On the Allocation and Distribution of Losses from a Partnership
Abstract
Due to the flow-through nature of partnerships, taxpayers can utilize partnership arrangements for the purposes of tax sheltering.?Where the taxpayer is a limited partner in a partnership, subject to certain restrictions, business losses of the partnership can be utilised by the limited partner to reduce their taxable income from other sources.?Similarly, although not the primary focus of this paper, certain allocations of income from a partnership can also be utilized to reduce a taxpayer’s overall tax burden.
This paper is directed to those who do not, or do not frequently, interact with partnerships, and provides an introductory look at how income or loss allocations from a partnership can benefit its partners.?While there are only a hand full of judicial opinions on allocation of income from a partnership, this paper will use a small selection of those opinions as cautionary guidelines for over-exuberant tax planning structures.
In an effort to reduce complexity, implications related to tiered partnerships will not be addressed in this paper; similarly, implications which may be connected to the various Partnership or Limited Partnership Acts, are also not covered.
????I.???????????????Introduction
Unlike corporations, partnerships are not taxpayers.?Rather, earnings or losses generated by partnerships are allocated and distributed to the partnership’s members (partners), and, pursuant to the Act,[1] are then included in the partners’ own income calculations for the purposes of taxation.[2]?
Prior to 1972, an “area where the use of a partnership … permitted considerable flexibility [was] in the ability to split incomes … [and i]t would appear that the draftsmen of the legislation recognized these possibilities as potential areas for tax avoidance.”[3]?That partners can allocate the partnership’s income and losses amongst themselves remains a beneficial feature of a partnership today.?Practically speaking, the allocation of income from a partnership is as agreed to by the partners, whether express in the partnership agreement or otherwise;[4] accordingly, losses are also allocated to the partners.[5] ?To this point, it should be noted that the Act permits the Minister to make adjustments where the allocations are found to be unreasonable.[6]
Where the partner receiving the allocation is a taxpayer,[7] the taxpayer can then claim its own further deductions against the income received from the partnership.?In this way, conducting business through a partnership, as opposed to through an incorporated entity, may offer certain tax advantages.
??II.???????????????Partnership Basics
Partnerships, as a means to carry on a business, are substantially older than the existence of incorporated entities and modern legislation.[8] ?Even though they are now subject to a number of restrictions by way of the interplay between the evolution of the common law and legislation,[9] partnerships remain a very viable means through which many taxpayers pursue business endeavours.
A partnership exists when two or more parties[10] carry on business in common with a view to profit.[11]?Importantly, the realization of profit is not a legal requirement for a partnership’s existence.[12]?Business ventures frequently experience large amounts of losses during the start-up phase, or during an expansionary phase, but the same does not mean a partnership does not exist.[13]?On a related note, the Supreme Court of Canada has held that “upon the entry of a new partner, the criteria of a valid partnership must be reaffirmed in order for the partnership to continue”.[14]
For the purposes of taxation, partnerships are flow-through entities.[15]?Losses incurred by a partnership in the course of its’ carrying on business, are applied against income generated by the partnership at the partnership level, then, the amount of income or loss is allocated to the partners; the partner, who is a taxpayer,[16] will then include the distribution on its own income tax filing, where such distribution may also be utilized in conjunction with the taxpayer’s other sources of income or loss as permissible by the Act.[17]
Where a partnership is a limited partnership, limited partners do not take part in the management or operations of the partnership, nor do they otherwise contribute their services to the business.[18]?It is in limited partnership arrangements where taxpayers can reduce their income through the utilization of tax sheltering arrangements provided the taxpayer is a limited partner.[19]
?III.???????????????Determining Loss Allocations and Distributions
As noted above, the existence of partnerships extends significantly back into the history of taxpayers carrying on of businesses in any form other than as a sole proprietor.?As such, partnerships are creatures shaped primarily through the evolution of the common law, and are only more recently curtailed by after-imposed legislative frameworks.[20]?Notably, and unlike other pieces of legislation which always apply,[21] the provisions contained in various provincial Partnership Acts can be contracted out of by way of agreement(s) amongst the partners.[22]?Accordingly, there continue to be no determinative or codified rules as to how losses of a partnership are principally allocated or distributed to the partners,[23] although there are provisions in the Act aimed at curtailing the unfettered steaming of losses through to the partners, and specifically to the limited partners.[24]
