What are the tax implications of a LP Investment?
The LP agreement that you sign provides that income, and net taxable capital gains or losses for purposes of the Tax Act will be allocated to LP Unit holders in the same proportion as distributions received by Unit holders. Distributions may consist of the following for income tax purposes for which T5013 partnership income statements are issued, usually in the latter half of March for the previous tax year. a) Distributions that are currently taxable. This portion of distributions for income tax purposes will be treated as regular taxable income (and not treated as dividends or capital gains) to each Unit holder. b) Distributions that are treated as a dividend received from a Canadian or US subsidiary corporation. As such, it will be subject to a preferential tax treatment that all dividends from Canadian corporations receive (subject to the dividend tax credit). c) Distributions that represent your portion of capital gains allocated to you relating to gain on the sale of a property i
