The partnership with three principal partners (Partners 1, 2 and 3, all corporations) filed an amended T5013, requesting an increase in capital cost allowance and cumulative eligible capital deductions, so as to change the partnership’s reported income to a loss for 2012, following the passage of the three year period under s. 152(1.4). CRA made no such determination.
The partners requested that their respective 2012 returns be amended to reflect their share of the partnership loss. CRA only accepted this request for Partner 2 whose taxation year (unlike Partners 1 and 3) was not statute-barred.
The Directorate indicated that in situations where the Minister has not made a determination of partnership income or loss under s. 152(1.4) and the three-year limitation period specified therein has expired, the Minister may only make a determination under s. 152(1.4) where one of the exceptions specified in s. 152(4) applies, e.g., a timely waiver. However, the receipt of a request to amend a T5013 return can be taken into account to assess the returns of the partners directly if they are not statute-barred.
The presented situation also involved Partner 1then asking CRA to amend its income tax return to reflect the partnership loss and remove the deduction for a non-capital loss from a prior taxation year that was originally claimed. The changes would not result in any change to taxable income (i.e., taxable income would remain nil). The Directorate stated:
[I]n a situation where a taxpayer has been issued a notification that no tax is payable and the requested changes will not result in tax payable, the Minister may consider the request to amend the return because the change does not require the Minister to reassess the taxpayer. … Whether the Minister agrees to the request would depend on the particular facts of the situation.