How does the 2008 budget announcement affect the tax treatment of exchanges of securities that are partnership interests?
The budget proposes that, where the exchanged securities are partnership interests, the portion of capital gains arising because of reductions to the adjusted cost base would not be exempted. In general, the taxable capital gain would be the lesser of: the taxable capital gain otherwise determined; and one-half of the amount, if any, by which the cost to the donor of the exchanged units exceeds the adjusted cost base of those interests (determined without reference to distributions of partnership capital). Question.
