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:
Prior opinion given that this taxpayer would be grandfathered from the application of our new position re: acb of partnership interest calculation, but only for 1995, pending the outcome of our study of the matter.
Position:
Grandfathered only for 1995. The new position applies for 1996 and subsequent years.
Reasons:
Result of review of grandfathering issue by senior management.
961383
XXXXXXXXXX Allan Nelson
(613) 957-9768
Attention: XXXXXXXXXX
October 31, 1996
Dear Sirs:
Re: XXXXXXXXXX (the "Partnership")
Calculation of Partnership Interest Adjusted Cost Base
In our April 24, 1996 letter to you, we advised that the Department had undertaken a comprehensive review of grandfathering arrangements from the position outlined in Income Tax Technical News No. 5, dated July 28, 1995, concerning the method of calculating the adjusted cost base of a partner's interest in a partnership.
The Department's review is now completed and the results will be included in our soon to be released revision to Information Circular 70-6R2, entitled "Advance Income Tax Rulings". Generally, our position is not to grandfather anyone from the application of a change in a published departmental interpretation. We will endeavour to consider all circumstances when setting the implementation date of such changes.
Accordingly, we wish to reiterate that only those members who were partners of XXXXXXXXXX before July 28, 1995, will be exempt from the position announced in Technical News No. 5, and only for the 1995 taxation year, due to the peculiar facts (i.e. many of XXXXXXXXXX limited partners would have filed their 1995 income tax returns based on our earlier letter to you dated November 27, 1995). For 1996 and subsequent taxation years, all partners of XXXXXXXXXX will be expected to follow the new position announced in Technical News No. 5.
The Department will, in special circumstances, consider deviations from the timing requirement regarding the calculation of the adjusted cost base of a partnership interest, such as in the case of a death of a partner where anomalous tax consequences may arise.
We hope this clarifies the matter.
Yours truly,
Chief
Partnerships Section
Resources, Partnerships and Trusts Division
Income Tax Rulings and Interpretations Directorate
Policy and Legislation Branch
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