CRA confirms that negative ACB is not triggered under a parent-child transfer of an interest in a family farm or fishing partnership under s. 73(4.1)(c)
Where a taxpayer has so elected in the taxpayer's return respecting the transfer of an interest in a family farm or fishing partnership to the taxpayer’s resident child, the taxpayer is deemed by s. 73(4.1)(c) not to have disposed of the interest, and the child is deemed to have acquired the interest at the taxpayer’s cost. CRA confirmed that this meant that any negative ACB for the interest was not triggered on its transfer as a capital gain. Furthermore, that negative ACB in effect flowed through to the child under s. 73(4.1)(c)(iii).
Neal Armstrong. Summary of 15 July 2019 External T.I. 2018-0747761E5 F under s. 73(4.1)(c).