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

    1.    Such partnership (or another 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 on it, 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, and any transfer pursuant thereto, with respect to the realty held by such partnership at the time of such termination. (Prior code § 8-55)