CRA accepts that the FMV of a professional partnership interest can be discounted for some portion of the deferred income tax on the work-in-progress?

An interest in a professional partnership, which had elected to exclude work-in-progress from income, is transferred on a rollover basis. Should the valuation of that interest be reduced for the deferred income tax liability on the work-in-progress?

CRA acknowledged that a potential purchaser likely would discount for such taxes, while at the same time noting its "general" position that "deferred taxes respecting a property which is the subject of a rollover should not be considered for the purposes of determining the FMV of such property."

Neal Armstrong.  Summary of 13 August 2013 T.I. 2012-0471401E5 F under General Concepts – FMV – Other.