Respecting the consequences of an inter vivos transfer of an interest in a family farm or fishing partnership (for which the s. 73(4.1)(c) election is made) with a negative adjusted cost base ("ACB"), CRA stated:
[W]here all the conditions for the application of subsection 73(4) are satisfied, paragraph 73(4.1)(c) applies and subsection 98(5) does not apply, the taxpayer is not required to include in computing the taxpayer’s income at the time of the transfer a capital gain equal to the negative ACB of the taxpayer’s interest in a family farm or fishing partnership. In addition, the child will be required to take into account subparagraphs 73(4.1)(c)(ii) and (iii) in computing the ACB of the child’s interest.