The CRA has stated that, when a partnership receives a capital dividend, a corporate partner’s capital dividend account increases at the time of the receipt of the dividend or at the end of the partnership’s fiscal period depending on the terms of the partnership agreement (Folio S3-F2-C1 ¶1.49). The CRA believes, however, that a capital gain realized by the partnership does not increase the corporate partner’s CDA until the end of the partnership’s fiscal period (Folio S3-F2-C1 ¶1.42).
B Rai, B Katlai and M Kakkar “CRA Views on the Timing of an Increase in a Corporate Partner’s CDA” 12:4 Canadian Tax Focus (November 2022)
