Investment club

An investment club must file a trust return if it is considered to be a "bona fide" trust. This is the case where:

• all of its members are individuals
• the majority of its members are not from the same family
• members of the same family have not held, at any time, more than 50% of the outstanding units of the club
• the bulk of its property consists of cash, shares, bonds or units of a unit trust, and
• the disposition of the club's property gives rise to a capital gain or loss rather than to business income or a business loss

Partnership

An investment club that does not have a specific status may elect to be treated as a partnership. This makes it easier for members to complete the club's income tax return.

An investment club that makes this election must file the Partnership Information Return (form TP-600-V) instead of the trust return.

For further information, refer to the Guide to Filing the Trust Income Tax Return (TP-646.G-V).