The CRA accepts that a business carried on by a corporation as a member of a partnership is not a specified investment business if the partnership employs more than five full-time employees. The authors suggest that a corporation could earn ABI from rental properties “by creating a pooled ownership of multiple properties, or multiple interests in one large property” where the pooling is through a partnership that employs more than five full-time employees. A joint venture, however, will likely be less effective for this purpose because of Lerric Investments Corp. v Canada, 2001 FCA 14.
Jeanne Cheng and Tom Qubti, “Rental Income and ABI: Structuring Around the Five-Employee Test” Canadian Tax Focus 4:4 (May 2018).
