Deduction of simple-partnership losses limited to participation share

ATA/758/1997Court of Justice / Administrative ChamberDec 9, 1997Dismissed

Extracted by Omnilex

Omnilex summary

The taxpayer, a member of a simple partnership, sought to deduct a share of partnership losses larger than his participation interest. The court held that, for income-tax purposes, a partner may only deduct losses up to the extent of his share in the partnership. The deduction was therefore refused beyond that proportion.

Omnilex headnote

LCP.1; imposition du revenu; société simple; déduction des pertes limitée à la part sociale: le membre d'une société simple ne peut imputer sur son revenu imposable une fraction des pertes de la société excédant sa participation. La déduction suit la quote-part économique du contribuable et ne peut conduire à une répartition des pertes au-delà de celle-ci (consid. non indiqué).

Full text

Descripteurs

IMPOT; DEDUCTION DU REVENU(DROIT FISCAL); DECISION DE TAXATION; BASE DE CALCUL; IMPOSITION DANS LE TEMPS; IMPOT SUR LE REVENU; PROCEDURE D'ESTIMATION; SOCIETE SIMPLE; DETTE; FIN

Normes

LCP.1

Résumé

Un membre d'une société simple ne peut déduire de son revenu imposable une fraction des pertes de cette société supérieure à la part qu'il détient dans celle-ci.

Keywords

taxationincome taxdeductionsimple partnershiplossesassessment baseallocation

Extracted by Omnilex

Key legal questions extracted by Omnilex

Key legal question

Whether a partner in a simple partnership may deduct from taxable income a share of the partnership losses exceeding his ownership interest.

Extracted holding

No. The deductible share of the partnership’s losses is limited to the taxpayer’s participation share in the simple partnership.

Extracted reasoning

The court held that income-tax deduction follows the taxpayer’s proportionate economic interest in the simple partnership; losses cannot be allocated beyond that share.

Deduction of simple-partnership losses limited to participation shareAI generated