knowledge topics
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
- Distribution
- 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:
- Contributions
- Income allocations
- Draws
- 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.
Glossary of Verbs (mouse over to see definition)
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Define
To state exactly the meaning of
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Identify
To be aware of / to recognize and correctly name / to locate an appropriate resource
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Explain
To make clear the meaning of / to describe something in more detail or reveal relevant facts or ideas related to it
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Compare
To note the similarities and differences between two or more things
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Estimate
To determine an approximate value for
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Calculate
To find the value using mathematics
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Convert
To change from one form or purpose to another
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Evaluate
To reach a conclusion or make a judgement through careful study
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Interpret
To give the meaning of / to construe or understand / to translate orally
Read more about the Taxonomy used in the FP-BoK
previous / Taxation of a Canadian Controlled Private Corporation