Taxation of a Partnership
KNOWLEDGE EXPECTED OF: CFP® Professionals Only
- Define types of income that a partner may receive from a partnership, such as:
- Income allocation
- Explain how income earned by a partnership is taxed.1,2
- Explain how Capital Cost Allowance (CCA) is allocated in a partnership.
- Explain how personal property transferred by a partner into a partnership may be treated for tax purposes.3
- Explain how property disposed of by a partnership may be treated for tax purposes.
- Define a capital account for a partnership.
- Explain the purpose of a capital account for a partnership.
- Define components of the capital account for a partnership, such as:
- Income allocations
- Explain how the balance of the capital account for a partnership is affected by its components.
- Identify components that affect the adjusted cost base of a partner’s partnership interest.
- Explain the tax implications when the adjusted cost base of a partner’s interest in a partnership becomes negative.
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