CRA affirmed its position as follows:
… Income Tax Technical News No. 5 … states, in accordance with subparagraph 53(1)(e)(i), that in computing the adjusted cost base of a member's interest in a partnership at a particular time, only the income or loss of the partnership for fiscal periods already ended will be taken into account at that time.
Accordingly, the distribution in the year of a capital gain realized in the year by an LP triggered a negative ACB gain to a limited partner with a modest “outside” basis.