How many more subscribers do I need for a partnership?

How do I report a partnership loss that I don't need to use?

• I had a loss of 3000 from a partnership. I only had 5000 in employment income, so obviously I don't need to use all of my partnership loss. So, when I enter the loss on lines 162/135, do I enter the the amount of the loss or 0? And, if I enter 0, what do I do with the 3000? Also, the way they word it in the guide, the gross amount is the total partnership's amount, whereas the net amount is only my share. That doesn't seem right. On the form they say 'see lines 135-143', yet in the guide there is nothing on it. Frustrating. Thanks.

• Answer:

  Yes, it can be very frustrating at times, especially if this is the first time you have ever filed out a T2124 Statement of Business Activities form. I just emailed you, kolzangi, hoping to hear back from you shortly. ADDITIONAL INFORMATION @ 7:13 PM EDT Hi Kolzangi, I just did a search thru CRA's website, to confirm what I already knew (just making sure the rules didn't change) and here is what I now have found for you: AS PER CRA: Partnership losses: A partnership can have a loss. However, apply the loss carry-over rules to EACH partner, and NOT to the partnership. For example, when you complete your own income tax return, combine your share of the partnership non-capital losses with any other non-capital losses you have in the year. Note: The 10 year carry-forward period, in respect of non-capital losses, farm losses, restricted farm losses and life insurer’s Canadian life investment losses incurred and investment tax credits earned for Scientific Research and Experimental Development (SR&ED), in taxation years that end after 2005, is extended to 20 years. Apply this amount against your income. For information about the loss carry-forward period for non-capital losses see Line 252 - Non-capital losses of other years. Forms and publications: Business and Professional Income guide (T4002) The CRA direct link for this is: http://www.cra-arc.gc.ca/tax/business/topics/solepartner/partnership/losses-e.html I also checked the T4002 Business and Professional Guide, and here is what CRA says: Reporting partnership income A partnership does not pay income tax on its income and does not file an income tax return. Instead, each partner files an income tax return to report his or her share of the partnership's net income or loss. This requirement remains whether the share of income was received in cash or as a credit to a capital account in the partnership. The CRA link to that is: http://www.cra-arc.gc.ca/E/pub/tg/t4002/t4002-e.html Now, I just want to be clear on this loss that you are referring to... When you filled out the T2124 form, and got to the bottom of the form, are you saying that the total loss was $6,000.00, which your share would be a $3,000.00 loss, or was the total loss $3,000.00, in which case your share would be $1,500.00 loss. This is assuming, of course, that the partnership is 50/50 On line 162, you must report the TOTAL INCOME of the business, since it is a partnership. On line 135, you would be reporting YOUR SHARE OF THE BUSINESS ONLY. Keep in mind that partnerships are subject to collecting and remitting GST, therefore the TOTAL GROSS INCOME of the business must be recorded on line 162. Whatever money you made (or lost, in your particular case) is added to your other income that you would be required to report on your T1 General Income Tax Return for 2006. I hope this information helps you. ADDITIONAL INFORMATION @ 9:36 PM EDT Hi kolzangi, thank you for the email, I just read it. Further to the email, I will say it again... YOU MUST REPORT YOUR SHARE OF THE LOSS, WHICH IS $3,000.00 ON LINE 135 OF YOUR 2006 INCOME TAX RETURN. YOU CANNOT REPORT NIL. THE GROSS SALES ARE REPORTED ON LINE 162 OF BOTH OF YOUR TAX RETURNS. AND, TAKE CAREFUL NOTE OF THIS... YOU ARE REQUIRED TO COMPLETE A GST RETURN REGARDING THE BUSINESS ACTIVITY OF THE PARTNERSHIP AND TO REMIT ANY GST MONIES OWED BASED ON THE OUTCOME OF THE COMPLETED GST RETURN. You need to contact the GST department about the due date of your GST return, since this is a first year business partnership, and I have no idea when your partnership began. The GST number to call is 1-800-959-5525. I hope this additional information helps you.