What is a flow-through entity?
You are a member of, or investor in, a flow-through entity if you own shares or units of, or an interest in, one of the following:
- an investment corporation
- a mortgage investment corporation
- a mutual fund corporation
- a mutual fund trust
- a related segregated fund trust
- a partnership
- a trust governed by an employees' profit sharing plan
- a trust maintained primarily for the benefit of employees of a corporation or 2 or more corporations that do not deal at arm's length with each other, where one of the main purposes of the trust is to hold interests in shares of the capital stock of the corporation or corporations, as the case may be, or any corporation not dealing at arm's length therewith
- a trust established for the benefit of creditors in order to secure certain debt obligations
- a trust established to hold shares of the capital stock of a corporation in order to exercise the voting rights attached to such shares
If you filed Form T664, Election to report a Capital Gain on Property owned at the End of February 22, 1994, for any of the above flow-through entities, an exempt capital gains balance (ECGB) was created. For more information on the sale of this type of property, see Disposing of your shares of, or interest in, a flow-through entity.
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