partnership butterfly"
This is in reply to your letter of May 3, 1995 wherein you requested our opinion on whether the provisions of subsection 85(3) would apply to the winding-up of a partnership when property of the partnership is transferred, prior to the winding-up, to more than one corporation and the transfers are subject to the election under subsection 85(2).
You suggested that subsection 85(3) "does not specifically require or use wording that would require all property to be transferred to only one corporation".
We do not agree. In our opinion, subsection 85(3) requires that property of a partnership be transferred to only one corporation prior to its winding-up. For example, the construction of paragraphs 85(3)(e) and 85(3)(f) indicates that a transfer of property from a partnership to more than one corporation was not intended by subsection 85(3). Our opinion therefore remains as stated in paragraph 3 of Interpretation Bulletin IT-378R.
The foregoing comments are given in accordance with the practice referred to in paragraph 21 of Information Circular 70-6R2 and are not binding on Revenue Canada, Taxation.
Yours truly,
for Director
Reorganizations and Foreign Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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