{"id":1455,"date":"2015-02-16T16:17:19","date_gmt":"2015-02-16T16:17:19","guid":{"rendered":"https:\/\/thor.ca\/\/blog\/?p=1455"},"modified":"2015-02-16T16:17:19","modified_gmt":"2015-02-16T16:17:19","slug":"cra-says-s-103-and-s-80-did-not-apply-on-sale-of-a-partnership","status":"publish","type":"post","link":"https:\/\/www.thor.ca\/blog\/2015\/02\/cra-says-s-103-and-s-80-did-not-apply-on-sale-of-a-partnership\/","title":{"rendered":"CRA says s. 103 and s. 80 did not apply on sale of a partnership"},"content":{"rendered":"<p>In <a href=\"http:\/\/thor.ca\/blog\/wp-content\/uploads\/2015\/02\/2014-0529981I7.pdf\">2014-0529981I7<\/a>, the CRA Rulings Directorate considered a case where partnership interests and a debt obligation (Particular Note) owed by a partnership were sold mid-year.\u00a0 No portion of the partnership\u2019s loss for the year was allocated to the selling partners.\u00a0 On audit, the local Tax Services Office (TSO) proposed to reallocate a pro rata portion of the partnership\u2019s loss to the selling partners under s. 96(1.01) and s. 103.\u00a0 The TSO also proposed to treat the sale of the Particular Note as engaging the debt-parking rules in s. 80.01.\u00a0 The Rulings Directorate disagreed with the TSO on both accounts.<\/p>\n<ol>\n<li>With respect to the reallocation of the partnership\u2019s loss, s. 96(1.1) does not <em>require<\/em> any particular allocation method.\u00a0 The allocation is governed by the partnership agreement, as contemplated by s. 96(1).\u00a0 In rejecting the proposed assessment under s. 103, the Rulings Directorate cited a 1985 CRA Roundtable Answer where the CRA said that s. 103 should not apply \u201c\u2026in bona fide situations \u2013 that is, where a partner is acquiring an interest with a view to becoming an ongoing member of the partnership\u201d.<\/li>\n<li>The Rulings Directorate further said the debt-parking rules in s. 80.01 were not engaged because at no time did the various owners of the debt obligation deal at arm&#8217;s length with the debtor (i.e., the Partnership).\u00a0 Further, at both times that the Particular Note was acquired by another person the other person was related to the holder of the Particular Note.<\/li>\n<\/ol>\n","protected":false},"excerpt":{"rendered":"<p>In <a href=\"http:\/\/thor.ca\/blog\/wp-content\/uploads\/2015\/02\/2014-0529981I7.pdf\">2014-0529981I7<\/a>, the CRA Rulings Directorate considered a case where partnership interests and a debt obligation (Particular Note) owed by a partnership were sold mid-year.\u00a0 No portion of the partnership\u2019s loss for the year was allocated to the selling&hellip;<\/p>\n","protected":false},"author":11,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9],"tags":[],"class_list":["post-1455","post","type-post","status-publish","format-standard","hentry","category-corporate-tax"],"_links":{"self":[{"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/posts\/1455","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/users\/11"}],"replies":[{"embeddable":true,"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/comments?post=1455"}],"version-history":[{"count":0,"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/posts\/1455\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/media?parent=1455"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/categories?post=1455"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/tags?post=1455"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}