The authors suggest that corporations might form a partnership to hold an investment portfolio to reduce or avoid the small business deduction grind for passive income in paragraph 125(5.1)(b) of the Income Tax Act (Canada). They counsel caution, however, because the CRA might try to apply subsection 256(2.1) or the GAAR.
Stan Shadrin, Alex Ghani and Josh Harnett “Corporate Partnership May Avoid the Paragraph 125(5.1)(b) Grind” 20:4 Tax for the Owner-Manager (October 2020)
