T4068 Guide for the Partnership Information Return (T5013 Forms)

Filing deadline for tiered partnerships references the “end” members

Chapter 4 – Due dates

Annual return

The due date for filing an annual return (including distributing the T5013 slips) depends on the type of partners, including end members of a tiered partnership. Mail the recipients' copies of the T5013 slips, deliver them in person, or send them electronically no later than the day you have to file the return.

Due dates

• March 31 after the calendar year in which the fiscal period of the partnership ended if, throughout the fiscal period:
  • all partners are individuals, including end members of tiered partnership, and investment clubs that file on the modified-partnership basis. We consider a trust to be an individual
• Five months after the end of the partnership's fiscal period if, throughout the fiscal period:
  • all partners are corporations, including end members of a tiered partnership
• In all other cases, the earlier of:
  • March 31 after the calendar year in which the fiscal period of the partnership ended
  • the day that is five months after the end of the partnership's fiscal period

Partner wages are non-deductible

Reconciling the partnership's net income or loss for income tax purposes

... Salary or wages paid to partners are not allowable for tax purposes.

Exclusions from partnership filing obligations

Who has to file a partnership information return?

Under subsection 229(1) of the Regulations, all partnerships that carry on business in Canada or are Canadian partnerships or specified investment flow-through (SIFT) partnerships, must file a partnership information return. However, under CRA administrative policy, certain partnerships that carry on business in Canada or are Canadian partnerships are not required to file a partnership information return. …

Partnerships that carry on business in Canada and Canadian partnerships – A partnership that carries on a business in Canada, or a Canadian partnership with Canadian or foreign operations or investments, must file a return if either of the following occur:

• at the end of the fiscal period, the partnership has an absolute value of revenues plus an absolute value of expenses of more than $2 million, or has more than $5 million in assets;
• at any time during the fiscal period:
  • the partnership is a tiered partnership (has another partnership as a partner or is itself a partner in another partnership), or
  • the partnership has a corporation or a trust as a partner, or
  • the partnership invested in flow-through shares of a principal-business corporation that incurred Canadian resource expenses and renounced those expenses to the partnership, or
  • the minister of National Revenue requests one in writing

S. 96(1.01) special allocation is made at the end of the regular partnership taxation year

Line 350 – Other adjustments

… Paragraph 96(1.01)(a) does not require that partnership income or loss be calculated immediately after a member leaves the partnership. The income or loss allocation, including that of the former member, continues to be calculated after the end of the partnership's fiscal period. In some circumstances the fiscal period of a partnership may end in a tax year of the former member that is after the tax year in which the partnership interest was disposed of. It is, therefore, possible that a member will not be required to report a partnership income allocation until the tax year following that in which a capital gain or loss on the disposition of the partnership interest is required to be reported.

Partnership donations treated as made by the partners

Chapter 8 – T5013 schedules …

T5013 SCH 1, Net Income (Loss) for Income Tax Purposes …

Filling out the T5013 SCH 1 …

Line 112 – Charitable donations and gifts from the T5013 SCH 2

Charitable donations and gifts – The eligible amount of the charitable donations and other gifts are eligible for non-refundable tax credits for individuals and deductions for corporations.

We consider that the partners made the gift in their own tax year in which the partnership's fiscal period ends. The partnership cannot deduct charitable donations and other gifts when calculating its income or loss for tax purposes. If a partnership deducted such amounts from its income for accounting purposes, add them back to calculate the partnership's income or loss for tax purposes.

Partnership donations treated as made by the partners

Chapter 8 – T5013 schedules …

T5013 SCH 1, Net Income (Loss) for Income Tax Purposes …

Filling out the T5013 SCH 1 …

Line 112 – Charitable donations and gifts from the T5013 SCH 2

Charitable donations and gifts – The eligible amount of the charitable donations and other gifts are eligible for non-refundable tax credits for individuals and deductions for corporations.

We consider that the partners made the gift in their own tax year in which the partnership's fiscal period ends. The partnership cannot deduct charitable donations and other gifts when calculating its income or loss for tax purposes. If a partnership deducted such amounts from its income for accounting purposes, add them back to calculate the partnership's income or loss for tax purposes.