On May 26, 2016, the Canada Revenue Agency (CRA) announced that
it will consider Florida and Delaware limited liability limited
partnerships (LLLPs) and US limited liability partnerships (LLPs)
to be corporations for Canadian tax purposes. Presumably, other
LLPs and LLLPs will be treated similarly. Recently, US LLLPs and
LLPs have been used by Canadians as a common structure for
investing in US real estate. The CRA's new administrative
position may make investments into US LLLPs or LLPs by Canadians
unattractive, and may require additional planning for those who
currently hold an interest in a US LLLP or LLP.
Consequences
For Canadian taxpayers with an interest in a US LLLP or LLP, the
tax consequences of this new administrative position may
potentially result in the structure being significantly less tax
efficient than intended. The interest held by a Canadian in a US
LLLP or LLP is now considered by Canadian tax authorities to be an
interest in a corporation, but
