A hedge fund LP fund invests most of its assets in highly speculative securities. Can (passive) limited partners still make elections under s. 39(4)? CRA responded (TI translation):
[A] limited partner of an LP will be considered to be carrying on the business of the LP in applying subsections 39(4) and 39(5). The determination of whether a partner is a taxpayer described in subsection 39(5) is a question of fact… . [P]aragraph 11 of… IT-479R…contains information that could be useful in determining…whether a limited partner of an LP in the described situation is a trader or dealer in securities for the purposes of subsection 39(5).