A recent Canada Revenue Agency (CRA) announcement may adversely affect real estate companies that carry on projects or hold investment properties through joint ventures.
The 2011 federal budget proposed rules to significantly limit or eliminate the opportunity for corporate partners in a partnership to benefit from any tax deferrals resulting from the partnership’s ability to have a year end separate from that of its corporate partners. The proposed rules were passed into law on December 15, 2011. They are both complex and confusing. With the change to the tax rules applicable to partnerships, questions arose as to the status of the CRA’s administrative approach to joint ventures and co-ownerships. Read our Tax memo to learn more.