While there is no such requirement, a framework for the division and allocation of losses and profits from a partnership may be contained within the provisions of a comprehensively drafted partnership agreement.[25]?Where a partnership agreement lacks such provisions, or there is no partnership agreement at all, it may seem reasonable to understand the division and allocation would proceed in accordance with each partner’s proportion of capital contributed to the partnership.[26]?However, as each partner’s contribution to a partnership may not be purely, or even largely, in the form of a capital contribution, division and allocation on this basis may not be appropriate.[27]?Further, according to the Supreme Court of Canada, the determination of profit for the purposes of taxation is a question of law rather than fact.[28]
To this end, in the absence of an agreement amongst the partners as to how losses from a partnership are to be allocated during the partnership’s fiscal period, or over the life of the partnership, allocations to partners may be made on differing bases from year to year,[29] as there is also no requirement for allocations or distributions to be consistent.?Moreover, and even where existing agreements are in place regarding allocations and distributions, partners are free to create unorthodox means of dividing the profits and assets of a partnership without invalidating such existing agreements.[30]
Notwithstanding the foregoing, the determination of allocations and distributions from a partnership are not completely free of legal encumbrances.?The at-risk rules contained in section 96 were introduced to provide certain limitations to the allocation and distribution of limited partnership losses to limited partners,[31] and have been amended several times since their original implementation.[32]
Further, and as noted above, where the Minister is of the view that income from a partnership has been shared in unreasonable proportions, which necessarily includes arrangements made principally for tax reasons,[33] the Act permits a reallocation accordingly.[34]?
Nevertheless, and “[i]rrespective of when [during a partnership’s fiscal period] a partner enters the partnership …, provided [the partner] is a partner at the end of the taxation year [fiscal period], the loss of the partnership … is the loss of the partner”.[35]
Understandably, it is more often to which taxpayer a limited partnership’s losses are allocated and distributed, or what losses from other sources the taxpayer may apply against its share of the partnership income[36] that is likely to trigger the Minister’s attention and result in a reallocation.
More recently, both the Tax Court and the Federal Court of Appeal have raised whether a partner who has left the partnership during the fiscal period might also be eligible for an allocation or distribution from that partnership on the basis of the language contained in subsection 96(1.01).[37]
?IV.???????????????To Calculate a Partner’s Adjusted Cost Base (ACB) and At-Risk Amount (ARA)
In order to evaluate a limited partnerships’ most tax advantageous allocation arrangement in any given period, and therefore possible distributions, it is necessary to understand how a limited partner’s adjusted cost base and at-risk amount are determined.
The rules for calculating a Partner’s ACB and ARA are contained in sections 53 and 96 of the Act, respectively.?The timing of the inclusion of income is the key difference between a partner’s ACB and ARA.[38]?
A partner’s ACB is the cumulative contributions the partner has made to the partnership, plus the income allocated to the partner in the previous fiscal periods, less the cumulative distributions to the partner, less the losses allocated to the partner in the previous fiscal periods.[39]?
Accordingly, income allocations in the current fiscal period increase a partner’s ACB in the partnership in the next fiscal period.?Income allocated in the current fiscal period plus a partner’s ACB is a partner’s ARA for the current fiscal period.[40]?
Amounts of losses distributed from a partnership may only be utilized against a partner’s positive ARA; losses in excess of a partner’s ARA may be carried forward and applied against a partner’s future ARA once it becomes positive.[41] ?Thus, a partner’s losses are limited by the ARA to the amount of the partner’s capital actually at risk in the partnership.
Also worth noting is that where a partner’s ACB is negative at the end of the fiscal period, the partner becomes liable for a capital gain on the negative amount,[42] following which, the partner’s ACB is then reset to 0.?When a partner’s ACB is positive in the future, the partner may make an election to recognize a capital loss on the positive amount, and apply that loss against the previous capital gain provided the loss occurs within 3 years of the recognized capital gain.[43]
??V.???????????????When the Minister Disagrees
Even where the foregoing approximate guidance regarding the distribution of limited partnership losses is defensibly followed, section 103 of the Act may still be applied by the Minister after the fact if the loss allocation or income distribution seems unreasonable in the circumstances.?To this point, the Federal Court of Appeal has confirmed that “[i]t may often be reasonable to allocate taxable income to … partners at year end, but it [is] not reasonable [where] the transactions that [take] place are devoid of any material substance except for the “deal fee”.”[44]?
