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:
Can a CCPC whose only asset is an interest in a partnership qualify as a small business corporation?
Position:
question of fact
Reasons:
Can qualify as a small business corporation if all or substantially all of the assets of the partnership are used to carry on an active business in Canada.
963031
XXXXXXXXXX A. Seidel
(613) 957-8974
Attention: XXXXXXXXXX
October 22, 1996
Dear Sirs:
Re: Small Business Corporation
This is in reply to your letter dated September 9, 1996 with respect to the issue of whether a corporation would qualify as a small business corporation, within the meaning of subsection 248(1) of the Income Tax Act (the "Act"), in the situation where the corporation's only asset is an interest in a partnership.
In response to Question #51 of the 1986 Canadian Tax Foundation Revenue Canada, Taxation Round Table, Revenue Canada stated that, in the situation where a corporation's only asset was an interest in a partnership that carried on an active business in Canada, the corporation would be considered to be a small business corporation if it was a Canadian-controlled private corporation and all or substantially all of the assets of the partnership were used in an active business carried on by the partnership in Canada. This view was also stated in paragraph 6 of former Interpretation Bulletin IT-486R.
We confirm that it is still Revenue Canada's view that a Canadian-controlled private corporation whose only asset is an interest in a partnership, where all or substantially all of the partnership's assets are used to carry on an active business in Canada, would be considered to be a small business corporation.
These comments are provided in accordance with the guidelines set out in paragraph 21 of IC 70-6R2 and are therefore not binding on Revenue Canada.
Yours truly,
for Director
Resources, Partnerships and
Trusts Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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