S. 98(5) can unexpectedly trump s. 98(3)

S. 98(4) provides that s. 98(3) is not applicable “in any case” where s. 98(5) is applicable. Thus, if s. 98(5) applies on the basis of one former partner using any property in the business that was the partnership business, s. 98(3) will not apply to the other partner even where the parties filed a joint s. 98(3) election.

Neal Armstrong. Summary of Paul Cormack and Janette Pantry, “Partnership Reorganizations,” Canadian Tax Highlights, Vol. 26, No. 6, June 2018, p. 5 under s. 98(5).