Section 98

Subsection 98(1) - Disposition of partnership property

Cases

Bow River Pipelines Ltd. v. Canada, 2000 DTC 6090 (FCA)

A wholly-owned subsidiary of the taxpayer was wound-up into the taxpayer, as a result of which the taxpayer became the assignee 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.

See Also

OSFC Holdings Ltd. v. The Queen, 99 DTC 1044, [1999] FTR 33266, [1999] 3 CTC 2649, aff'd 2001 DTC 5471, 2001 FCA 260

A trust company ("Standard") formed a partnership between itself and a wholly-owned subsidiary, transferred a mortgage portfolio to the...

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

Howatt v. MNR, 89 DTC 215, [1989] 1 CTC 2325 (TCC)

The taxpayer ceased to be in partnership with his two brothers in December 1978, when a dispute arose and he was asked to leave, notwithstanding...

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

A. Akman & Sons (Fla) Inc. v. Chipman (1987), 38 BLR 185 (Man QB)

A real estate development partnership was terminated by the statement of the plaintiff that it wished to terminate the partnership and that it...

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

Darke v. MNR, 76 DTC 6468, [1976] CTC 734 (FCTD)

An agreement whereby one of the three partners of a partnership sold his undivided 1/3 interest in the partnership assets to the other two...

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

Simpson v. The Queen, 76 DTC 6350, [1976] CTC 600 (FCTD)

A partnership described by Addy, J. as consisting of a firm of chartered accountants ("Riddell Stead") and three individuals was found to have...

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

Marksim Storage Ltd. v. MNR, 73 DTC 158, [1973] CTC 2185 (T.R.B.), rev'd 76 DTC 6401, [1976] CTC 665 (FCTD)

The sale by two of the four partners of a partnership that had realized a taxable gain of their partnership interests to a third-party purchaser...

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

Dolente v. MNR, 65 DTC 179 (TAB)

Mr. Fordham found that the assignment by two of the three partners of a partnership of their interests to a third party did not result in the...

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

Alvarez v. Daly (1964), 48 WWR 611 (BCSC)

The past dealings of partners in a medical partnership of more than 20 members and other terms of the partnership agreement permitted Wootton J....

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

Tait v. Winsby, [1943] 1 DLR 81 (PC)

A partnership of two individuals was found to have been formed for a single adventure (namely, the exploitation of some mining claims) in light of...

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

26 January 2015 External T.I. 2014-0545051E5 - Subsections 98(1) and 98.1(1)

In confirming a "concern" to this effect, CRA stated:

[P]aragraph 98(1)(a) would only deem a person who was a partner at the time the partnership...

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

8 May 2014 External T.I. 2014-0522771E5 - Whether a partnership has ceased to exist

Partner A sold his 50% partnership interest in a Quebec general partnership (the "Partnership") operating a grocery business in the province of...

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(3) winding-up of affairs of partnership with one partner when constructive distribution 211

16 March 2012 External T.I. 2011-0423191E5 F - Disposition d'une participation dans une SP

Where on a winding-up of a partnership on a non-rollover basis, a member receives properties of the partnership with a fair market value lower...

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 - Paragraph (b) - Subparagraph (b)(i) disposition of partnership interest even though no proceeds received 102

31 January 1994 External T.I. 9328595 F - Wind-Up of a Partnership

If the property of a partnership is not distributed at the time it ceases to exist, s. 98(1) will deem the partnership not to have ceased to exist...

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

30 May 1991 T.I. (Tax Window, No. 3, p. 21, ¶1269)

The capital gain referred to in s. 98(1)(c) must be brought into income at the end of the fiscal period after the partnership actually ceased to...

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

88 C.R. - Q.19

The deemed gain arising under s. 98(1)(c) from the disposition of a partnership interest with a negative ACB will be realized at the end 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.

88 C.R. - Q.20

Where a partnership is in receivership, property held for distribution to creditors is considered to be "partnership property" until it is so...

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

Articles

Jack Bernstein, "Real Estate Breakups", Tax Profile, Vol. 6, No. 1, January 2000, p. 1

Includes discussion of techniques for effecting the economic equivalent of the division of assets of partnership.

Fien, "Causes and Effects of the Dissolution and Winding-up of Partnership", 1981 Conference Report, p. 497.

