I-3 - Taxation Act

Section 418.37 Disposition versions

2006-03-01

418.37. Where a taxpayer is a limited partner of a partnership at the end of a fiscal period of the partnership, the excess amount described in the second paragraph shall reduce, first, the taxpayer’s share of the Canadian oil and gas property expenses, then, the taxpayer’s share of Canadian development expenses, then, the taxpayer’s share of Canadian exploration expenses, then, the taxpayer’s share of foreign resource expenses in relation to a country, and then, the taxpayer’s share of foreign exploration and development expenses, incurred by the partnership in that fiscal period.

The excess amount referred to in the first paragraph is the amount by which

(a)  the aggregate of all amounts each of which is the taxpayer’s share of each class of expenses described in the first paragraph incurred by the partnership in the fiscal period referred to therein, computed without reference to this section, exceeds

(b)  the amount by which the at-risk amount of the taxpayer in respect of his partnership interest at the end of the fiscal period exceeds the aggregate of the following amounts:

i.  that portion of the amount determined in respect of the partnership that is required by subsection 8 of section 127 of the Income Tax Act (Revised Statutes of Canada, 1985, chapter 1, 5th Supplement) to be added in computing the investment tax credit of the taxpayer in respect of the fiscal period, within the meaning assigned to that expression by the said Act for the purposes of the said subsection;

ii.  the taxpayer’s share of any losses of the partnership for the fiscal period from a farming business.

For the purposes of the first paragraph, a taxpayer’s share of foreign resource expenses in relation to a country, shall be reduced in the order specified by the taxpayer in a written document filed with the Minister on or before the taxpayer’s filing-due date for the taxpayer’s taxation year in which the fiscal period of the partnership ends or, where no such order is specified, in the order determined by the Minister.

For the purposes of this chapter, subparagraph ii of paragraph l of section 257, sections 600.1, 600.2 and 613.1 and Title VII of Book IV, but not for the purposes of this section, the taxpayer’s share of each class of expenses described in the first paragraph incurred by the partnership in the fiscal period referred to therein is deemed to be equal to the amount by which the taxpayer’s share of that class of expenses exceeds that portion of the excess amount determined in the second paragraph that, under the first paragraph, reduced that class of expenses.

1990, c. 59, s. 166; 1997, c. 3, s. 71; 2004, c. 8, s. 89.