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Question - Gamma transferred some equipment from his proprietorship to a corporation in which he owned all of the shares. The capital cost of the equipment was $20,000, its UCC before the transfer was $16,000 and it was valued at $40,000 at the time of the transfer. In order to utilize some losses of the proprietorship that were about to expire, Gamma elected a transfer price of $35,000 under subsection 85(1). Which one of the following amounts represents the capital cost of the property to the corporation?
(A) $16,000
(B) $20,000
(C) $27,500
(D) $35,000
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