Section 97

Subsection 97(1) - Contribution of property to partnership

Cases

Iberville Developments Limited v. Canada, 2020 FCA 115

A corporate taxpayer having shopping centres with a cost amount and fair market value of $14M and $130M, respectively, contributes the properties...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 97 - Subsection 97(2) - Paragraph 97(2)(b) the starting ACB of a partnership interest was determined exclusively under s. 97(2)(b) 445

See Also

Iberville Developments Limited v. The Queen, 2018 TCC 102, aff'd 2020 FCA 115

The taxpayer unsuccessfully argued that the initial cost of its interest in an LP was the fair market value of the property contributed by it to...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 97 - Subsection 97(2) the starting ACB of a partnership interest was determined exclusively under s. 97(2)(b) 659
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Property only one interest in a partnership 167

Administrative Policy

Income Tax Regulation News, Release No. 3, 30 January, 1995 under "Use of a Partner's Assets by a Partnership"

When a partnership acquires the right to use the property of a partner for no rent, the partner will be deemed by s. 97(1) to dispose of that...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Subsection 97(2) - Rules if election by partners

Cases

Canada v. Oxford Properties Group Inc., 2018 FCA 30

When Oxford Properties was sold to an OMERS subsidiary, the purchaser first negotiated that Oxford would drop various properties down into LPs on...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 245 - Subsection 245(4) using the s. 88(1)(d) bump on newly-formed rental property LPs to avoid indirect recapture income under s. 100(1) was abusive 975
Tax Topics - Income Tax Act - Section 88 - Subsection 88(1) - Paragraph 88(1)(d) s. 88(1)(d) bump is intended to permit the transfer of ACB that otherwise would be lost to another property that is taxed in the same way 371
Tax Topics - Income Tax Act - Section 98 - Subsection 98(3) - Paragraph 98(3)(c) s. 98(3)(c) bump is intended to avoid gain realization where there has been no economic gain 267
Tax Topics - Income Tax Act - Section 69 - Subsection 69(11) 3-year time limitation in s. 69(11) did not establish safe harbor for avoidance of recapture on sale after that period 382
Tax Topics - Income Tax Act - Section 100 - Subsection 100(1) purpose is to ensure that latent recapture will be recognized on sale to tax exempt 254
Tax Topics - Income Tax Act - Section 171 - Subsection 171(1) GAAR question as to determining a provision’s object was subject to correctness standard 169
Tax Topics - Statutory Interpretation - Hansard, explanatory notes, etc. statement that amendment was for “clarification” was self-serving 209
Tax Topics - Statutory Interpretation - Interpretation Act - Subsection 45(2) determination of whether amendment merely clarified requires review of pre-amendment state of law 146
Tax Topics - Income Tax Act - Section 245 - Subsection 245(2) consequential s. 245(2) adjustment must be scaled to the abuse 391

R & S Industries Inc. v. Canada (National Revenue), 2016 FC 275

A transfer agreement for the drop-down under s. 97(2) of assets by the taxpayer (R&S) to a controlled LP specified that the elected amounts in a...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Other Legislation/Constitution - Federal - Federal Courts Act - Section 18.1 - Subsection 18.1(2) extension not granted due to unexplained lengthy delay and lack of substantive merit 579

Canada v. Pinot Holdings Ltd., 99 DTC 5772 (FCA)

The taxpayer transferred land to a partnership for consideration of $13.5 million which was satisfied by that amount being paid by the...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - General Concepts - Substance 92

Continental Bank of Canada v. R., [1997] 1 CTC 13, 96 DTC 6355, [1996] 3 CTC 14

After the cancellation of an agreement for the sale of the shares of the taxpayer by its parent ("Continental Bank") to a third party ("Central...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - General Concepts - Sham no sham if docs reflect legal reality 92
Tax Topics - General Concepts - Tax Avoidance no sham if docs reflect legal reality 92

Haro Pacific Enterprises Ltd. v. The Queen, 90 DTC 6583, [1990] 2 CTC 493 (FCTD)

The taxpayer ("Haro") contributed real estate worth $1.9 million to a partnership and the other member ("B.C. Ltd.") contributed $950,000 in cash....