(1)???????????Where the members of a partnership have agree to share, … any income or loss of the partnership … or any other amount … that is relevant to the computation of the income or taxable income of any of the [partners], and the principal reason for the agreement may reasonably be considered to be the reduction or postponement of the tax … payable under this Act, the share of each member of the partnership in the income or loss, … is the amount that is reasonable having regard to all the circumstances …
(1.1)??????Where two or more members of a partnership who are not dealing with each other at arm’s length agree to share any income or loss of the partnership … that is relevant to the computation of income taxable income of those [partners] and the share … is not reasonable in the circumstances having regard to the capital invested in or work performed …, that share shall, … be deemed to be the amount that is reasonable in the circumstances.
Subsection 103(1) was enacted when the Act came into force in 1972.[47]?The Federal Court of Appeal has said the “object, sprit or purpose … is relatively clear – it is to counter tax avoidance arrangements in which partners agree to share income principally for tax reasons and the resulting allocation is unreasonable taking all the circumstances into account.”[48]
Further, the Federal Court of Appeal has also laid out the two step procedure for the operation of subsection 103(1) as:
Having found that subsection 103(1) applies because there is a sharing of income and the principal reason for the agreement was the reduction of tax otherwise payable, … the second question [is] … whether the allocation of income to the partners [is] unreasonable.[49]
[emphasis original]
Importantly, “[w]here a specific anti-avoidance section covers a transaction but does not in the Minister’s view provide a remedy the Minister considered sufficient, [the GAAR][50] is not there to permit the Minister to top up the remedy that the Minister believes to be inadequate.”[51]
To put it another way, as section 103 provides specific anti-avoidance rules regarding unreasonable proportions of income sharing amongst partners,[52] section 245 is not also available for application by the Minister.[53]
At discussed above, there are no formal rules, codified or otherwise, as to how partnership revenue is to be apportioned between the partners, and the apportionment may change between a partnership’s fiscal years.[54]?Undeniably, certain situations and factual matrices may be more likely to attract the attention of the Minister.
As would be expected, and as is the case with any transaction that occurs between parties who do not deal with each other at arm’s length, such as the family members in Fillion c. R.,[55] where it appears “the only criterion taken into account [are the various taxpayers’] tax rate[s] and that the work performed [has] absolutely no bearing on the income sharing”,[56] the constellation of facts will almost certainly fail the reasonableness test of the provision.[57]?
However, section 103 does not reserve scrutiny by the Minister only for non-arm’s length transactions; due to the flexibility inherent in partnerships, even in situations where parties do deal at arm’s length, the Minister may take issue with how the proportions of a partnership’s income are shared amongst the partners.
In XCO Investments Ltd. v. R.,[58] Woodwards, a company with substantial non-capital losses on its balance sheet, joined a partnership and was provided with the right to 80% of an existing partnership’s income distributions.?While Woodwards had provided a capital contribution equal to its 80% share of the partnership’s equity, its contribution was effectively risk free; by agreement amongst the partners, Woodwards’ capital contribution was not released from escrow to the partnership until after Woodwards’ had received it share of the distribution, being an amount which served to cover Woodwards’ capital contribution.[59]?Woodwards’ participation was also found to be ephemeral on that it transferred its interest in the partnership to another partner shortly following the partnership’s fiscal period in which the foregoing transactions took place.[60] ?While the partnership was valid at law,[61] Woodwards’ participation in the partnership was found to be tax-motivated,[62] which, as pointed out by the Tax Court, “is exactly what subsection 103(1) is there for.”[63]
In Stow v. R.,[64] the taxpayer joined an existing partnership, which had unrealized losses, by purchasing an existing partner’s interest; the losses were then proportionately distributed to the taxpayer shortly after he joined the partnership.[65]?Accordingly, the Minister’s position was that the taxpayer only entered the partnership to utilize the losses.[66]?However, unlike Woodwards in XCO, the taxpayer in Stow remained a partner.[67]?Further, the court in Stow accepted that the taxpayer was not principally motivated to join the partnership for gaining access to the existing partnership losses.[68]
