Income Tax Act — I-3.3 96
he taxpayer’s income for previous taxation years. Right deemed not to be capital property (1.4) For the purposes of this Act, a right to a share of the income or loss of a partnership under an agreement referred to in subsection 96(1.1) shall be deemed not to be capital property. Disposition by virtue of death of taxpayer (1.5) Where, at the time of a taxpayer’s death, the taxpayer has a right to a share of the income or loss of a partnership under an agreement referred to in subsection 96(1.1), subsections 70(2) to 70(4) apply. Members deemed carrying on business (1.6) If a partnership carries on a business in Canada at any time, each taxpayer who is deemed by paragraph (1.1)(a) to be a member of the partnership at that time is deemed to carry on the business in Canada at that time for the purposes of subsection 2(3), sections 34.1 and 150 and (subject to subsection 34.2(18)) section 34.2. Gains and losses (1.7) Notwithstanding subsection (1) or section 38, if in a particular taxation year of a taxpayer, the taxpayer is a member of a partnership with a fiscal period that ends in the particular year, the amount of a taxable capital gain, allowable capital loss or allowable business investment loss of the taxpayer for the particular year determined in respect of the partnership is the amount determined by the formula A × B/C where A is the amount of the taxpayer’s taxable capital gain, allowable capital loss or allowable business investment loss, as the case may be, for the particular year otherwise determined under this section in respect of the partnership; B is the relevant fraction that applies under paragraph 38(a), (a.1), (a.2), (b) or (c) for the particular year in respect of the taxpayer; and C is the fraction that was used under section 38 for the fiscal period of the partnership. Application (1.71) Where the fraction referred to in the description of C in subsection (1.7) cannot be determined by a taxpayer in respect of a fiscal period of a partnership that ended before February 28, 2000, or includes February 28, 2000 or October 17, 2000, for the purposes of subsection (1.7), the fraction is deemed to be (a) where the fiscal period ended before or began before February 28, 2000, 3/4; (b) where the fiscal period began after February 27, 2000 and before October 18, 2000, 2/3; and (c) in any other case, 1/2. Loan of property (1.8) For the purposes of subsection 56(4.1) and sections 74.1 and 74.3, where an individual has transferred or lent property, either directly or indirectly, by means of a trust or by any other means whatever, to a person and the property or property substituted therefor is an interest in a partnership, the person’s share of the amount of any income or loss of the partnership for a fiscal period in which the person was a specified member of the partnership shall be deemed to be income or loss, as the case may be, from the property or substituted property. Construction (2) The provisions of this Subdivision shall be read and construed as if each of the assumptions in paragraphs 96(1)(a) to 96(1)(g) were made. Tiered partnerships (2.01) For the purposes of this section, a taxpayer includes a partnership. Limited partnership losses (2.1) Notwithstanding subsection 96(1), where a taxpayer is, at any time in a taxation year, a limited partner of a partnership, the amount, if any, by which (a) the total of all amounts each of which is the taxpayer’s share of the amount of any loss of the partnership, determined in accordance with subsection 96(1), for a fiscal period of the partnership ending in the taxation year from a business (other than a farming business) or from property exceeds (b) the amount, if any, by which (i) the taxpayer’s at-risk amount in respect of the partnership at the end of the fiscal period exceeds the total of (ii) the amount required by subsection 127(8), 127.44(11), 127.45(8), 127.48(12), 127.49(8) or 127.491(12) in respect of the partnership to be added in computing the investment