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

See Also

Iberville Developments Limited v. The Queen, 2018 TCC 102, aff'd 2020 FCA 115

In 2003 and 2004, the taxpayer (“Iberville”) contributed shopping centres worth $130M and with a cost base of $14M and received non‑share...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 97 - Subsection 97(1) s. 97(1) establishes FMV cost for partner's interest 136
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Property only one interest in a partnership 167

R & S Industries Inc. v. The Queen, 2017 TCC 75

The taxpayer (“R & S”) transferred its business to a limited partnership, with a joint s. 97(2) election being made. The Minister reassessed...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 171 - Subsection 171(1) Tax Court had jurisdiction to consider change to description of consideration in s. 97(2) election form 190

Oxford Properties Group Inc. v. The Queen, 2016 TCC 204, rev'd 2018 FCA 30

A corporation (“BPC”), which was mostly owned by a Canadian pension fund (“OMERS”), obtained the agreement of a predecessor of the...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 245 - Subsection 245(4) no abuse in using 88(1)(d) bump to avoid s. 100 after 3-year s. 69(11) period 557
Tax Topics - Income Tax Act - Section 248 - Subsection 248(10) subsequent sale part of series as it utilized the benefit of previous LP packaging transactions 383
Tax Topics - Income Tax Act - Section 88 - Subsection 88(1) - Paragraph 88(1)(d) purpose: to push down ACB of shares of sub to qualifying non-depreciable property 489
Tax Topics - Statutory Interpretation - Interpretation Act - Subsection 45(2) subsequent amendment shed light on scope of previous version 107
Tax Topics - Income Tax Act - Section 100 - Subsection 100(1) S. 100 operates only on outside basis gain 290
Tax Topics - Income Tax Act - Section 69 - Subsection 69(11) Parliament provided safe harbour for sales after 3 years 204
Tax Topics - Income Tax Act - Section 98 - Subsection 98(3) - Paragraph 98(3)(c) purpose: to preserve high outside basis through push down 293

Ceco Operations Ltd. v. The Queen, 2006 DTC 3006, 2006 TCC 256

The taxpayer transferred assets of a business to a partnership in what was intended to be an s. 97(2) rollover transactions in consideration for...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Vantem Holdings Ltd. v. The Queen, 98 DTC 1335, [1998] 1 CTC 2821 (TCC)

The taxpayer borrowed money from a bank, contributed the borrowed money and a shopping centre to a partnership in consideration for the assumption...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

MDS Health Group Ltd. v. The Queen, 96 DTC 1324, [1995] 2 CTC 2526 (TCC), aff'd 97 DTC 5009 (FCA)

The taxpayer contributed technology valued at U.S. $3 million to a newly-formed partnership between it and an arm's length Canadian corporation...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Administrative Policy

December 2014 CTF Roundtable, Q. 6

Transactions which entailed the formation on a rollover basis of a Canadian partnership followed immediately by the admission of a non-resident...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

2014 Ruling 2013-0505431R3 - XXXXXXXXXX

In connection with an extensive reorganization, Pubco will transfer its undivided interest in a royalty to a partnership (Partnership D) mostly...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 55 - Subsection 55(3) - Paragraph 55(3)(a) public trading in dividend recipient does not engage exclusion in s. 55(2)(a)(iv) 848
Tax Topics - Income Tax Act - Section 66.2 - Subsection 66.2(5) - Canadian development expense - Paragraph (e) transfer of royalty from partly-owned partnership 464
Tax Topics - Income Tax Act - Section 88 - Subsection 88(1) delay in filing articles of dissolution 55

4 July 2012 External T.I. 2011-0429601E5 F - Roulement et société de personnes

In order to merge two partnerships (in this case, two partnerships each owned as to 95% and 5% by a husband and wife, respectively, should s....