In both of the foregoing matters, larger examinations of certain taxpayers’ affairs led to, and therefore included, the section 103 assessments discussed.[69]?The Court in Stow noted that in XCO (and a subsequent subsection 103(1) decision, Penn West Petroleum Ltd. v. R.[70]), the factual situation was complex, and typical of those clever schemes to produce tax benefits.?Furthermore, unlike in Stow, the other matters included “agreements between the existing partners and the new partners [which] skewed dramatically the originally agreed-to allocations to achieve a specific tax benefit for at least one of the parties under the partners’ agreement[s]”.[71]
Interestingly, it is worth noting that section 103 may also be operable in combination with subsections 96(1.01) and 96(1.1), which address income allocation to a former partner, and allocation of share income to a retiring partner, respectively.?Although we do not yet have any fulsome judicial consideration, the interaction of paragraph 96(1.01)(a) and subsection 103(1) was brought up in 594710 British Columbia Ltd. v. R.;[72] however, as neither party had made any argument relating to the provisions’ interaction, the Court declined to go further than making mention of the same.?On appeal, the provisions were brought up again, and with specific reference to the reasons of the Tax Court, but the Appellate Court also declined to engage as “[s]ubsection 96(1.01) [did] not affect any of the analysis in the[ Appellate Court’s] reasons.”[73]
?VI.???????????????Conclusion
Subdivision J[74] is made up of only eight sections;[75] further, from a taxation perspective,[76] partnerships continue to provide ample flexibility to its members as a means of organising their tax related affairs as they carry on business with a view to a profit.?Resultantly, the traditional fashion of engaging in a business endeavour with another, primarily pursuant to an agreement amongst the parties, and without the creation of a separate taxpayer and its necessarily associated tax liability, remains largely undisrupted. ?Nonetheless, as the court has cautioned, “[a]mounts entered in accounting items must reflect reality.”[77]
Tax planning calls for complete compliance with all the applicable legislative provisions and hinges on practical, plausible, reasonable facts.?In other words, it is not enough to set up a model, and organization chart, or a series of items, the amounts of which are essentially the result of accounting transactions.[78]?
[1] The Act, s. 96.
[2] Baker Tilly Canada, “Expand your structuring options: consider a limited partnership,” February 26, 2018 (https://www.bakertilly.ca/en/btc/publications/expand-your-structuring-options-consider-a-limited-partnership).
[3] “Partnerships” in Report on the Annual Conference of the Canadian Tax Foundation (1971) (Toronto: Canadian Tax Foundation, 1972) 427, at p. 437, as cited in Canada v. 594710 British Columbia Ltd., 2018 FCA 166, at para 61.
[4] Understanding the Taxation of Partnerships, 7th Ed. (2017, Wolters Kluwer), at §206 Allocation of Income or Loss Amongst the Partners.
[5] This is unlike losses generated by a corporation where such losses remain trapped within the corporate entity.
[6] The Act, s. 103(1); XCo Investments Limited (2007 FCA 53).
[7] The Act, s. 248(1).
[8] Puri, et al., Cases, Materials and Notes on Partnerships and Canadian Business Corporations, 5th Ed. (Toronto: Carswell, 2011), at p. 3-4.
[9] Baker Tilly Canada, “Expand your structuring options: consider a limited partnership,” February 26, 2018 (https://www.bakertilly.ca/en/btc/publications/expand-your-structuring-options-consider-a-limited-partnership).
[10] Where a party may or not be a taxable entity, and could include a taxpayer (such as an individual or corporation), another partnership, or an entity not subject to tax under the Act.
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[11] Puri, et al., Cases, Materials and Notes on Partnerships and Canadian Business Corporations, 5th Ed. (Toronto: Carswell, 2011), at p. 4-5, Stow v. R., 2010 TCC 406, at para 13.
[12] Backman v. R. [2001] 1 S.C.R. 367.
[13] Backman v. R. [2001] 1 S.C.R. 367.
[14] Stow v. R., 2010 TCC 406, citing Backman v. R., 2001 SCC 10, and Spire Freezers Ltd. v. R., 2001 SCC 11.
[15] The Act, s. 39.1(1)(e); The CRA, “Capital gains or losses from a Partnership,” January 18, 2022 (https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/personal-income/line-12700-capital-gains/capital-gains-losses-a-business-partnership/capital-gains-losses-a-partnership.html); Puri, et al., Cases, Materials and Notes on Partnerships and Canadian Business Corporations, 5th Ed. (Toronto: Carswell, 2011), at p. 35.
[16] Discussions relating to tiered partnerships are not within the scope of this paper.
