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Explain to ace management the income tax treatment

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Reference no: EM133172562

Question - Ace Holding Bhd. (Ace) derives its income from holding of investments and trading activities. Ace has unutilized business losses arising from the trading business. The management of Ace decided to incorporate a new 100% owned subsidiary, BB Sdn. Bhd. (BB). Ace will transfer its trading business to BB. The management has specifically identified the following items to be transferred:

(i) Office equipment

(ii) Trade receivables

Assume you are the tax consultant for Ace. Explain to Ace's management the income tax treatment of the items to be transferred from Ace to BB from the perspective of both companies?

Reference no: EM133172562

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