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.
XXXXXXXXXX 961140
Attention: XXXXXXXXXX
April 23, 1996
Dear Sirs:
Re: Proposed Section 143.2 of the Income Tax Act (the "Act")
This is in reply to your letter dated February 16, 1996, concerning our previous reply dated January 31, 1996, in respect of the above-captioned subject.
As stated previously, this Directorate does not provide any opinion that relates to a contemplated transaction. In accordance with Information Circular 70-6R2, such contemplated transactions are dealt with through an application for an advance ruling. Consequently, we are not prepared to provide a definitive response to your enquiry and can only provide the following general comments:
1.In our previous reply we indicated that the cost or capital cost of property of the partnership would be reduced by any indebtedness that is a limited recourse amount, for the purposes of section 143.2 of the Act. This would be so, where the limited recourse amount can reasonably be considered to relate to the particular expenditure.
2.Since an indebtedness of a partnership can be a "limited recourse amount" either immediately or at any time in the future and either absolutely or contingently, it is a question of fact, to be determined at the particular time, whether an indebtedness would or would not be limited recourse amount. Whether members of a partnership would be considered to be privy to the financing transactions of the partnership at any time is not relevant in determining a limited partner's at-risk amount.
As indicated in paragraph 21 of Information Circular 70-6R2, this opinion is not an advance ruling and, accordingly, it is not binding on Revenue Canada, Taxation.
Yours truly,
for Director
Resources, Partnerships and
Trusts Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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© Her Majesty the Queen in Right of Canada, 1996
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© Sa Majesté la Reine du Chef du Canada, 1996
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