[17] Ingrid Demchenko and Nandini Somayaji, “The Taxation of Partnerships: Selected Issues” (2015) 63:3 Canadian Tax Journal 851-84, at 864, citing: “Canada revenue Agency Round Table,” in Report of Proceedings of the Sixty-Sixth Tax Conference, 2014 Conference Report (Toronto: Canadian Tax Foundation, 2016), 4:1-22 question 10, at 4:8.
[18] Puri, et al., Cases, Materials and Notes on Partnerships and Canadian Business Corporations, 5th Ed. (Toronto: Carswell, 2011), at ch. 1, s. 6(a).
[19] SpenceDrake Tax Law, “Limited Partnership Tax Shelters & At-Risk Rules,” December 13, 2020 (https://sdtaxlaw.ca/primer-limited-partnerships-tax-shelters-at-risk-amount-rules/?msclkid=f84de2eecf1611ec834dba72eaaa5db8); see also, The Act, s. 96(2.4).
[20] Supra, note 3.
[21] ex: Employment Standards Act, R.S.B.C. 1996, c. 113, s. 4; Employment Standards Act, S.O. 2000, c. 41, s. 5; Occupiers Liability Act, R.S.B.C. 1996, c. 337, s.2; Occupiers’ Liability Act, R.S.O. 1990, c. O.2, s. 2.
[22] ex: Partnership Act, R.S.O. 1999, c. P.5, s. 20; Partnership Act, R.S.B.C. 1996, c. 348, s. 21; see also, Jocelyn Blanchet, Carla Hannemann, and Lance Fraser, Partnership Law and Intersections with Tax (Toronto: Canadian Tax Foundation, 2018), at p. 1.
[23] Jocelyn Blanchet, Carla Hannemann, and Lance Fraser, Partnership Law and Intersections with Tax (Toronto: Canadian Tax Foundation, 2018), at p. 2.
[24] Infra; see also, Stow v. R., 2010 TCC 406, at para 16, and Canada v. 594710 British Columbia Ltd., 2018 FCA 166, at para 63.
[25] Puri, et al., Cases, Materials and Notes on Partnerships and Canadian Business Corporations, 5th Ed. (Toronto: Carswell, 2011), at p. 31.
[26] John N. Gregory, “Use of Partnerships in Tax Planning” 2007 British Columbia Tax Conference (Toronto: Canadian Tax Foundation, 2007), 5:1-18, at p. 5, s. B.2.
[27] Revenue Canada Round Table, 1992 Cdn Tax Foundation conference report, Q. 13, p. 54:9.
[28] Canderel Ltd. v. R. [1998] S.C.J. No. 13; see also, Jocelyn Blanchet, Carla Hannemann, and Lance Fraser, Partnership Law and Intersections with Tax (Toronto: Canadian Tax Foundation, 2018), at p. 5.
[29] Cadesky Tax, “Be Careful if You Allocate Partnership Income Only to Reduce Tax,” Tax Tips 07-04 (https://www.cadesky.com/tt-07-04/).
[30] XCO Investments Ltd. v. R., 2005 TCC 655, at para 20.
[31] The Act, s. 96(2.2); see also, infra, at IV.
[32] Edward A. Heakes, “Limited Partnerships: Still at Risk” in Corporate Tax Planning in a Changing Business Environment, 1004 Corporate Management Tax Conference (Toronto: Canadian Tax Foundation, 1994), 7:1-17.
[33] Canada v. 594710 British Columbia Ltd., 2018 FCA 166, at para 62.
[34] The Act, s. 103(1) & (1.1); see also, infra.
[35] Stow v. R., 2010 TCC 406, at para 40, citing OFSC Holdings Ltd. v. R., 2001 FCA 260, at paras 78 and 99.
[36] While profit trading is not interchangeable with loss trading, per XCO Investments Ltd. v. R, 2007 FCA 53, at para 14, citing Loynes v. R., 2003 TCC 214, affirming OSFC Holdings Ltd. v R., 2001 FCA 260, section 103 applies when there is a sharing of the income or loss of a partnership.
[37] The Act, s. 96(1.01)(a); 594710 British Columbia Ltd. v. R., 2016 TCC 288, at para 101, and Canada v. 594710 British Columbia Ltd., 2018 FCA 166 at para 78; see also, infra, notes 72-3.
[38] MNP, “An Introduction to Partnerships,” November 1, 2012 (https://www.mnp.ca/en/insights/directory/an-introduction-to-partnerships#:~:text=These%20rules%20generally%20limit%20the,in%20the%20year%20it%20arises).
