A limited partnership with both resident and non-resident partners, but with its central management and control in Canada (so that it was a “Canadian resident partnership” as defined in s. 248(1)) sold a somewhat small (under 5%) shareholding of a US target company on terms that included an earnout. In finding that the partnership would not satisfy various requirements of IT-426R, para. 2 for use of the cost-recovery method, including the requirement of subpara. 2(e) - that “[t]he vendor submits, with his return of income for the year in which the shares were disposed of, a copy of the sale agreement” - CRA stated:
… T5013 forms … do … not constitute a return of income for the purpose of [subpara. 2(e)] … .