Subsection 103(1) - Agreement to share income, etc., so as to reduce or postpone tax otherwise payable
Cases
Signum Communications Inc. v. The Queen, 88 DTC 6427, [1988] 2 CTC 239, 88 DTC 6427 (FCTD)
S.103 did not apply to limit a limited partner's share of partnership losses to the amount of capital invested by him. "[W]hen there is a...
See Also
Stow v. The Queen, 2010 TCC 406, 2010 DTC 1275 [at 3916]
The taxpayer bought an 80% share of a partnership from his wife's business corporation for $1 million and then reported 80% of the partnership's...
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| Tax Topics - Income Tax Act - 101-110 - Section 103 - Subsection 103(1.1) | 84 |
Jones Development Corp. v. The Queen, 2009 DTC 1452, 2009 DTC 1266
Capital gains realized by a partnership, of which the taxpayer was a partner, as a result of land being disposed of by the partnership which had a...
Penn West Petroleum Ltd. v. The Queen, 2007 DTC 715, 2007 TCC 190
In order to accomplish a sale of two oil and gas properties that were held by a partnership of which the taxpayer was a substantial partner, it...
XCO Investments Ltd. v. The Queen, 2005 DTC 1731, 2005 TCC 655
A partnership owned by the taxpayers admitted a third party ("Woodward") as a member of the -partnership with a view to selling an apartment...
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| Tax Topics - Income Tax Act - Section 245 - Subsection 245(4) | GAAR could be applied to unreasonable partnership allocation | 180 |
| Tax Topics - Income Tax Act - Section 96 - Subsection 96(1) - Paragraph 96(1)(f) | 105 |
MacKinlay v. Arthur Young McClelland Moores & Co., [1989] S.TC 898 (HL)
In discussing the nature of a partnership, Lord Oliver stated (p. 900):
"A partner working in the business or undertaking of the partnership is in...
Administrative Policy
7 October 2016 APFF Roundtable Q. 19, 2016-0655841C6 F - Reimbursement of attributed income
Partner B (a corporation) is assessed under s. 103 on the basis that 40% rather than 10% of the income of the LP should have been included in its...
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|---|---|---|
| Tax Topics - Income Tax Act - Section 74.1 - Subsection 74.1(1) | no domestic secondary adjustment doctrine | 218 |
| Tax Topics - Income Tax Act - Section 69 - Subsection 69(1) - Paragraph 69(1)(b) | excess disposition proceeds not required to be repaid | 91 |
28 October 2014 Internal T.I. 2014-0529981I7 - Allocation of partnership loss to a former partner
The Taxpayer entered into the "Purchase Agreement" for the purchase of a limited partnership (the "Partnership") with substantial current losses...
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| Tax Topics - Income Tax Act - Section 80.01 - Subsection 80.01(6) | underwater debt funnelled through GP to avoid debt parking rules | 296 |
2 December 2014 CTF Roundtable, Q5
Does CRA accept the streaming of certain types of income (e.g., interest income) to a particular partner of a partnership where the partnership...
10 March 2014 Internal T.I. 2013-0493971I7 F - Application of section 120.4
X "split" his professional income with a limited liability partnership (SENCRL) of which one of the partners was a trust for the benefit of...
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|---|---|---|
| Tax Topics - Income Tax Act - 101-110 - Section 103 - Subsection 103(1.1) | allocation of income to partner not responsible for expenses | 302 |
| Tax Topics - Income Tax Act - Section 120.4 - Subsection 120.4(1) - split income - (c) | LP income not from property provision or services | 128 |
2012 Ruling 2011-0421261R3 - Partnership Allocation
A majority of the shares of BCo (a taxable Canadian corporation) are held by ACo (also a taxable Canadian corporation), while the balance of the...
28 December 2011 Internal T.I. 2011-0422791I7 F - Fraction à risque
CRA continues to accept that where a partner has contributed knowledge or know-how to the partnership rather than making a financial contribution,...
10 October 2006 Internal T.I. 2006-0169051I7 - Successor Pool Issues
Adverse comments on a situation where all the income allocable to one of the two partners of a resource partnership comprised income purportedly...
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| Tax Topics - Income Tax Act - Section 66.7 - Subsection 66.7(5) | 89 |
Income Tax Technical News, No. 30, 21 May 2004
Although there is no impediment to the creation of partnership interests that carry different entitlements to share in the income or other...
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| Tax Topics - Income Tax Act - Section 111 - Subsection 111(1) - Paragraph 111(1)(a) | dollar amounts not artificial; parent lossco must have independent income source | 135 |
| Tax Topics - Income Tax Act - Section 111 - Subsection 111(5) - Paragraph 111(5)(a) | 25 | |
| Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(m) | 105 | |
| Tax Topics - Income Tax Act - Section 212 - Subsection 212(1) - Subparagraph 212(1)(b)(vii) | 108 | |
| Tax Topics - Income Tax Act - Section 245 - Subsection 245(4) | 92 | |
| Tax Topics - Income Tax Act - Section 96 - Subsection 96(1) - Paragraph 96(1)(f) | 155 | |
| Tax Topics - Income Tax Act - Section 96 - Subsection 96(1) - Paragraph 96(1)(g) | 36 |
25 March 1997 T.I. 963490
The use of a services partnership (the members of which includes inter vivos trusts for the benefit of members of the families of various members...
