Form T2059 (election on transfer of property to a partnership)
Form T2059 is the CRA form a taxpayer and a Canadian partnership use to jointly elect under subsection 97(2) of the Income Tax Act when the taxpayer, a member of the partnership, transfers property to it. A transfer to a corporation uses a different form.
The CRA describes Form T2059 as the form for a taxpayer and a Canadian partnership to elect jointly under subsection 97(2) of the Income Tax Act. It applies where the taxpayer is a member of the partnership immediately after the transfer. Note the direction: the form covers property moving into a partnership, not a partnership converting into a corporation.
Where it fits in a deal
Section 97(2) reaches certain kinds of property, including capital property and inventory, and is subject to subsections 97(3) and 13(21.2). A transfer to a taxable Canadian corporation is a different election, made on the CRA’s Form T2057. The wider rollover is explained in section 97(2) partnership rollover.
What to ask
- Whether the transfer is into a partnership or into a corporation, since the forms differ.
- Whether a T2059 was filed for each earlier transfer into the partnership.
- Who signed it for the partnership and for the transferring partner.
Sources
This definition is checked against primary sources. Links were last confirmed on the dates shown.
- 01Canada Revenue AgencyGovernmentT2059 Election on Disposition of Property by a Taxpayer to a Canadian Partnership
- 02Government of Canada (Department of Justice)GovernmentIncome Tax Act, section 97 (contribution of property to a partnership)
- 03Canada Revenue AgencyGovernmentT2057 Election on Disposition of Property by a Taxpayer to a Taxable Canadian Corporation
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