Selling part of a property
When you sell only part of a property, you have to divide the adjusted cost base (ACB) of the property between the part you sell and the part you keep.
Lily owns 100 hectares of vacant land of equal quality. She decides to sell 25 hectares of this land. Since 25 is one quarter of 100, Lily calculates one quarter of the total ACB as follows:
Total ACB $ 100,000
The ACB of the part she sold ($100,000 x 1/4) – 25,000
The ACB of the part she kept = $ 75,000
Therefore, the ACB for the 25 hectares she sold is $25,000.
For more information on selling part of a property, see Archived Interpretation Bulletin IT264R, Part Dispositions and its Special Release.
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