2 August 1995 Internal T.I. 7-951344
S.103(1) or (1.1) likely would apply where a corporation that was carrying on an R&D project formed a general partnership, transferred its assets...
Rulings Directorate Discussion and Position Paper on Motion Picture Films and Video Tapes as Tax Shelters, Version 29/3/93 930501 (C.T.O. "Motion Picture Films - C.C.A.")
"Revenue Canada could argue that it is not reasonable to allocate to the limited partners the losses referable to the partnership property for...
92 C.R. - Q.13
Whether or not a partnership is used for estate-freezing purposes, the allocation of income should recognize the partners' respective capital and...
30 November 1991 Round Table (4M0462), Q. 6.1 - Contribution of Knowledge vs. Financial Contribution (C.T.O. September 1994)
A payment made, or a credit made to a partner's 'capital' account, in consideration of its commitment to perform work for the partnership will be...
91 C.R. - Q.4
One of the considerations in determining the reasonableness of profit allocation is any personal use by a partner of partnership property.
17 July 1991 T.I. (Tax Window, No. 6, p. 14, ¶1356)
A minimum return on capital paid to a partner may be considered interest income of the partner even though no deduction is available to the...
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| Tax Topics - Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(c) | 28 |
90 C.P.T.J. - Q.8
Generally partnership agreements provide for the sharing of profits and losses on the same basis from year to year, and any deviation from this...
88 C.R. - Q.18
RC will not ordinarily apply s. 103 to challenge an allocation where it is clear that the profits and losses of the partnership are determined...
79 C.R. - Q.36
Generally, partnership agreements provide for the sharing of profits and losses on the same basis, and a deviation from this pattern should be...
IT-338R, para. 4
RC generally will accept the sharing of profits and losses on a basis which takes into account that one of the partners received his partnership...
IT-138R "Computation and Flow-through of Partnership Income"
Salaries paid by a partnership to its members are a method of distributing partnership income. Such distributions are to be allocated as taxable...
Subsection 103(1.1) - Agreement to share income, etc., in unreasonable proportions
Cases
Filion v. Canada, 2004 DTC 6579, 2004 FCA 135
There was no patently unreasonable error in the finding of the Tax Court judge that the individual taxpayer had income of the partnership...
See Also
Paajanen v. The Queen, 2011 DTC 1229 [at 1333], 2011 TCC 310 (Informal Procedure)
The taxpayers were a married couple. Mrs. Paajanen ran a retail business, and formed a partnership with her sister, whose husband had died and...
Stow v. The Queen, 2010 TCC 406, 2010 DTC 1275 [at 3916]
The taxpayer bought an 80% share of a partnership from his wife's business corporation for $1 million and then reported 80% of the partnership's...
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|---|---|---|
| Tax Topics - Income Tax Act - 101-110 - Section 103 - Subsection 103(1) | 80 |
Krauss v. The Queen, 2009 DTC 1394 [at 2155], 2009 TCC 597
The taxpayer and her son transferred real estate on a rollover basis to a partnership in consideration for Class A units of the partnership having...
Fraser v. The Queen, 97 DTC 1305 (TCC)
The taxpayer borrowed $707,000 from a bank, contributed this sum to a partnership between her, her husband and her sister (but without any...
Archbold v. The Queen, [1995] 1 CTC 2872 (TCC)
A partnership between the taxpayer and his wife provided that she was to receive a commission equal to 10% of sales, and 30% of residual profits,...
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|---|---|---|
| Tax Topics - Income Tax Act - Section 96 - Subsection 96(1) - Paragraph 96(1)(g) | 45 |
Administrative Policy
9 October 2015 APFF Roundtable Q. 18, 2015-0595821C6 F - Ss. 96(1.01) and s. 103
On September 1, 2015, Mr. X, who held 50% of the units of an LP (“SENC”), transferred his units to a wholly-owned corporation ("Xco"). On...
9 October 2015 APFF Roundtable Q. 13, 2015-0595781C6 F - Reimbursement of attributed income
Most of the income of a partnership has been allocated and distributed to a partner which is a personal trust, but CRA reallocates most of such...
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| Tax Topics - Income Tax Act - Section 15 - Subsection 15(1) | no secondary adjustments are required for the operation of most income attribution provisions | 132 |
10 March 2014 Internal T.I. 2013-0493971I7 F - Application of section 120.4
X "split" his professional income with a limited liability partnership (SENCRL) of which one of the partners was a trust for the benefit of...
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| Tax Topics - Income Tax Act - 101-110 - Section 103 - Subsection 103(1) | income-splitting partnership terms | 131 |
| Tax Topics - Income Tax Act - Section 120.4 - Subsection 120.4(1) - split income - (c) | LP income not from property provision or services | 128 |
80 C.R. - Q.40
RC will challenge income allocation where one spouse neither actively engages in or invests his or her property in the partnership business.
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| Tax Topics - Income Tax Act - Section 67 | 8 |