Brown v. Canada, 2003 DTC 5298, 2003 FCA 192 (FCA) -- summary under Paragraph 96(2.4)(b)

By services, 28 November, 2015

The taxpayer was deemed to be a limited partner by virtue of the fact that within two years of his becoming a general partner, a partnership amending agreement was made which gave the partners the right to retract the partnership units for a cash amount equal to 80% of the original subscription price. Rothstein J.A. stated (at p. 5306):

"If the taxpayer becomes entitled to obtain the benefit within the three years after the taxpayer seeks to deduct partnership losses, the taxpayer will be deemed a limited partner, regardless of whether the benefit itself is obtained immediately or at any time in the future."

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