knowledge topics

Taxation of a Partnership

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.

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