In 2015-0588791I7 (recently released), a foreign affiliate of a partnership (LLC 1) held a shares in another US limited liability company (LLC 3). LLC 3 was later converted into a US LP, such that LLC 1 received units in US LP in exchange for its shares in LLC 3. A capital loss (foreign accrual property loss) was realized by LLC 1 on this exchange, and the question became whether the loss was “stopped” under s. 40(3.4). The answer was no, because the units in US LP were not “identical properties” to the shares in LLC 3: i.e., the holder had different personal liability, the holder had different management rights, distributions had different tax treatment, and the nature of the ownership of properties held by LLC 3 and US LP was different. The economic equivalence of LLC 3 shares and US LP units was not a relevant consideration in this context: see 10737 Newfoundland Limited v. The Queen, 2011 TCC 346.