Paragraph 98(1)(a)

Administrative Policy

30 May 1991 Ministerial Correspondence 903074 F - Paragraph 98(1)(c)

In commenting on the time of disposition referred to in s. 98(1)(c) as contrasted to the time that a partnership ceases to exist as described in...

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

Paragraph 98(1)(b)

See Also

Canadian Home Publishers Inc. v. Parker, 2019 ONCA 314

The members of a limited partnership that operated a magazine were an individual who, decades earlier, had provided all the capital before 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 - Other Legislation/Constitution - Ontario - Limited Partnerships Act - Section 24 a limited partner on dissolution can only receive a return of its capital contributions, where s. 24 not overridden 219

Paragraph 98(1)(c)

Administrative Policy

9 August 2017 External T.I. 2017-0709351E5 - Interaction between subsections 98(1) and 116(5)

Does s. 116(5) apply where a non-resident partner of a partnership, whose interest in the partnership is taxable Canadian property, is deemed...

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 116 - Subsection 116(5) gain from negative partnership interest ACB not subject to s. 116(5) 101

Subsection 98(2) - Deemed proceeds

See Also

Mihelakos v. The Queen, 97 DTC 1450 (TCC)

A transaction that was documented in a confusing fashion was characterized as representing a sale by the taxpayer of his 1/2 interest 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 - General Concepts - Evidence 73

Administrative Policy

27 March 2018 Internal T.I. 2015-0592551I7 - Excluded property status of partnership interest

On the winding-up of an Icelandic partnership, it disposed of all its loans for cash, distributed most of its cash to its two partners, made 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 - Income Tax Act - Section 95 - Subsection 95(1) - Excluded Property partnership interests no longer were excluded property on dissolution given prior disposition of s. 95(2)(a)(ii) loans 551
Tax Topics - Income Tax Regulations - Regulation 5908 - Subsection 5908(10) partnership interests no longer were excluded property on dissolution given prior disposition of s. 95(2)(a)(ii) loans/potential qualification of partnership interest under para. (c) ignored 297
Tax Topics - Income Tax Regulations - Regulation 5903 - Subsection 5903(5) - Paragraph 5903(5)(b) foreign affiliate parent cannot carry back FAPLs generated by wound-up foreign affiliate 389
Tax Topics - Income Tax Act - Section 96 Icelandic Sameignarfelag was partnership 198
Tax Topics - Income Tax Act - Section 95 - Subsection 95(2) - Paragraph 95(2)(f.14) once partnership interests were no longer excluded property, the components of their ACB calculation was to be translated at the rates when those components first arose 254

External T.I. 14 July 1999 T.I. 9917685

A Partnership which is held 30% and 70% by FA1 and FA, respectively (which are wholly-owned by Canco) is dissolved on a rollover basis undnr the...

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

21 May 1991 Memorandum (Tax Window, No. 3, p. 22, ¶1256)

Where new partners are found to contribute cash to a partnership which has encountered cash flow problems, and the capital accounts of the old...

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

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

Unless s. 85(3), 98(3) or 98(5) applies, a transfer of property (including work in progress of a professional practice subject to an election...

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

Subsection 98(3) - Rules applicable if partnership ceases to exist

Administrative Policy

7 October 2021 APFF Roundtable Q. 11, 2021-0901011C6 F - Application of subsection 98(3)

Mr. A and Mr. B carried on business in a general partnership, whose most important asset (as to 85% of the total value) was goodwill. 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 98 - Subsection 98(5) a post-wind up drop down transaction would preclude the application of s. 98(5) 200

2017 Ruling 2016-0660321R3 - Reorg of REIT to simplify multi-tier structure

Following the acquisition by a mutual fund trust (the “Fund”) of the limited partner units in, and the shares of the general partner (“GP...

