CO-771.2.1.AT, Business Limit Allocated to a Corporation that Is a Designated Member of a Partnership

The following definition is given in subsection 125(7) of the federal Income Tax Act:

Designated member, of a particular partnership in a taxation year, means a Canadian-controlled private corporation that provides (directly or indirectly, in any manner whatever) services or property to the particular partnership at any time in the corporation’s taxation year where, at any time in the year,

the corporation is not a member of the particular partnership; and
either

one of its shareholders holds a direct or indirect interest in the particular partnership, or
if subparagraph (i) does not apply,

the corporation does not deal at arm’s length with a person that holds a direct or indirect interest in the particular partnership, and
it is not the case that all or substantially all of the corporation’s income for the year from an active business is from providing services or property to

persons with which the corporation deals at arm’s length, or
partnerships (other than the particular partnership) with which the corporation deals at arm’s length, other than a partnership in which a person that does not deal at arm’s length with the corporation holds a direct or indirect interest;

Interaction between Schedule 7 (Jump Code: 7) and Form CO-771.2.1.AT

The filing corporation is a designated member of the partnership

When table 2 in Part 4 of Schedule 7 is completed, the following data is used to create a copy of Form CO-771.2.1.AT:

the partnership’s name;
the partnership’s federal account number;
the name of person (that is a member of the partnership) making the assignment;
the social insurance number of the member, if applicable.

As for the following data, which comes from tables 1 and 2 in Part 4 of Schedule 7, it will be transferred to Form CO-771.2.1AT:

the partnership’s name;
the partnership’s federal account number;
the corporation’s income from the provision of property or services (directly or indirectly) to the partnership;
the name of person (that is a member of the partnership) making the assignment;
the social insurance number of the partner, if applicable;
the tax year-end date of the person making the assignment;
the business limit of the specified partnership that the member of the corporation assigns to the filing corporation.

The filing corporation is a member of the partnership

When table 3 in Part 4 of Schedule 7 is completed, the following data is used to create a copy of Form CO-771.2.1.AT:

the partnership’s name;
the partnership’s federal account number;
the designated member’s name.

As for the following data, which comes from table 3 in Part 4 of Schedule 7, it will be transferred to Form CO-771.2.1AT:

the partnership’s name;
the partnership’s federal account number;
the designated member’s name;
the taxation year-end date of the designated partner;
the business limit of the specified partnership that the filing corporation assigns to the designated member.

Business limit allocated to several designated members of the partnership by the filing corporation

In order for the program to be able to correctly calculate the amount on line 20, Business limit allocated by the member of the partnership to other corporations that are designated members of the partnership (total of the amounts on line 26 of the other copies of form CO-771.2.1.AT completed by the member of the partnership for its taxation year), of Form CO-771.2.1.AT, manually create one or more copies of Form CO-771.2.1.AT, so there is one copy for each designated member, in the following situation:

table 3 in Part 4 of Schedule 7 (Jump Code: 7), which contains information on designated members (CCPC) who receive a business limit of the specified partnership assigns by the filing corporation under subsection 125(8) ITA, is not completed;
the filing corporation is a member of the partnership;
the filing corporation is resident of Québec; and
the filing corporation allocates all or part of its business limit to more than one designated member of the partnership.

Business limit allocated to the filing corporation by several members of the partnership

Similarly, manually create one or more copies of Form CO 771.2.1.AT, so there is one copy for each member of the partnership, in the following situation:

table 2 in Part 4 of Schedule 7 (Jump Code: 7), which contains information on the members of the partnership that assigns to the filing corporation a specified partnership business limit under subsection 125(8) ITA, is not completed;
the filing corporation is a designated member of the partnership;
the filing corporation is resident of Québec; and
the filing corporation is being allocated a business limit amount by more than one member of the partnership.