Individual E owns equipment that originally cost $60,000 and has an undepreciated capitalcost of $40,000. E sells the equipment to a corporation for its market value of $50,000. Toavoid tax on the transfer a section 85 election is filed by E and the corporation. What is theappropriate section 85 elected transfer price?

Section 85 of the Canadian Income Tax Act allows taxpayers to transfer property between themselves…

Answered: appropriate section 85 elected transfer…

Business

Accounting

appropriate section 85 elected transfer price?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Individual E owns equipment that originally cost $60,000 and has an undepreciated capital
cost of $40,000. E sells the equipment to a corporation for its market value of $50,000. To
avoid tax on the transfer a section 85 election is filed by E and the corporation. What is the
appropriate section 85 elected transfer price?

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