ACCO 340 Lecture Notes - Lecture 12: Larry Jacobson, John Molson, Property Income
15 Mar 2018
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All book excerpts included in these notes come from the required text for this course: byrd & chens canadian tax principles, 2016-2017 edition. We gratefully acknowledge permission from the publisher to use these excerpts. A partnership is not a person, so it pays no tax: however, ita 96 requires a partnership to compute net income for tax purposes as if the partnership were a separate person. Treat as an allocation of partnership income. Add back to accounting income if deducted. These transactions are recognized for tax purposes. Example, if a partner rents property to a partnership, the rent is deductible as an expense to the partnership, and the partner will declare the rental income. Deducted by the partnership, and not by the individual partners. All the normal rules are followed, such as the year rule, recapture, terminal losses, etc. Full amount of dividends (not grossed up) included in partnership income. Partners gross up and claim the dividend tax credit.
