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.
Dear Sirs:
Re: Qualified Farm Property
This is in reply to your letter of May 31, 1991 requesting a technical interpretation with respect to a hypothetical transaction relating to the transfer of partnership farm land to the partners themselves.
The sample that you provide is quite specific and it appears that it may relate to a particular contemplated transaction or transactions. Assurance as to the tax consequences of contemplated transactions can only be given in response to a request for an advance income tax ruling. The procedure for requesting an advance income tax ruling is outlined in Information Circular 70-6R2. If you wish to obtain any binding commitment with respect to actual cases with facts similar to your example, an advance income tax ruling application should be submitted. Although we are unable to provide any binding assurance with respect to the queries you have raised, we do provide the following general comments for your information.
Our Comments
It is generally agreed that members of a partnership who are individuals are entitled to claim the capital gains deduction with respect to their share of capital gains realized by their partnership. Thus where land held by a farm partnership is qualified farm property and a disposition of such farm land results in a capital gain to the partnership it is the Department's position that the subsection 110.6(2) capital gains deduction is available to a partner, who is an individual, in respect of capital gains allocated by the partnership of which he or she is a member, subject to the provisions of subsection 110.6(11) of the Income Tax Act.
It appears that subsection 98(2) would apply to the hypothetical transactions to require the dispositions from the partnership to the partners to take place at fair market value.
We trust this is the information you require.
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© Her Majesty the Queen in Right of Canada, 1991
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© Sa Majesté la Reine du Chef du Canada, 1991
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