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 132.2 - Subsection 132.2(1) - Qualifying Exchange use of the s.132.2 merger and a renunciation of most of the units otherwise issuable on the merger in order to eliminate a REIT corporate subsidiary held through an LP and a sub-trust 1006
Tax Topics - Income Tax Act - 101-110 - Section 107.4 - Subsection 107.4(2) - Paragraph 107.4(2)(a) s. 107.4 transfer of sub-trust’s assets to sister MFT trust 459
Tax Topics - Income Tax Act - Section 246 - Subsection 246(1) no taxable benefit where wholly-owned partnership renounces the right to have consideration paid for the redemption of its shares in its limited partner (a mutual fund corporation) 325
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Disposition no disposition on conversion of general to limited partnership or adding right of renunciation of a MFT unitholder 165
Tax Topics - Income Tax Act - Section 132.2 - Subsection 132.2(3) - Paragraph 132.2(3)(g) - Subaragraph 132.2(3)(g)(vi) - Clause 132.2(3)(g)(vi)(C) - Subclause 132.2(3)(g)(vi)(C)(I) renunciation by subsidiary partnership of transferee MFT of units that otherwise would be issuable on the redemption of its incestuous holding in transferor MFC 245

10 October 2014 APFF Roundtable Q. 23, 2014-0538171C6 F - 2014 APFF Roundtable, Q. 23 - Winding-up of a partnership

The s. 98(5) rollover is not available where one partnership is wound up into another. What are the consequences of a partnership (SENC) ceasing...

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

6 October 2014 External T.I. 2014-0540611E5 - subsection 98(3) election

Will an election under s. 98(3) be valid and apply to all of a partnership's properties (which were distributed in accordance with the s. 98(3)...

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

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 955 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 97 - Subsection 97(2) partnership is taxpayer for purposes of s. 97(2), which might be used with s. 98(3) 209

16 November 2009 External T.I. 2009-0317591E5 - FX gains/losses when partners assume ptnshp debt

Foreign exchange gains or losses generally can be recognized where foreign-currency denominated debt obligations of a partnership are assumed by...

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 39 - Subsection 39(2) FX gain or loss recognized on FX debt assumption on s. 98(3) wind-up 100

2003 Ruling 2003-0033363 - PARTNERSHIP WIND-UP

Background

Five professional corporations (Aco, Bco, Cco, Dco, and Eco - each wholly-owned by a doctor) are partners in the Partnership, which...

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(21) partition of goodwill following s. 98(3) wind-up of professional partnership 211

5 September 2002 External T.I. 2002-0147315 - PARTNERSHIP AS A PARTNER & 98 (3)

Can s. 98(3) be used where one (or all) of the partners in the particular partnership are themselves partnerships? CRA responded:

Subsection...

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

2000 Ruling 2000-0028423 - partnership dissolution under 98(3)

S. 98(3) would apply to the winding-up of a partnership notwithstanding that the general partner (which was entitled to 0.01% of income 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.

93 CPTJ - Q.13

RC will not depart from the requirement that each former partner receive an appropriate undivided interest in each property distributed on the...

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

18 May 1990 T.I. (October 1990 Access Letter, ¶1470)

The s. 98(3) election is not available when the partners received a divided part of the property of the partnership.

19 September 89 T.I. (February 1990 Access Letter, ¶1112)

If the two corporate partners of a partnership (A and B) dissolve the partnership under s. 98(3), the subsequent amalgamation of the two...

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

88 C.R. - F.Q.22

Where the only asset of a partnership is identical units in another partnership, s. 98(3) requires each partner on dissolution to receive an...

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

84 C.R. - Q.89

even where the only partnership property is identical shares in a corporation, RC cannot accept a pro rata distribution of shares instead of a pro...

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

IT-471R "Merger of Partnerships"

Asssumed liabilities increase ACB of partnership interest

3. ... The adjusted cost base of each partner's interest in the partnership as referred...

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

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

S. 98(3) rollout followed by s. 97(2) roll-in

19. The Act does not contain any special provisions governing the merger of partnerships. However,...

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) 0

Forms

T2060 "Election for Disposition of Property Upon Cessation of Partnership"

Where a former partner is authorized to sign for the purpose of making...

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

Paragraph 98(3)(b)

Administrative Policy

18 May 2004 External T.I. 2004-0069691E5 F - Incorporation des professionnels

A partnership ("SENC"), which had elected under s. 34 respecting its work-in-progress, is wound-up pursuant to s. 98(3), with the partners then...

