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.
Principal Issues:
Is 73(1) applicable for transfers of partnership property between partners who are spouses?
Position:
No
Reasons:
The partnership, not the partner, is considered to be the owner of partnership property
952532
XXXXXXXXXX J.P. Dunn
(613) 957-8953
Attention: XXXXXXXXXX
November 1, 1995
Dear Sirs:
Re: Transfers of Property from a Partnership
We are writing in response to your correspondence of September 11, 1995 wherein you had requested the views of the Department in respect of a distribution of property from a partnership to the partners thereof in circumstances in which the partners are spouses. More particularly, you had requested whether subsection 73(1) of the Income Tax Act (the "Act") would be applicable to such transfers.
It is the view of the Department that, in such a circumstance, it is the partnership rather than the individual partners which is considered to be the owner of the partnership property and, consequently, subsection 73(1) of the Act would not be applicable as that provision is only applicable with respect to capital property of the taxpayer which has been transferred to the taxpayer's spouse. As the taxpayer referred to in subsection 73(1) of the Act would be the individual partner, that provision would not be relevant in terms of partnership property as the taxpayer is not considered to own the property to be transferred.
Although subsection 73(1) of the Act would not be applicable in the circumstances described, that provision could be applicable in respect of partnership property which had been distributed to the individual partners from the partnership on either a taxable or a tax-deferred basis pursuant to subsection 98(3) or (5) of the Act as may be applicable in the particular circumstances.
We trust that this is the information which you require.
Section Chief
Leasing and Finance Section
Financial Industries Directorate
Income Tax Rulings and
Interpretation Directorate
Policy and Legislation Branch
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