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 98 - Subsection 98(3) two partnerships potentially could be merged by using s. 97(2) followed by s. 98(3), or the reverse 116

29 July 2009 External T.I. 2008-0297011E5 F - Conversion de participations dans une SNC

A partnership has several members, some of whom hold partnership interests which participate in both income and capital of the partnership. The...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Disposition no disposition if new partnerships interests exchanged for old interests that in totality are not substantially distinguishable 213
Tax Topics - Income Tax Act - Section 96 - Subsection 96(1.01) s. 96(1.01) inapplicable where only income interest and not capital interest disposed of 139
Tax Topics - Income Tax Act - Section 43 - Subsection 43(1) where only income interest and not capital interest in a partnership disposed of, there is part disposition of partnership interest with resulting reduced ACB for remainder interest 163

3 December 2003 External T.I. 2003-0046015 - Amalgamation and Sub. 97(2) Election

Where a predecessor corporation made a transfer to a partnership described in s. 97(2), the amalgamated corporation can file the s. 97(2) election...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

9 June 2003 External T.I. 2003-0004835 - WHETHER A PARTNERSHIP IS A PERSON

In a s. 97(2) transfer, the partnership is not considered a person related to the taxpayer solely because the taxpayer is a majority interest...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

2001 Ruling 2001-0070943 - PARTNERSHIP INTEREST PENSION CORP.

A corporation ("Company A") disposed of a real estate property to a limited partnership in consideration for partnership interest and the...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 253.1 48
Tax Topics - Income Tax Act - Section 69 - Subsection 69(1) - Paragraph 69(1)(b) exercise price respected as the proceeds of property subject to NAL option 57

17 November 1999 External T.I. 9901265 - 97(1) AND A RESERVE

"[W]here an individual transfers property to a partnership under subsection 97(2) of the Act and receives, in addition to a partnership interest...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

1999 Ruling 9932263 - PARTNERSHIP REORGANIZATION

A partnership that is a member of a partnership may elect under s. 97(2).

7 February 1997 External T.I. 9702245 - TRANSFER OF PROPERTY

Pending the completion of a review of the matter, the administrative position on s. 85(1)(b) described at the 1996 Corporate Management Tax...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

24 August 1992 T.I. (Tax Window, No. 23, p. 13, ¶2125)

Where a corporation converts a capital property to inventory and transfers it to a partnership under s. 97(2), RC will apply its policy in...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

89 C.R. - Q.36

Where an election under s. 97(2) is made indicating that a particular property is capital property, the election will not be considered invalid by...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

87 C.R. - Q.5

It is a question of fact whether there is a Canadian partnership immediately after the transaction.

IT-471R "Merger of Partnerships"

Combined use of s. 98(3) wind-ups and s. 97(2) drop-downs to merge Cdn partnerships

1. The Act does not specifically provide for the merger or...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

IT-338R "Partnership Interests - Effects on Adjusted Cost Base Resulting from the Admission or Retirement of a Partner"

IT-457R "Election by Professionals to Exclude Work in Progress from Income" under "Transfers of Work in Progress"

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 98 - Subsection 98(3) 136

Forms

T2059 Election on Disposition of Property by a Taxpayer to a Canadian Partnership

Filing instructions (different where co-ownership)

Mail one copy of this election and related schedules (as specified), completed by the...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Articles

M. O'Brien, "The 97(2) Rollover - Basic Rules and New Developments", Business Vehicles, Vol IV, No. 2, 1998, p. 186.

McMullen, "Tax Considerations in the Reorganization of Partnerships", 1994 Corporate Management Tax Conference Report, c. 6.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 248 - Subsection 248(21) 0

Bernstein, "Partnership Versus Joint Company", Tax Profile, March 13, 1990

Discussions of deferred extraction of "boot" from the partnership in light of RC positions on GAAR and partial dispositions; and of partnership...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 85 - Subsection 85(2) 28

Accounting Pronouncements

CICA Emerging Issues Committee, EIC-28 "Accounting for Assets Contributed to a Joint Venture"

Paragraph 97(2)(b)

Cases

Iberville Developments Limited v. Canada, 2020 FCA 115

The taxpayer (“Iberville”), on three occasions in 2003 and 2004, contributed shopping centres worth $130M to a newly-formed partnership in...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 97 - Subsection 97(1) issuance of partnership units on a drop-down is irrelevant to the ACB of the partnership interest 470

Subsection 97(3) - Election not available — section 88

Administrative Policy

16 November 1990 T.I. (Tax Window, Prelim. No. 2, p. 19, ¶1051)

Where a corporation disposes of property at a loss to a partnership which is owned by its controlling shareholder and his spouse, s. 97(3) will...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.