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 34 insolvency practice carried on by accountants does not qualify as accountancy 79
Tax Topics - Income Tax Act - Section 40 - Subsection 40(2) - Paragraph 40(2)(a) - Subparagraph 40(2)(a)(ii) only s. 40(2)(a)(ii)(A), not (B) or (C), is potentially engaged where transferor is individual 125
Tax Topics - Income Tax Act - Section 249.1 - Subsection 249.1(2) s. 249.1(2) not engaged by virtue only of no income being allocated to the partner 236

Paragraph 98(3)(c)

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 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 97 - Subsection 97(2) object includes ultimate taxation of the deferred gain 234
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

See Also

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 97 - Subsection 97(2) purpose not to tax underlying recapture on subsequent LP unit sale 431
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

Subsection 98(5) - Where partnership business carried on as sole proprietorship

See Also

Canada Life Insurance Company of Canada v. Canada (Attorney General), 2018 ONCA 562

A Canada Life subsidiary (CLICC) had sought to realize an accrued loss on its LP interest in a subsidiary partnership by winding it up. This was...

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 - Rectification & Rescission a transaction resulting from a tax mistake should not be remedied under the Court’s general equitable jurisdiction 459

Canada Life Insurance Co. of Canada v. A.G of Canada, 2015 DTC 5128 [at 6378], 2015 ONSC 281, rev'd 2018 ONCA 562

In order that the applicant ("CLICC") could realize an accrued capital loss on its 99% limited partner interest in a subsidiary limited...

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 - Rectification & Rescission rectification transactions to avoid s. 98(5) rollover contained 2 more transactions than in original plan 383

Stefanson Farms Ltd v. The Queen, 2009 DTC 177, 2008 TCC 682

Pursuant to an agreement dated October 16, 1998, the taxpayer acquired a 99% interest in a partnership from its shareholder effective January 1,...

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 83

Administrative Policy

7 October 2021 APFF Roundtable Q. 11, 2021-0901011C6 F - Application of subsection 98(3)

Mr. A and Mr. B carried on business in a general partnership, whose most important asset (as to 85% of the total value) was goodwill. 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 98 - Subsection 98(3) s. 98(3) could apply to wind-up of partnership with substantial goodwill 156

27 June 2018 External T.I. 2018-0745681E5 F - Wind-up of a partnership

The three members of a family farming partnership ("Partnership") transferred their interests in Partnership to a jointly-owned corporation...

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 84 - Subsection 84(3) no s. 84(3) dividend on cancellation of preferred shares of Opco held by partnership on its wind-up into Opco 165
Tax Topics - Income Tax Act - Section 28 - Subsection 28(1) - Paragraph 28(1)(f) application of s. 28(1)(f) on partnership wind-up 203

15 January 2018 External T.I. 2017-0722961E5 - Winding-up of a partnership

The Partnership, whose 0.01% general partner (GPCo) is wholly-owned by its 99.99% limited partner (LPCo), transfers it business assets (the...

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

2016 Ruling 2016-0651621R3 - Partnership carried on by sole proprietor

Background

Partnership1 (an LP) owes Debt1 to Taxpayer, which is a wholly-owned subsidiary of the limited partner (Holdings) of...

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 53 - Subsection 53(1) - Paragraph 53(1)(e) - Subparagraph 53(1)(e)(iv) ACB increased by assumption of debt owing to partner by partnership 93
Tax Topics - Income Tax Act - Section 80 - Subsection 80(1) - Forgiven Amount - Element B - Paragraph B(a) no forgiven amount where partner assumed debt owing to it by partnership 48

2015 Ruling 2015-0601441R3 - XXXXXXXXXX Partnership - winding up

Current structure

Sub1 and Sub2 (both taxable Canadian corporations and wholly-owned subsidiaries of Parent) are currently the sole partners of 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 - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(c) - Subparagraph 20(1)(c)(ii) interest deductible following assumption of interest-bearing internal debt on s. 98(5) wind-up 297
Tax Topics - Income Tax Act - Section 34.2 - Subsection 34.2(11) continuation of s. 34.2(11) reserve following partnership wind-up 339
Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(m) continued availability of s. 20(1)(m) reserve following s. 98(5) wind-up 296
Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(n) flow-through of s. 20(1)(n) reserve on s. 98(5) wind-up 289
Tax Topics - Income Tax Act - Section 20 - Subsection 20(24) s. 20(24) election on s. 98(5) wind-up 307
Tax Topics - Income Tax Act - Section 18 - Subsection 18(9) s. 18(9) deduction claimable by transferee former partner following s. 98(5) wind-up 241
Tax Topics - Income Tax Act - Section 147.2 - Subsection 147.2(8) s. 147.2 continuity following s. 98(5) wind-up 368
Tax Topics - Income Tax Act - Section 6 - Subsection 6(1) - Paragraph 6(1)(i) no income inclusion on assumption on s. 98(5) wind-up of DSUs and RSUs 356
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Salary Deferral Arrangement - Paragraph (k) no income on RSU/DSU assumption 22

