A partnership has several members, some of whom hold partnership interests which participate in both income and capital of the partnership. The partnership agreement will be amended to provide for the issuance of two partnership interests: the first, to provide for participation only in income; and the second, to provide for participation only in capital. If only the income share is subsequently disposed of, would that constitute a partial disposition of property? CRA stated:
The CRA accepts that a partner's interest in a partnership may take the form of various shares in the partnership. However, such an interest remains a single property. Accordingly, on a partial disposition of the interest, the adjusted cost base ("ACB") of the interest in the partnership is determined under subsection 43(1). Under paragraph 53(2)(d), the ACB of the retained portion of the interest is equal to the ACB of the entire interest less the ACB of the portion subject to the partial disposition.