Limited Partner

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This page is currently being updated. Please refer to the 2020-10 version of the Guide to Filing the Partnership Information Return (TP-600.G-V).

Limited partners of a partnership that sustains a loss are subject to certain rules.

A limited partner's share of all of the partnership's losses, whether from a business (other than a farming business) or from property, is deductible up to an allowable amount. The allowable amount is equal to the partner's at-risk amount at the end of the partnership's fiscal period or, if applicable, to the portion of the at-risk amount that exceeds the partner's share of:

  • the federal investment tax credit;
  • the partnership's losses from a farming business for the fiscal period;
  • the Canadian and foreign resource expenses incurred by the partnership during the fiscal period (boxes 28 through 31 of its RL-15 slip [see courtesy translation RL-15.EX-T]).

You must take this rule into account when determining the losses to be entered on the limited partner's RL-15 slip. The total amount of these losses must not exceed the allowable amount mentioned above.

If the partnership incurred scientific research and experimental development (R&D) expenditures that created or increased the business loss, the partnership must not allocate a share of this loss (or of the increase in this loss) to the partner.


A partnership's losses from a farming business are not limited by the at-risk amount rules and must be included in the amount of the income (or loss) allocated to the partner.

Limited partnership loss

The term "limited partnership loss" means the portion of a limited partner's share of the partnership's loss from a business (other than a farming business), property loss or issue expenses related to Québec resources (boxes 1, 3 and 65 of the RL-15 slip) that cannot be deducted because of the partner's at-risk amount.

The amount of this loss may, however, be deducted from the partner's taxable income for a subsequent year, up to the amount by which the partner's at-risk amount at the end of the partnership's fiscal period ending in the particular year exceeds the aggregate of the following amounts for the fiscal period:

  • the partner's share of the federal investment tax credit;
  • the partner's share of the partnership's business losses or property losses; and
  • the partner's share of the Canadian and foreign exploration or development expenses.

At-risk amount

The at-risk amount of a limited partner's interest in a partnership at a specific moment corresponds to the amount by which the aggregate of:

  • the adjusted cost base (ACB) of the partner's interest in the partnership at that moment (see the second point of the notes below);
  • the partner's share of any partnership income for the fiscal period that ended, where applicable, at that moment; and
  • the partner's share in each of the amounts covered by subparagraph (viii) of paragraph (i) of section 255 of the Taxation Act which must be subtracted from the cumulative Canadian exploration expenses, Canadian development expenses or Canadian oil and gas property expenses that the partnership allocates to the member for the fiscal period;

exceeds the aggregate of:

  • the total of the amounts owed at that moment by the partner (or by a person or partnership not dealing at arm's length with the partner) to the partnership (or to a person or partnership not dealing at arm's length with the partnership). However, this total does not include the unpaid principal amount of any limited-recourse indebtedness used to acquire the interest or any limited-recourse amount pertaining to the interest that is to be deducted in the calculation of the ACB or the cost of the partner's interest in the partnership; and 
  • the amount or benefit, as applicable, that the partner (or a person not dealing at arm's length with the partner) is entitled to receive, either immediately or in the future and either absolutely or contingently, whether by way of reimbursement, compensation, revenue guarantee, proceeds of disposition, loan or any other form of indebtedness, or in any other form. This amount or benefit is granted or is to be granted for the purpose of eliminating or reducing the impact of a loss that the partner may sustain because the partner holds or disposes of an interest in the partnership, unless the amount or benefit is an amount of assistance that is to be deducted from Canadian exploration or development expenses or Canadian oil and gas property expenses, or if entitlement to receive the amount or benefit results from certain revenue guarantees, excluded obligations or insurance contracts.

See Schedule A of the information return for details on what information is needed to calculate the at-risk amount of the partners.

  • For the purposes of calculating the at-risk amount, where the interest held by a limited partner was acquired from a third party, rather than directly from the partnership, the ACB of the interest must be determined as if its cost were equal to the lesser of the following amounts: 
    • the cost otherwise determined;
    • the ACB of the interest for the transferor, immediately before the transaction.
  • If, for the fiscal period, the partnership sustained a business or property loss, or incurred resource expenses (Canadian exploration or development expenses, Canadian oil and gas property expenses and foreign resource expenses), or share and security issue expenses for flow-through shares, it is important to calculate the at-risk amount before determining the amounts to enter on the RL-15 slip.

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