1. When are adjustments made to the partnership acb's to reflect operating losses in a scenario involving exempt interests in the partnership?
2. How can partnership interests lose their exempt interest status?
1. In computing the ACB of a partner's exempt interest in a partnership at any time, a reduction is required for that partner's share of the partnership's operating loss for fiscal periods ending before that time.
2. Subject to certain exceptions noted 96(2.5) of the Act, an exempt interest in a partnership can lose that status where after February 25, 1986, there has been a substantial contribution of capital to the partnership or a substantial increase in the indebtedness of the partnership.