CRA on s. 75(2) and Contributions of Limited Partnership Interests

In 2013-0476871E5, the CRA commented on whether subsection 75(2) of the Income Tax Act (Canada) applies where a settlor contributes an interest in a limited partnership to a trust and under the terms of the trust the partnership interest may revert to the settlor. The CRA takes the position generally that business income earned by the partnership would not be subject to subsection 75(2), but that property income of the partnership will flow to the trust as income from property thus triggering the application of subsection 75(2).

Prepared by: Asif Abdulla

Asif Abdulla is a partner working out of the Vancouver office of Thorsteinssons LLP. He practices in the area of domestic and international tax planning for individuals, trusts, corporations and other private enterprises with a view to achieving tax efficiency… more »