Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CCRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ADRC.
Principal Issues:
ACB adjustment to partnership interest on winding-up because year end is XXXXXXXXXX and for business reasons the partnership can't terminate immediately after year end.
Position: Give 53(1)(e)(i) ruling
Reasons:
Administrative relief to avoid double taxation and take in oversight on original ruling request
XXXXXXXXXX 2002-015129
XXXXXXXXXX, 2002
Dear XXXXXXXXXX:
Re: Advance Income Tax Ruling
XXXXXXXXXX
This is in reply to your letter of XXXXXXXXXX, and is supplemental to our advance income tax ruling number 2002-013306 dated XXXXXXXXXX, 2002 (the "Ruling").
As a result, the following changes are made to the Ruling:
1. Terms defined in the Ruling as having certain meanings have the same meaning when used in this letter and in addition the term "ACB" will be inserted immediately following the definition of the term "Act". The term "Termination year" will be inserted following the definition of the term "Taxable Canadian corporation".
"ACB" means adjusted cost base as that term is defined in section 54 of the Act.
"Termination year" means the taxation year ending immediately before the winding up described in paragraph 13 below.
2. The following will be inserted immediately following Ruling F:
"G. Subparagraphs 53(1)(e)(i) and 53(2)(c)(i) of the Act, as the case maybe, will be applied to a Partner who holds an interest in the Partnership so that, for the purposes of determining the ACB of a Partner's interest in the Partnership immediately before the winding up of the Partnership within the meaning of subsection 85(3) of the Act, any portion of the Partnership's income or loss for tax purposes for the fiscal period ending immediately before its winding up that is allocated to a Partner in respect of its Termination year, will be included in calculating the ACB of a Partner's interest in the Partnership immediately before the winding up of the Partnership."
We confirm that the Ruling remains binding on the Canada Customs and Revenue Agency subject to the same limitations and qualifications set out therein.
Yours truly,
XXXXXXXXXX
for Director
Financial Industries Division
Income Tax Rulings Directorate
Policy and Legislation Branch