I-3 - Taxation Act

Section 607 Disposition versions

2006-03-01

607. (1)  Where the principal purpose for an agreement contemplated in section 606 may reasonably be considered to be the reduction of the tax that might otherwise be or become payable under this Part of the postponement of such payment, the share of each member in the income, loss or amount that is the object of that agreement shall be the amount that is reasonable, having regard to all the circumstances including the proportions in which the members have agreed to share profits and losses from other sources in Canada or from sources in another place.

(1.1)  Where an agreement described in section 606 is entered into between members of a partnership not dealing with each other at arm’s length, the share of each member in the income, loss or amount that is the object of that agreement is the amount that is reasonable, having regard to the work performed for the partnership by its members, the capital invested therein by them or any other relevant factor.

(2)  For the purposes of this chapter, the word “losses” when used in the expression “profits and losses” means losses determined without reference to the other provisions of this Part.

1972, c. 23, s. 459; 1982, c. 5, s. 132; 1997, c. 3, s. 71.