On March 1 of the current year, Mathew acquired a one percent interest in a partnership that

Question:

On March 1 of the current year, Mathew acquired a one percent interest in a that carries on a nursing home business in several provinces in Canada. Mathew paid $10,000 for the interest. The reported a loss for the current year. Mathew was allocated a business loss of $16,000 from the Income Tax Act reference: ITA 96(2.1), 111(1)(e).
Describe the tax implications of the loss for Mathew under the following two assumptions:
1) Mathew has a limited interest, and
2) Mathew has a general interest.
Partnership
A legal form of business operation between two or more individuals who share management and profits. A Written agreement between two or more individuals who join as partners to form and carry on a for-profit business. Among other things, it states...