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...
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| Tax Topics - Income Tax Act - Section 54 - Adjusted Cost Base | 78 |
See Also
Osfc Holdings Ltd. v. R., 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...
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...
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...
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...
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...
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|---|---|---|
| Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(l) | 41 |
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...
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...
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....
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...
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...
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...
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|---|---|---|
| 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...
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|---|---|---|
| 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...
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...
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...
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...
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...
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...
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| 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...
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|---|---|---|
| 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. R., 97 DTC 1450, [1997] 3 C.T.C. 2975 (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...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - General Concepts - Evidence | 73 |
Administrative Policy
2 November 2023 APFF Financial Strategies and Instruments Roundtable Q. 5, 2023-0978561C6 F - Partnership – distribution of a life insurance police
Regarding the situation where a partnership held, was the beneficiary of, and paid the premiums for 10 years on, three policies on the lives of...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 148 - Subsection 148(7) | s. 98(2) generally prevails over s. 148(7) | 103 |
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(35) | holding of policy by partnership prior to its distribution to partner does not count towards the latter’s holding period | 113 |
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...
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| 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...
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...
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| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Disposition | 91 |
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...
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|---|---|---|
| Tax Topics - Income Tax Act - Section 34 | 0 | |
| Tax Topics - Income Tax Act - Section 85 - Subsection 85(1) | 0 | |
| Tax Topics - Income Tax Act - Section 85 - Subsection 85(2) | 0 |
Subsection 98(3) - Rules applicable if partnership ceases to exist
Administrative Policy
29 September 2022 External T.I. 2021-0882411E5 - Partnership wind-up - life insurance
Where a partnership holding an exempt life insurance policy on the life of individual partners is wound up as described in s. 98(3) or 98(5), can...
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| Tax Topics - Income Tax Act - Section 148 - Subsection 148(7) | the s. 98(3) or (5) rollover provisions can apply to a distribution on the partnership winding-up of a life insurance policy | 170 |
| Tax Topics - Income Tax Act - Section 98 - Subsection 98(5) | s. 98(5) precludes a gain under s. 148(7) | 122 |
2021 Ruling 2021-0895071R3 F - Partnership Reorganization
Background
Fund LP (a Canadian partnership) holds investments including the “Rollover Shares” (with accrued gains) and “Non-Rollover...
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| Tax Topics - Income Tax Act - Section 40 - Subsection 40(3.3) | refusal to rule where shares received on LP s. 98(3) wind-up immediately sold to Carry LP owned by owners of former general partner | 345 |
| Tax Topics - Income Tax Act - Section 40 - Subsection 40(3.12) | no s. 40(3.12) ruling given re loss on fund LP wind-up | 380 |
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...
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| 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...
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| 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...
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)...
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....
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| 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...
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|---|---|---|
| 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...
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|---|---|---|
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(21) | partition of goodwill following s. 98(3) wind-up of professional partnership | 211 |
28 October 2002 External T.I. 2002-0134785 F - Partitioning of Shares
A partnership, holding 25 investments in public companies and mutual fund trust (MFT) units, was dissolved such that each CCPC received a pro rata...
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|---|---|---|
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(21) | s. 248(21) could apply to partitioning a share if the corporation could issue fractional shares on the partition satisfying the FMV test, and similarly for partitioning MFT units (viewed as a single property) | 301 |
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Property | interest in trust is a single property even if held as units | 90 |
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(20) | s. 248(20) might apply if a partition results in the issuance of whole shares | 177 |
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...
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...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 53 - Subsection 53(1) - Paragraph 53(1)(e) - Subparagraph 53(1)(e)(iv) | 38 | |
| Tax Topics - Income Tax Act - Section 53 - Subsection 53(1) - Paragraph 53(1)(e) - Subparagraph 53(1)(e)(iv) | 82 | |
| Tax Topics - Income Tax Act - Section 9 - Capital Gain vs. Profit - Real Estate | capital property retained that character on s. 98(3) wind-up | 43 |
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...
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.
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Disposition | 29 |
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...
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|---|---|---|
| Tax Topics - Income Tax Act - Section 98 - Subsection 98(5) | 68 |
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...
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...
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...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 53 - Subsection 53(1) - Paragraph 53(1)(e) - Subparagraph 53(1)(e)(iv) | 38 | |
| Tax Topics - Income Tax Act - Section 97 - Subsection 97(2) | 75 |
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,...
| 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...
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...
| 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...
| 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...
| 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...
| 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...
| 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,...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - General Concepts - Substance | 83 |
Administrative Policy
29 September 2022 External T.I. 2021-0882411E5 - Partnership wind-up - life insurance
Where a partnership holding an exempt life insurance policy on the life of individual partners is wound up as described in s. 98(3) or 98(5), can...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 148 - Subsection 148(7) | the s. 98(3) or (5) rollover provisions can apply to a distribution on the partnership winding-up of a life insurance policy | 170 |
| Tax Topics - Income Tax Act - Section 98 - Subsection 98(3) | s. 98(3) rollover provisions take precedence over s. 148(7) | 121 |
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...
| 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...
| 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...
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...
| 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...
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...
| 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...
| 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...
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...
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...
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...
| 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...
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...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 69 - Subsection 69(1) - Paragraph 69(1)(b) | 89 |
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...
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...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 13 - Subsection 13(21.2) | 122 |
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...
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...
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 …...
15 May 2002 External T.I. 2001-0107805 F - PLUSIEURS ENTREPRISES
A partnership with three members (A. B and C) was carrying on four businesses. A and B transferred their partnership interests to a new...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Statutory Interpretation - Interpretation Act - Subsection 33(2) | reference to “the” business included all the businesses | 57 |
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...
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) ... ....
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...
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...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 53 - Subsection 53(1) - Paragraph 53(1)(e) - Subparagraph 53(1)(e)(i) | 112 |
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...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 98 - Subsection 98(3) | 33 |
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...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 53 - Subsection 53(1) - Paragraph 53(1)(e) - Subparagraph 53(1)(e)(iv) | 43 |
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.
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 53 - Subsection 53(1) - Paragraph 53(1)(e) - Subparagraph 53(1)(e)(iv) | 52 |
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....
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...
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...
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...
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...
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...
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.