Subsection 248(1) - Definitions

Subtopics

Cases

Canada v. Green, 2017 FCA 107

partnerships not taxpayers for ss. 3 and 111 purposes

Webb JA stated (at para. 22) that “since partnerships are not taxpayers for the purposes of sections 3 and 111, these sections do not apply to partnerships,” and found (at para. 12) that partnerships are not taxapyers except for purposes of ss. 96 to 103.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 96 - Subsection 96(2.1) business losses of lower-tier LPs flowed through upper-tier partnership 542
Tax Topics - Income Tax Act - Section 111 - Subsection 111(1) - Paragraph 111(1)(e) upper-tier LP not required to compute income and therefore not subject to s. 111(1)(e) 115
Tax Topics - Income Tax Act - 101-110 - Section 102 - Subsection 102(2) ITA recognizes 2-tier partnerships 72

Administrative Policy

26 May 2023 External T.I. 2022-0946411E5 - Classification of an Intermunicipal Management Board

an intermunicipal management board is a corporation given similarity of governing provisions to CBCA

A municipality may acquire an interest in a Canadian renewable energy project through an intermunicipal management board (“IMB”), which acquires an interest in the limited partnership owning the project assets and selling the electricity generated. In order for the LP to claim accelerated CCA without restriction by the Canadian specified energy property rules, Reg. 1100(26)(b) requires that all partners be “corporations” the principal business of which is the sale, distribution or production of electricity (or other enumerated activities), or other qualifying partnerships.

After noting that the (apparently Quebec) statutory provisions governing an IMB are similar to those governing a CBCA corporation, including providing that the IMB is a legal person (“personne morale”), has limited liability, except in relation to certain borrowings, has a board of directors and is governed by by-laws and resolutions – and the interests in it carry voting rights, CRA concluded that such an IMB qualifies as a corporation. It went on to indicate that whether the principal-business test adverted to above was satisfied was a question of fact on which it had insufficient particulars.

Locations of other summaries Wordcount
Tax Topics - Income Tax Regulations - Regulation 1100 - Subsection 1100(26) - Paragraph 1100(26)(b) an intermunicipal management board is a corporation/ no finding on principal business 273

21 November 2017 CTF Roundtable Q. 15, 2017-0724091C6 - Conversion from a US LP to an LLC

conversion from LP to LLC a disposition

The conversion of a U.S. LP to an LLC would result in a disposition of the partnership interests and assets at FMV with the ACB of the acquired membership interests to the former partners and of the assets to LLC being the same amounts.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 95 - Subsection 95(2) - Paragraph 95(2)(f) an LLC resulting from a conversion from a US LLC has high inside and outside basis 254

2017 Ruling 2017-0687061R3 - Whether re-designation of LPUs is a disposition.

a partner’s election to have its Class A LP units redesignated as Class F units will not entail their disposition
Background

The Partnership is a limited partnership which invests in securities chosen by its manager on a discretionary basis and all of whose partners are Canadian residents. Two classes of Units, issuable in series, are being offered on a continuous basis to investors pursuant to an offering memorandum:

(a) Class A Units which are subject to a management fee of a percentage of their NAV, and which may be retracted monthly, subject to a redemption fee.

(b) Class T Units are generally available only to RRSP-eligible investment funds managed by the Manager and are not subject to any management fee.

The Partnership has outstanding but no longer offers for sale two other classes, Class F and Class S Units, whose terms are the same as for Class A. The Limited Partnership Agreement allows the General Partner to create new classes of Units to be issued by the Partnership.

Proposed transactions

It is proposed that two new classes of Units will be offered to all existing and prospective Limited Partners (Class LT Units and Class MT Units), whose terms will be identical to those of the Class A Units except respecting the applicable management fees and longer notice periods required for retraction. The new classes are intended to provide the opportunity to benefit from a long-term oriented class, and the longer notice periods will provide longer-term capital.

The Partnership will provide current Class A, Class F and Class S Limited Partners with the option to re-designate all or a portion of their current units as Class LT or Class MT Units (the “Re-designation”).

Rulings

The creation of new Class Units for offer to existing and prospective investors will not, by itself, result in a disposition by any of the Limited Partners of his or her Units.

The Re-designation of any particular Limited Partner’s existing Units as Class LT Units or Class MT Units will not, by itself, result in the disposition of those Units.

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