ADMN 4710H Chapter Notes - Chapter 16: Capital Cost Allowance, Joint Venture
30 Mar 2020
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Informal structure (arrangement: 2 or more entities conducting business activity together, by sharing their resources joint venture is not a partnership commonly found in construction, entertainment industry, normally formed for a single purpose (ex. To build a bridge: must have a joint venture agreement to define participants" roles and entitlement for profits. Sbd limit of k doesn"t have to be shared with other joint venture participants: as a result, jv is must easier to setup. Joint venture provides greater flexibility than a formal partnership. Sbd limit should be shared with all corporate partners. Assets and required resources are transferred to partnership (legal title change) Transfer of assets between partners and partnership at fmv (unless election was used) transfer of assets will have deemed disposition, triggers taxable income. More complex than jv to establish and dissolve. When the building of bridge is complete, the joint venture will be ended) Joint venture participants do not have to share the sbd limit of.
