WHAT’S NEW FOR PARTNERSHIPS?
Elimination of the obligation to provide adjusted cost base (ACB) and fraction at risk (FAR)
Since February 2012, the Canada Revenue Agency (CRA) has amended Schedule 50 “Partner’s Share and Account Transactions” of the T5013 Partnership Information Return to provide the adjusted cost base (ACB) and the at-risk amount (AAU) calculations for partners. This new requirement has been adopted by the Quebec tax authorities.
Administrative policies have been announced by federal and Quebec tax authorities to alleviate concerns by agreeing not to impose penalties for the years 2011 and 2012. The administrative policy provided that penalties would be waived on condition that T5013 and TP600 returns were filed by the deadline, to the best of the knowledge and ability of the partnerships and preparers.
A partnership is liable to a penalty of $100 per omission, both federally and in Quebec, when it concerns information requested on a prescribed form. This applies to all information requested, including partners’ social insurance numbers and tax shelter identification numbers, if applicable.
Following the revision of Schedule 50 for 2013, CRA has eliminated the fields “ACB at year-end” and “FAR at year-end”. The obligation to provide this information has been withdrawn.
According to the 2013 T4068 Guide to Partnership Information Returns (T5013 forms), the challenges posed by these requirements to file a detailed calculation of each partner’s ACB and FAR have been eliminated, since partnerships may not always have the information needed to calculate the ACB and FAR of its partners.
For more information on this new rule, please do not hesitate to contact us.