[39] Baker Tilly Canada, “Expand your structuring options: consider a limited partnership,” February 26, 2018 (https://www.bakertilly.ca/en/btc/publications/expand-your-structuring-options-consider-a-limited-partnership); MNP, “An Introduction to Partnerships,” November 1, 2012 (https://www.mnp.ca/en/insights/directory/an-introduction-to-partnerships#:~:text=These%20rules%20generally%20limit%20the,in%20the%20year%20it%20arises).
[40] MNP, “An Introduction to Partnerships,” November 1, 2012 (https://www.mnp.ca/en/insights/directory/an-introduction-to-partnerships#:~:text=These%20rules%20generally%20limit%20the,in%20the%20year%20it%20arises).
[41] Baker Tilly Canada, “Expand your structuring options: consider a limited partnership,” February 26, 2018 (https://www.bakertilly.ca/en/btc/publications/expand-your-structuring-options-consider-a-limited-partnership); The CRA, “Line 25100 – Limited partnership losses of other years,” January 18, 2022 (https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-25100-limited-partnership-losses-other-years.html).
[42] Baker Tilly Canada, “Expand your structuring options: consider a limited partnership,” February 26, 2018 (https://www.bakertilly.ca/en/btc/publications/expand-your-structuring-options-consider-a-limited-partnership).
[43] MNP, “An Introduction to Partnerships,” November 1, 2012 (https://www.mnp.ca/en/insights/directory/an-introduction-to-partnerships#:~:text=These%20rules%20generally%20limit%20the,in%20the%20year%20it%20arises).
[44] Canada v. 594710 British Columbia Ltd., 2018 FCA 166, at para 75.
[45] ex. Stow v. R., 2010 TCC 406, at para 16; 594710 British Columbia Ltd. v. R., 2016 TCC 288, at para 97.
[46] The Act, s. 103(1)&(1.1).
[47] Canada v. 594710 British Columbia Ltd., 2018 FCA 166, at para 61.
[48] Canada v. 594710 British Columbia Ltd., 2018 FCA 166, at para 62.
[49] Stow v. R., 2010 TCC 406, at para 62, citing XCO Investments Ltd. v. R., 2007 FCA 53, at para 16.
[50] The Act, s. 245.
[51] XCO Investments Ltd. v. R., 2005 TCC 655, at para 40.
[52] Supra.
[53] XCO Investments Ltd. v. R., 2005 TCC 655, at para 40.
[54] Supra, at III.
[55] 2003 D.T.C. 61 (Fr.), 2004 D.T.C. 2667 (TCC).
[56] Fillion c. R., 2004 D.T.C. 2667 (TCC), at para 44.
[57] Fillion c. R., 2004 D.T.C. 2667 (TCC), at para 52; see also, The Act, s. 103(1)&(1.1), supra.
[58] 2005 TCC 655, aff’d 2007 FCA 53.
[59] XCO Investments Ltd. v. R., 2005 TCC 655, at para 29.
[60] XCO Investments Ltd. v. R., 2005 TCC 655.
[61] XCO Investments Ltd. v. R., 2005 TCC 655, at para 14-5, aff’d 2007 FCA 53, at para 12; see also, supra, note 14.
[62] XCO Investments Ltd. v. R., 2007 FCA 53, at para 24.
[63] XCO Investments Ltd. v. R., 2005 TCC 655, at para 33.
[64] 2010 TCC 406.
[65] Supra, note 35.
[66] Stow v. R., 2010 TCC 406, at para 41.
[67] Stow v. R., 2010 TCC 406, at para 69.
[68] Stow v. R., 2010 TCC 406, at para 64.
[69] Stow v. R., 2010 TCC 406, at para 60; XCO Investments Ltd. v. R., 2005 TCC 655, at paras 23-28.
[70] 2007 TCC 190, and not discussed in this paper.
[71] Stow v. R., at para 65.
[72] 2016 TCC 288, at para 101.
[73] Canada v. 594710 British Columbia Ltd., 2018 FCA 166, at para 78.
[74] The Act, Subdivision J – Partnerships and Their Members.
[75] The Act, ss. 96-103.
[76] Discussion on the various provincial Partnership Acts were outside the scope of this paper.
[77] Fillion c. R., 2004 D.T.C. 2667 (TCC), at para 46.
[78] Fillion c. R., 2004 D.T.C. 2667 (TCC), at para 45.