Income Tax Act — I-3.3 85
5 and before that time by the corporation exceeds (B) the total of such dividends that would be determined under clause 85(2.1)(b)(i)(A) if this Act were read without reference to paragraph 85(2.1)(a), and (ii) the total of all amounts required by paragraph 85(2.1)(a) to be deducted in computing the paid-up capital in respect of that class of shares after November 21, 1985 and before that time. Where partnership wound up (3) Where, (a) in respect of any disposition of partnership property of a partnership to a corporation, subsection 85(2) applies, (b) the affairs of the partnership were wound up within 60 days after the disposition, and (c) immediately before the winding-up there was no partnership property other than money or property received from the corporation as consideration for the disposition, the following rules apply: (d) the cost to any member of the partnership of any property (other than shares of the capital stock of the corporation or a right to receive any such shares) received by the member as consideration for the disposition of the member’s partnership interest on the winding-up shall be deemed to be the fair market value of the property at the time of the winding-up, (e) the cost to any member of the partnership of any preferred shares of any class of the capital stock of the corporation receivable by the member as consideration for the disposition of the member’s partnership interest on the winding-up shall be deemed to be (i) where any common shares of the capital stock of the corporation were also receivable by the member as consideration for the disposition of the interest, the lesser of (A) the fair market value, immediately after the winding-up, of the preferred shares of that class so receivable by the member, and (B) that proportion of the amount, if any, by which the adjusted cost base to the member of the member’s partnership interest immediately before the winding-up exceeds the total of the fair market value, at the time of the winding-up, of the consideration (other than shares of the capital stock of the corporation or a right to receive any such shares) received by the member for the disposition of the interest, that (I) the fair market value, immediately after the winding-up, of the preferred shares of that class so receivable by the member, is of (II) the fair market value, immediately after the winding-up, of all preferred shares of the capital stock of the corporation receivable by the member as consideration for the disposition, and (ii) in any other case, the amount determined under clause 85(3)(e)(i)(B), (f) the cost to any member of the partnership of any common shares of any class of the capital stock of the corporation receivable by the member as consideration for the disposition of the member’s partnership interest on the winding-up shall be deemed to be that proportion of the amount, if any, by which the adjusted cost base to the member of the member’s partnership interest immediately before the winding-up exceeds the total of the fair market value, at the time of the winding-up, of the consideration (other than shares of the capital stock of the corporation or a right to receive any such shares) received by the member for the disposition of the interest and the cost to the member of all preferred shares of the capital stock of the corporation receivable by the member as consideration for the disposition of the interest, that (i) the fair market value, immediately after the winding-up, of the common shares of that class so receivable by the member, is of (ii) the fair market value, immediately after the winding-up, of all common shares of the capital stock of the corporation so receivable by the member as consideration for the disposition, (g) the proceeds of disposition of the partnership interest of any member of the partnership shall be deemed to be the cost to the member of all shares and property receivable or received by the member as consideration for the disposition of t