I-3 - Taxation Act

Section 127.16.1 Disposition versions

2021-12-10

127.16.1. For the purposes of this division in respect of a pertinent loan or indebtedness, within the meaning of subparagraph ii of subparagraph a of the second paragraph of section 127.16, the following rules apply:

(a)  any transaction entered into, or event participated in, by a partnership is deemed to have been entered into, or participated in, as the case may be, by each member of the partnership in the proportion that the fair market value, at the time of the transaction or event, of the member’s interest—held directly or indirectly through one or more other partnerships—in the partnership is of the fair market value, at that time, of the interests in the partnership held directly by all the members of the partnership;

(b)  a property that, based on the assumptions contained in paragraph c of section 600, would be owned at a particular time by a partnership, is deemed to be owned at the particular time by each member of the partnership in the proportion that the fair market value, at the particular time, of the member’s interest—held directly or indirectly through one or more other partnerships—in the partnership is of the fair market value, at that time, of the interests in the partnership held directly by all the members of the partnership;

(c)  where the portion of a property that is deemed under paragraph b to be owned by a member of a partnership increases at a particular time (with the understanding that such an increase includes that resulting from the acquisition of an interest in a partnership in which, immediately prior to the acquisition, the member did not have an interest), the member is deemed at the particular time to acquire the additional portion of the property;

(d)  an amount that, based on the assumptions contained in paragraph c of section 600, would be owing by a partnership at a particular time is deemed to be owed by each member of the partnership in the proportion that the fair market value, at the particular time, of the member’s interest—held directly or indirectly through one or more other partnerships—in the partnership is of the fair market value, at that time, of the interests in the partnership held directly by all the members of the partnership; and

(e)  if a member of a partnership enters into a transaction, or participates in an event, with the partnership, paragraph a does not apply in respect of the transaction or event to the extent that the transaction or event would be deemed, under paragraph a if this section were read without reference to this paragraph, to have been entered into, or participated in, as the case may be, by the member.

2021, c. 36, s. 56.