Section 99

Subsection 99(1) - Fiscal period of terminated partnership

See Also

MacDonellv. MNR, 54 DTC 14 (ITAB)

The withdrawal by the taxpayer from a firm of chartered accountants did not lead to any change in the partnership's fiscal period in light inter alia of a provision in the partnership agreement which provided that "the death or retirement of any partner shall not dissolve the partnership as between the remaining partners". Accordingly, the taxpayer was unable to take advantage of the relieving provisions of s. 34A of the 1948 Act.

Administrative Policy

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

year ending with termination was final partnership year

The sole limited partner (LPco) transfers it interest in an LP under s. 85(1) to the general partner (GPco), thereby triggering the simultaneious termination of the LP and the transfer of its property to GPco.

CRA ruled that, by virtue of s. 99(1) deeming the LP fiscal period to have ended two instants of time before the termination of the LP, the ACB of the transferred partnership interest reflected a proportionate share of LP’s income for the year ending with the termination of LP– and also ruled re the application s. 98(5). CRA also did not dispute the proposition that the deemed year-end caused by 99(1) was for the final taxation year of the LP.

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 284
Tax Topics - Income Tax Act - Section 98 - Subsection 98(5) on a s. 98(5) wind-up, the ACB of the transferor partner’s interest is bumped by YTD income 101

6 January 2014 External T.I. 2013-0477711E5 - Limited partnership losses and dissolution

2 taxation years if s. 98(1)(a) operates to deem partnership to continue after its termination

A sale of assets by a limited partnership before a cessation of its operations resulted in a terminal loss. Before addressing an at-risk amount question, CRA stated:

[P]aragraph 98(1)(a)… generally provides that…the partnership is deemed not to have ceased to exist and a partner is deemed not to have ceased to be a partner until such time as all the partnership property and any property substituted therefor has been distributed to the persons entitled by law to receive it. Nevertheless, unless an election is made under subsection 99(2) of the Act, subsection 99(1)...provides that a fiscal period of a partnership is considered to end immediately before the time that is immediately before the time the partnership ceased to exist. Subsequently, on the distribution of the partnership property there will be another fiscal period end.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 96 - Subsection 96(2.1) partnership termination 118

Subsection 99(2) - Fiscal period of terminated partnership for individual member


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

Sweet, D.J. stated, obiter, that "the end of the term of a partnership and the completion of the winding up of its affairs may not necessarily be concurrent."