2016 Ruling 2015-0617101R3 - 99(1) and timing of ACB adjustment

The sole limited partner (LPco) transfers it interest in an LP under s. 85(1) to GP, thereby triggering the dissolution of the LP. There was 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 - Income Tax Act - Section 53 - Subsection 53(1) - Paragraph 53(1)(e) - Subparagraph 53(1)(e)(i) ACB of limited partner’s and GP’s interest increased by YTD income on s. 98(6) wind-up arising on GP’s s. 85 purchase of limited partner’s interest 304
Tax Topics - Income Tax Act - Section 99 - Subsection 99(1) year ending with termination was final partnership year 116

13 June 2016 External T.I. 2016-0637031E5 - Capital property excludes ECP

Having regard to utilizing the s. 98(5) “bump,”, does “capital property” include “eligible capital property”? CRA responded:

By virtue...

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 54 - Capital Property definition of capital property effectively excludes eligible capital property 137

S4-F7-C1 - Amalgamations of Canadian Corporations

1.43 …[W] here a Canadian partnership ceases to exist because of an amalgamation involving one or more of the corporate partners:

  • subsection...

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 100 - Subsection 100(2.1) s. 100(2.1) applies to non-qualifying amalgamation 64
Tax Topics - Income Tax Act - Section 111 - Subsection 111(12) application following amalgamation 113
Tax Topics - Income Tax Act - Section 116 - Subsection 116(1) deemed tcp following amalgamation 167
Tax Topics - Income Tax Act - Section 13 - Subsection 13(5.1) continuity of s. 13(5.1) on amalgamation 132
Tax Topics - Income Tax Act - Section 165 - Subsection 165(1) Amalco can continue objection and receive refunds 157
Tax Topics - Income Tax Act - Section 169 Amalco can continue objection 103
Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(n) reserve after amalgamation 62
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Shareholder shareholder need not hold shares 88
Tax Topics - Income Tax Act - Section 251 - Subsection 251(3.1) deemed non-arm's length relationship on amalgamation 172
Tax Topics - Income Tax Act - Section 256 - Subsection 256(7) - Paragraph 256(7)(b) related party, majority and 50% group exceptions 495
Tax Topics - Income Tax Act - Section 40 - Subsection 40(1) - Paragraph 40(1)(a) - Subparagraph 40(1)(a)(iii) reserve after amalgamation 62
Tax Topics - Income Tax Act - Section 66.7 - Subsection 66.7(7) successoring where non-wholly owned amalgamation 109
Tax Topics - Income Tax Act - Section 69 - Subsection 69(13) no disposition of predecessor property on general principles 113
Tax Topics - Income Tax Act - Section 7 - Subsection 7(1.4) s. 87(5) not applicable 112
Tax Topics - Income Tax Act - Section 80.01 - Subsection 80.01(3) non-87 amalgamation/no FX gain 165
Tax Topics - Income Tax Act - Section 84 - Subsection 84(3) no deemed dividend to dissenter on amalgamation 87
Tax Topics - Income Tax Act - Section 85 - Subsection 85(1) election filing by Amalco 109
Tax Topics - Income Tax Act - Section 87 - Subsection 87(1.1) s. 87(1.1) qualifies for all s. 87 purposes 66
Tax Topics - Income Tax Act - Section 87 - Subsection 87(1.2) successoring where non-wholly owned amalgamation 109
Tax Topics - Income Tax Act - Section 87 - Subsection 87(10) deemed listing of temporary Amalco shares 120
Tax Topics - Income Tax Act - Section 87 - Subsection 87(11) gain if high PUC is sub shares 55
Tax Topics - Income Tax Act - Section 87 - Subsection 87(1) presumptive satisfaction of s. 87(1)(a)/dissent and squeeze-outs onside 297
