Only one-half of any partnership capital gains that are allocated to partners will be added to the partner's adjusted cost base.

Question

Quizplus · Accepted Answer

All of the partnership's capital gains allocated to partners are added to the partner's adjusted cost base, not just one-half. This ensures that when the partnership interest is eventually sold, the partner's gain or loss on the sale reflects only the change in value during the partner's ownership period, without being distorted by gains that were already taxed as they were allocated.

Only One-Half of Any Partnership Capital Gains That Are Allocated