What will be the shareholders adjusted cost base

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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

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