Tax Topics - Income Tax Act - Section 87 - Subsection 87(2) - Paragraph 87(2)(a) new corp/deemed year end coinciding or not with acquisition of control 758
Tax Topics - Income Tax Act - Section 87 - Subsection 87(2) - Paragraph 87(2)(b) Amalco must follow predecessor's valuation method subject to truer picture doctrine 64
Tax Topics - Income Tax Act - Section 87 - Subsection 87(2) - Paragraph 87(2)(c) reserve after amalgamation 113
Tax Topics - Income Tax Act - Section 87 - Subsection 87(2) - Paragraph 87(2)(d) cost amount carryover 149
Tax Topics - Income Tax Act - Section 87 - Subsection 87(2) - Paragraph 87(2)(e.1) s. 100(2.1) applies to non-qualifying amalgamation 64
Tax Topics - Income Tax Act - Section 87 - Subsection 87(2) - Paragraph 87(2)(o) no continuity rule for non-security options 139
Tax Topics - Income Tax Act - Section 87 - Subsection 87(2) - Paragraph 87(2)(q) pre-amalgamation services 106
Tax Topics - Income Tax Act - Section 87 - Subsection 87(2.11) loss-carry back to parent 169
Tax Topics - Income Tax Act - Section 87 - Subsection 87(2.1) dovetailing with s. 88(1.1) 44
Tax Topics - Income Tax Act - Section 87 - Subsection 87(3.1) 346
Tax Topics - Income Tax Act - Section 87 - Subsection 87(3) PUC shifts 189
Tax Topics - Income Tax Act - Section 87 - Subsection 87(4) fractional share cash/ACB or value shift/implied non-recognition for predecessor shares 281
Tax Topics - Income Tax Act - Section 87 - Subsection 87(7) dovetailing with s. 78 and 112(12) 191
Tax Topics - Income Tax Act - Section 87 - Subsection 87(9) allocation of s. 87(9)(c)(ii) excess as parent chooses 230
Tax Topics - Income Tax Act - Section 88 - Subsection 88(1) - Paragraph 88(1)(d) late designation 122
Tax Topics - Income Tax Act - Section 88 - Subsection 88(1.1) dovetailing with s. 87(2.1) 62
Tax Topics - Income Tax Regulations - Regulation 1100 - Subsection 1100(2.2) deemed non-arm's length relationship on amalgamation 467
Tax Topics - Income Tax Regulations - Regulation 1100 - Subsection 1100(2) deemed non-arm's length relationship on amalgamation 371
Tax Topics - Income Tax Regulations - Regulation 1102 - Subsection 1102(14) class continuity on non-arm's length amalgamation 327
Tax Topics - Income Tax Regulations - Regulation 8503 - Subsection 8503(3) - Paragraph 8503(3)(b) pre-amalgamation services 106
Tax Topics - Income Tax Act - Section 249 - Subsection 249(3) 136
Tax Topics - Income Tax Act - Section 22 - Subsection 22(1) 179

8 September 2014 External T.I. 2014-0529231E5 - Partnership to Sole Proprietorship

General description of application of s. 98(5) respecting a farm partnership which would be continued by one of the member sons as a sole...

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

20 September 2012 External T.I. 2012-0452411E5 - Manner of filing 98(5)(c) designations

After stating that a 98(5) designation must be filed with the proprietor's income tax return for the year in which the proprietor received...

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

28 June 2012 External T.I. 2011-0427871E5 F - Application des paragraphes 98(3) 98(5) et 73(1)

Two spouses (Monsieur and Madame) were the members of a farming partnership. Upon their separation the partnership began renting the land. 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 73 - Subsection 73(1) s. 73(1) available on transfer of undivided interest from one separated spouse to the other following s. 98(3) wind-up of their rental partnership 246

25 June 2012 External T.I. 2011-0403001E5 - From Partnership to Sole Proprietorship - CCA

In response to an inquiry as to whether the deeming by s. 98(5) of partnership property to be disposed of before the partnership ceased to exist...

