A.    In the case of any realty held by a partnership, no tax shall be imposed pursuant to this chapter by reason of any transfer of an interest in the partnership or otherwise, if:

    1.    Such partnership (or other partnership) is considered a continuing partnership within the meaning of Section 708 of the Internal Revenue Code of 1954, and

    2.    Such continuing partnership continues to hold the realty concerned.

    B.    If there is a termination of any partnership within the meaning of Section 708 of the Internal Revenue Code of 1954, for purposes of this chapter, such partnership shall be treated as having executed an instrument whereby there was conveyed, for fair market value (exclusive of the value of any lien or encumbrance remaining thereon), all realty held by such partnership at the time of such termination.

    C.    Not more than one tax shall be imposed pursuant to this chapter by reason of a termination described in subdivision B of this section, and any transfer pursuant thereto, with respect to the realty held by such partnership at the time of such termination. (Prior gen. code § 2-30.05)