What will be the shareholders adjusted cost base

Reference no: EM133661699

Question: A sole proprietor forms a corporation for their business, as sole shareholder, and transfers all assets used in the business to the corporation, as follows: • Cash: $150,000 • Computer equipment: original cost $110,000, undepreciated capital cost (UCC) $90,000, fair market value (FMV) $85,000 In exchange, the corporation transfers the following to the shareholder: • Common shares of $180,000 • Preferred shares of $30,000 • Loan payable of $25,000 The shareholder and the corporation agree to execute a section 85 election so as to minimise tax arising from the transaction for the shareholder. What will be the shareholder's adjusted cost base (ACB) of the common shares?

Reference no: EM133661699

Questions Cloud

What subsidy is necessary to induce monopolist : Calculate the area of dead-weight loss and indicate it on graph. What subsidy is necessary to induce monopolist to produce the socially optimal level of output?

What does return on assets (roa) mean : Identify and describe the two primary components that make up the ROA formula and Provide an example of two companies that have the same ROA but achieve

What is the cost to cool your home in an average month : You find that your Phoenix utility is moving to time of day pricing which basically means it will cost. What is the cost to cool your home in an average month?

Improperly reposing service members car - what do you think : In 2016 Wells Fargo had the fake accounts scandal, improperly reposing service members cars, 2017 more fake accounts. what do you think

What will be the shareholders adjusted cost base : minimise tax arising from the transaction for the shareholder. What will be the shareholder's adjusted cost base (ACB) of the common shares

Which were particularly vulnerable to devastating dimensions : Select that apply According to UN Secretary General, which were particularly vulnerable to devastating social and economic dimensions of coronavirus pandemic?

How much of a loss would be covered : minimum of 80% coverage. If her home were destroyed completely by a fire, how much of a loss would be covered

What is the ending balance in kingston fabrications : Based on this information, what is the ending balance in Kingston Fabrications' Raw Materials inventory account

What is the effect of the year 4 redemption on shzs net : In Year 4, CorpInc redeemed all preferred shares at $4 per share. What is the effect of the Year 4 redemption on ShZ's net income

User Account

All Pages