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:
disposal of partnership interest
Position:
no gain or loss
Reasons:
98(5)
960841
XXXXXXXXXX C. TremblayAttention: XXXXXXXXXX
March 13, 1996
Dear Sirs:
Re: Disposal of partnership interest to a sole proprietorship
This is in reply to your letter of March 3, 1996, and is further to our letter of February 21, 1996, regarding the disposal of partnership interests and the continuance of a business into a sole proprietorship.
Generally, the provisions of subsection 98(5) of the Act permits a rollover to the continuing partner who carries on the business of the previous partnership as a sole proprietor. For example, where a former partnership had only one depreciable asset, the new proprietorship continuing the same business would retain the same cost base and the same undepreciated capital cost on that asset as what the former partnership had. Accordingly, in such a situation, there is no capital gain or loss for the continuing partner to report.
We trust our comments will be of assistance to you.
Yours truly,
for Director
Financial Industries Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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