3 September 1997 Internal T.I. 9710907 - PARTNERSHIP

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:

year end election partner in a partnership

Position:

Reasons:

September 3, 1997

Winnipeg Tax Services Office Resources, Partnerships
Business Enquiries and Trusts Division
S. J. Tevlin
(613) 957-2093

Attention: H. Zerbin
		                       971090

Election Re: Year End - Members of a Partnership

We are writing in response to your memorandum dated April 24, 1997 wherein you requested our opinion with respect to the determination of year ends for individuals in a partnership. In particular you described the following situation.

A partner who is authorized on behalf of a ten member partnership, elects to use the alternative method to keep its off calendar year-end. 9 partners file their returns according to the election. One partner continues to file his return as if there was no new legislation concerning year-ends.

You have asked whether that partner can also use the "alternative method" allowed pursuant to subsection 249.1(4) of the Income Tax Act (the "Act") or must the 1995 T1 return be amended to have the 1995 fiscal period end at the 1995 calendar year end.

Opinion

Subsection 96(3) of the Act was amended to treat an election filed by a member of a partnership under new subsections 249.1(4) and (6) of the Act in the same manner as other elections referred to in subsection 96(3) of the Act.

If the election to continue off calendar year end, pursuant to subsection 249.1(4) of the Act, is made or executed on behalf of the taxpayer and each other person who was a member of the partnership during the fiscal period and the taxpayer making the election had the authority to act for the partnership then such election will be valid for each person on whose behalf the election was made pursuant to subsection 96(3) of the Act.

It is therefore our opinion that if the 249.1(4) of the Act election was made on behalf of all members and it was made by a member of the partnership that had the authority to do so, then the 10th partner should be deemed to have made the election pursuant to subsection 249.1(4). As such the taxpayer in question should be allowed to amend his 1995 T-1 to report his income using the alternative method.

We apologize for the delay in responding to your enquiry.

for Director
Resources, Partnerships and Trusts Division
Income Tax Rulings and Interpretations Directorate
Policy and Legislation Branch