Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
Principal Issues:
Prior opinion given that this taxpayer would be grandfathered from the application of our new position re: acb of partnership interest calculation.
Position:
Prior opinion letter rescinded.
Reasons:
While the matter of grandfathering is under review, the prior opinion is no longer valid.
961413
XXXXXXXXXX Allan Nelson
(613) 957-9768
Attention: XXXXXXXXXX
April 24, 1996
Dear Sirs:
Re: XXXXXXXXXX (the "Partnership")
Calculation of Partnership Interest Adjusted Cost Base
We are writing with respect to our letter to you dated November 27, 1995 (our file #952849), concerning the method of calculating the adjusted cost base of a member of the Partnership.
In our earlier letter, we noted the Partnership had not obtained an advance income tax ruling in contemplation of issuing its units. We also gave our opinion that for partnership interests in the Partnership acquired prior to July 28, 1995, subparagraphs 53(1)(e)(i) and 53(2)(c)(i) of the Act would apply such that a partner's share of partnership income or losses incurred in respect of a particular fiscal period would be included in computing the adjusted cost base of their partnership interest at the end of that fiscal period. These comments were given notwithstanding the Department's revised position outlined in Income Tax Technical News No. 5, dated July 28, 1995.
As a result of the many difficult situations presented to us since that time, the entire issue of grandfathering arrangements from the application of our revised position has become more complicated than originally perceived. Consequently, we have undertaken a comprehensive review of grandfathering and, until this review is completed, we find it necessary to rescind our November 27 letter to you. However, due to the fact that many limited partners have filed, or will shortly file, their 1995 income tax returns, we will allow the grandfathering for the 1995 taxation year.
We apologize for any inconvenience we may have caused you.
Yours truly,
Chief
Partnerships Section
Resources, Partnerships & Trusts Division
Income Tax Rulings and Interpretations Directorate
Policy and Legislation Branch
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