4 October 1989 Administrative Letter F3216 F - Computation and Flow-through of Partnership of Losses and Resource Expenses by Limited Partners

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.

Interpretation Bulletin Project Number 1635 Computation and Flow-through of Partnership of Losses and Resources Expenses by Limited Partners Revision of IT-138R

We have reviewed the above draft project and have no comments with respect to policy matters, current or pending, that are relevant to positions taken in the draft.

We do, however, have the following comments:

1)     Page 1 - Application - IT-183 was dated October 28, 1974, not October 22.

2)     Pages 7 and 8 - Paragraph 25 - The description of the amount deductible under section 101 is confusing.  Starting with the words "The amount so" at the end of line 6, on page 8 it appears that you are referring to "3/4 of the taxpayer's share of restricted farm losses". It is our opinion that you should be referring to the taxpayer's share of the losses.

3)     Pages 8 and 9 - Paragraph 29 - The grandfathering at the top of page 9 is incorrect.  There is no mention of the exception for partnership interests acquired before December 16, 1987 and the reference to "before June 1, 1988" is applicable only to interests acquired pursuant to a prospectus or offering memorandum; there is no time limit for the acquisition of an interest pursuant to a written agreement.

4)     Page 10 - Paragraph 32 - There are numerous references to "limited partner" that should be a reference to "member" since they are in sentences describing when a "member" is or is not a "limited partner".

B.J. Bryson Acting DirectorCurrent Amendments and Regulations Division

DCB/jab