A partnership's transfer of a non-cash asset to a partner therein, including liquidation of the partner's share, shall be treated as a disposal of the asset by the partnership, with a declaration of gain or loss on the transfer date.

A partner shall take the cost base of the asset which equals the market value of the asset.

A partner shall be deemed to have received a distribution of profit from the partnership with a value equal to the market price for the ownership of the asset transferred to him without paying its cost. The partner is treated as having disposed of part or all of his share in the partnership, if the estimated distribution exceeds the partner's cost base in the partnership. If the distribution is a complete disposal of a partner's share, and said distribution is less than the partner's cost base, the difference between the cost base and distribution may be deducted on the basis that it is a loss resulting from his disposal of his share.