ITA 86(1) is often referred to as an estate freeze. Mrs. X. holds all the outstanding 1,000 common shares of a private corporation with an Adusted Cost Base (ACB) of $1,000 and the current fair market value (FMV) of the shares is $500,000. Mrs. X would like to freeze the value of her shareholding and pass on the future growth of the corporation to her adult children, Y and Z. To accomplish the ITA 86(1) estate froeze, OA Mrs. X sells her common shares to Y and Z for $250,000 each OB. Mrs. X sells her common share to Y and Z for $500 each. OC. Mrs. X exchanges her 1,000 common shares for redeemable preferred shares with a total redemption value of $1,000. O D. Mrs. X exchanges her 1,000 common shares for redeemable preferred shares with a total redemption value of $500,000.

ITA 86(1) is often referred to as an estate freeze. Mrs. X. holds all the outstanding 1,000 common shares of a private corporation with an Adusted Cost Base (ACB) of $1,000 and the current fair market value (FMV) of the shares is $500,000. Mrs. X would like to freeze the value of her shareholding and pass on the future growth of the corporation to her adult children, Y and Z. To accomplish the ITA 86(1) estate froeze, OA Mrs. X sells her common shares to Y and Z for $250,000 each OB. Mrs. X sells her common share to Y and Z for $500 each. OC. Mrs. X exchanges her 1,000 common shares for redeemable preferred shares with a total redemption value of $1,000. O D. Mrs. X exchanges her 1,000 common shares for redeemable preferred shares with a total redemption value of $500,000.

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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