6 July 2018 External T.I. 2018-0759521E5 - Tax on split income & preferred beneficiary -- summary under Subsection 104(14)

The definition of split income includes trust income distributions under s. 104(13) but not preferred beneficiary amounts under s. 104(14). Accordingly, where a services partnership that was set up by the partners of an accounting firm earns income from the provision of back office services to the firm, and that income is then allocated in part to a limited partner that is a trust with a preferred beneficiary, the income included in the preferred beneficiary’s income under s. 104(14) will not be subject to the tax on split income.