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

31 May 2012 External T.I. 2011-0426091E5 - 98(5) - ptnsp's leasehold int if ptnr is lessor

A partnership was leasing property from a partner, and then is wound up as described in s. 98(5), with the former partner continuing to use the...

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

14 March 2012 External T.I. 2011-0422551E5 F - Application du paragraphe 98(5)

A Canadian-controlled private corporation (CCPC) which operates a seniors residence is leased the residence by a limited partnership of which it...

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

2010 Ruling 2009-0347301R3 - Does s.s. 13(21.2) apply on s.s. 98(5) rollover

Debt owing by a limited partnership to its limited partner is converted into equity; and the limited partnership (which has a large number of...

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

9 July 2009 External T.I. 2008-0275151E5 - Partnership Wind-up

Where a top-tier general partnership holding an interest in a lower-tier partnership is wound-up so that the surviving partner of the former...

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

16 March 2004 External T.I. 2003-0050041E5 F - Fin de société de personnes et 98(5)

Can subsection 98(5) of the Act apply where all the members of a partnership transfer their interest in the partnership to a corporation (that is...

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

17 February 2004 Internal T.I. 2003-0046981I7 F - Paragraphe 98(5) de la Loi

The Directorate essentially repeated the position stated shortly thereafter in 2003-0050041E5 F, namely:

[S]ubsection 98(5) is not applicable …...

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

26 January 2001 External T.I. 2000-0060725 - PARTNERSHIP ROLLOVER

S.98(5) does not apply where the "person" who continues to carry on the business of the former partnership is, itself, a partnership. S.102(2) "is...

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

7 October 1994 A.P.F.F. Round Table, Q. 38, No. 5M08340

"The Department considers that operation of a rental building by a partnership is a business for the purposes of applying subsection 98(5) ... ....

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

5 November 1991 Memorandum (Tax Window, No. 13, p. 2, ¶1587)

No rollover will be available where a partnership ceases to exist as the result of all the corporate partners amalgamating.

27 September 1991 T.I. (Tax Window, No. 11, p. 16, ¶1511)

Trade receivables of a cash basis farming partnership which are outstanding at the time the partnership ceases to exist will not be included in...

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

18 April 1990 T.I. (September 1990 Access Letter, ¶1425)

Where B disposes of its partnership interest to the other partner, A, with the result that the partnership ceases to exist, then in order to...

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

19 September 89 T.I. (February 1990 Access Letter, ¶1112)

Corporations A and B which together carry on a partnership wish to amalgamate. S.98(5) will not apply if prior to the amalgamation A transfers its...

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.35

Where one partner of a two-person partnership dies, RC considers that "immediately before the partnership ceases to exist" is immediately before...

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 Interest - Effects on Adjusted Cost Base Resulting from the Admission or Retirement of a Partner"

Discussion of assumption of mortgage indebtedness by the continuing partner.

Articles

Paul Cormack, Janette Pantry, "Partnership Reorganizations", Canadian Tax Highlights, Vol. 26, No. 6, June 2018, p. 5

If s. 98(5) applies on the basis of one former partner using any property in the business, s. 98(3) will not apply to the other partner (pp....

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

Perry Truster, "Windup-Bump Comparison: Subsections 98(3) and (5)", Tax for the Owner-Manager (Canadian Tax Foundation), Vol. 15, No. 1, January 2015, p. 8.

Bump of real estate inventory (p. 9)

How does subsection 98(5) work when the real estate was inventory to the partnership (which intended to...

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

Subsection 98(6) - Continuation of predecessor partnership by new partnership

Administrative Policy

30 June 2014 External T.I. 2014-0522181E5 F - Legal status of partnership and application of 98(6)

Does s. 98(6) apply when a limited partnership becomes a general partnership following the dissolution of its sole corporate general partner? CRA...

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

9 September 2005 External T.I. 2005-0126771E5 - predeces. partnership by new partnership

In the situation where all the property of the predecessor partnership other than property necessary to "pay out" a retiring partner is...

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

90 C.R. - Q29

Where s. 98(6) applies, any negative ACB of a partnership interest of a member will continue as an element of the ACB of his new partnership...

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. - Q34

Where s. 98(6) applies, any negative adjusted cost base of a partnership interest of a member in the predecessor partnership will be included in...

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"

All of the property" means all the property after the settlement of a retired partner's interest.